Sukanya Samriddhi Yojana vs FD: Here is why SSY should be a top choice for financially solid future of your girl child

Sukanya Samriddhi Yojana (SSY) is fast gaining traction among the investors who are blessed with girl child because it helps them earn better returns along with income tax exemption up to Rs 1.5 lakh investment in the year of investment under section 80 (C) of the Income Tax Act. Apart from that, the SSY scheme also allows an investor to get income tax exemption on the returns earned under the SSY. Because of the higher returns in the SSY, those investors who are having a girl child, they have better option to invest in the SSY rather into the customary Bank Fixed Deposits (FDs), say investment experts. They are of the opinion that in long-term bank FD, one can get interest rate of around 6.5 to 7.5 per cent, depending upon the bank an investor chooses, while in SSY an investor can get 8.5 per cent return on his or her investment.

Speaking on the SSY versus bank FD investment Kartik Jhaveri, Director — Wealth Management at Transcent Consultants told Zee Business Online, "In SSY, an investor gets a return of around 8.5 per on his or her investment with income tax exemption up to Rs 1.5 lakh investment in the plan. However, if we look at the bank FD, the return is to the tune of 6.5 per cent to 7.5 per cent, depending upon the bank chosen by the investors." Jhaveri said that SSY investment makes an investor disciplined as it doesn't allow him or her to withdraw the money in between the investment period while in bank FD, it can be liquidated any day the investor wants. In fact, even after 18 years of your daughter, you can withdraw only half the money you have invested and the rest of the amount can be withdrawn when your daughter attains 21 years of age. In SSY investment, an investor can invest until his or her daughter attains 14 years of age.

Elaborating upon the SSY and Bank FD investment Jitendra Solanki, a SEBI registered investment expert said, "In bank FD, one can get 6.5 to 7.5 per cent of return (as various banks give different returns on fixed deposits) while in SSY, you get 8.5 per cent return per annum. So, for the beginner, SSY looks better but they need to remember SSY is an asset investment while bank FD is a more liquid investment. In the need of money, one can withdraw partial or whole amount he or she has invested in bank FD." Solanki added that in SSY, the investor becomes a disciplined investor as his amount can't be used for the purpose other than the purpose of investment. Solanki advised investors to diversify their investment portfolio and recommended investors to invest in PPF, SIP and SSY.