SIP vs Sukanya Samriddhi Yojana: Which offers higher returns on a Rs 12,500 monthly investment over 15 years?
Compare Sukanya Samriddhi Yojana (SSY) and Systematic Investment Plan (SIP) for Rs 12,500 monthly over 15 years. Explore returns, tax benefits, and risk factors to choose the best investment.
With the increasing empowerment of women in India, securing the future of the girl child has become a priority. Recognising this need, the Government of India introduced the Sukanya Samriddhi Yojana (SSY), a scheme designed to ensure financial security for girls through long-term savings.
The Sukanya Samriddhi Yojana is a savings scheme specifically for the girl child, offering a combination of attractive interest rates and tax benefits under Section 80C of the Income Tax Act, 1961. Parents or legal guardians can open an SSY account for their daughters, and the funds can be used for her higher education or marriage. Contributions to the SSY account can be made for 15 years, but the maturity period extends to 21 years from the account's opening date, allowing interest to accumulate over the entire period.
Sukanya Samriddhi Yojana (SSY) vs Systematic Investment Plan (SIP)
- SSY: A government savings scheme for the girl child, offering attractive interest rates and tax benefits.
- SIP: A flexible mutual fund investment option with potential for higher returns, subject to market risks.
Sukanya Samriddhi Yojana (SSY)
Key Features
Contribution Limit: Up to Rs 1.50 lakh per financial year.
Interest Accumulation:
Interest is earned for 21 years, even though contributions are limited to 15 years.
Investment: Rs 12,500 monthly for 15 years.
Maturity Amount: Rs 6,93,26,478.
Total Interest: Rs 4,68,26,478.
Systematic Investment Plan (SIP)
Key Features
Flexibility: Regular investments in mutual funds with potential for higher returns.
Market Risks
Returns are subject to market conditions and can vary.
Investment: Rs 12,500 monthly for 15 years.
Return: Rs 4,05,72,000.
SSY Advantages
Guaranteed returns, tax benefits, security for risk-averse investors.
Ideal For:
Long-term financial security with low risk.
SIP Advantages
Potentially higher returns, flexibility.
Ideal For:
Investors with a higher risk appetite seeking growth.
Decision Factors
Risk Appetite: Choose SSY for guaranteed returns; SIP for potential growth.
Financial Goals: Consider long-term objectives and use tools like the SSY Calculator to plan effectively.