NPS Vatsalya Scheme vs Sukanya Samriddhi Yojana

Planning for your child’s future is one of the most important financial decisions you will ever make. Whether it is securing their education, supporting their marriage, or simply building a corpus for their long-term needs, selecting the right investment scheme is crucial. In 2025, two government-backed schemes—NPS Vatsalya and Sukanya Samriddhi Yojana (SSY)—stand out as popular choices for parents. But which scheme is better for safeguarding your child’s future?

While both options offer unique benefits, diversification is key to achieving financial stability. Alongside these schemes, incorporating a Bajaj Finance Fixed Deposit (FD) can provide assured and predictable returns, offering a secure fallback amidst market fluctuations. Open an FD account and earn up to 7.30% p.a. returns. 

The NPS Vatsalya Yojana is a child-focused version of the National Pension System (NPS), designed to build a retirement corpus for children. It allows parents to invest in a mix of equity and debt funds, creating long-term wealth while offering tax benefits.

This scheme is open to both boys and girls under 18 years of age. Contributions are market-linked, with historical returns ranging from 8–10%. The lock-in period lasts until the child turns 18, with partial withdrawals permitted for education, marriage, or emergencies.

Investment options

NPS Vatsalya offers diverse allocation options, including Tier I funds, equity, and bonds. Parents can customise their investments based on their risk tolerance, opting for higher equity exposure for potentially greater returns or a balanced mix for stability.

Tax benefits

Contributions under NPS Vatsalya are eligible for tax deductions:

• Section 80C: Up to Rs. 1.5 lakh annually.
• Section 80CCD(1B): An additional Rs. 50,000.

Return on investment

The scheme’s returns are market-linked, which means they fluctuate based on market performance. While this can lead to higher growth, it also introduces volatility. 

For parents seeking predictable returns, a Bajaj Finance FD offers consistent payouts, unaffected by market conditions. Check the latest rates. 

Withdrawal rules

Tier I accounts under NPS Vatsalya have a strict lock-in period until the child turns 18. Partial withdrawals (up to 25%) are allowed for specific needs like education or marriage. 

Flexibility

NPS Vatsalya allows flexible contributions, enabling parents to adjust their investments based on their financial capacity.

Eligibility

This scheme is open to both boys and girls under 18 years of age, making it inclusive for all children.

Maturity

Upon maturity, parents can choose between a lump-sum corpus or an annuity plan that provides regular payouts post-retirement.

To ensure steady growth of withdrawn funds, parents can reinvest them in Bajaj Finance FDs, which provide guaranteed returns. Check eligibility. 

Opening an NPS Vatsalya account is simple and can be done either online or offline.

1. Online process: Visit the NPS website or other authorised platforms. Provide your child’s details, upload necessary documents, and select your preferred investment allocation.
2. Offline process: Visit a designated Point of Presence (POP) centre, such as banks or financial institutions, to complete the registration process.

The Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme exclusively for girl children. It is part of the Beti Bachao Beti Padhao campaign, aimed at empowering girls through financial security.

This scheme offers fixed returns (currently 8.2%) and tax benefits under Section 80C. Parents can invest a minimum of Rs. 250 and a maximum of Rs. 1.5 lakh annually. SSY matures when the girl turns 21, with partial withdrawals allowed at age 18 for education or marriage.

Eligibility

SSY is exclusively for girl children under 10 years of age. Parents or legal guardians can open an account in the child’s name.

Investment

The scheme requires a minimum annual deposit of Rs. 250 and allows a maximum of Rs. 1.5 lakh per year.

Tax benefits

Contributions to SSY qualify for tax deductions under Section 80C, up to Rs. 1.5 lakh annually. Additionally, the scheme is fully EEE (Exempt-Exempt-Exempt), meaning investments, interest earned, and maturity payouts are tax-free.

Return on investment

SSY offers fixed returns, currently at 8.2%. While these returns are guaranteed, they may not keep pace with inflation over the long term. For diversification and predictable returns, parents can consider Bajaj Finance FDs as well. These FDs offer interest rates of up to 7.30% p.a. for senior citizens, and up to 6.95% for customers below the age of 60. Open FD.

Maturity

The scheme matures when the girl turns 21. Partial withdrawals (up to 50%) are allowed at age 18 for education or marriage expenses.

Flexibility

Unlike NPS Vatsalya, SSY has limited flexibility. Contributions must be consistent, and withdrawals are restricted before maturity.

Withdrawal rules

Withdrawals before maturity are limited to 50% of the account balance and can only be used for specific purposes like higher education or marriage.

Both NPS Vatsalya and Sukanya Samriddhi Yojana serve distinct purposes, making them suitable for different financial goals. Here is a concise comparison table to help you evaluate their features:

Choosing between NPS Vatsalya and Sukanya Samriddhi Yojana depends on your financial goals and priorities. NPS Vatsalya is ideal for long-term retirement planning, offering higher market-linked returns and tax benefits. However, it lacks liquidity for short-term needs. On the other hand, SSY is perfect for safe, tax-free savings focused on education and marriage expenses, but it is restricted to girl children and offers lower returns.

For families seeking a balanced approach, consider diversifying investments across both schemes. Additionally, complement these plans with a Bajaj Finance Fixed Deposit (FD) for assured returns unaffected by market risks. With interest rates up to 7.30% p.a., flexible tenures, and a minimum investment starting at Rs. 15,000, Bajaj Finance FDs provide the stability and liquidity that your portfolio needs. Invest now!