Sukanya Samriddhi Yojana (SSY)

Sukanya Samriddhi Yojana (SSY): Eligibility, Interest Rate, Benefits

The government has taken up various measures in terms of education and financial freedom for the girl child. Sukanya Samriddhi Yojana is one such government back scheme to help parents save for the education and marriage of the girl child from the start itself.

Sukanya Samriddhi Yojana is a small saving scheme, which can be opened in post offices and designated private and public banks in the form of a savings account in the name of the baby girl. The interest rate is declared quarterly just like other post office schemes. The interest rate for Jan-Mar’19 (Q4, FY 2018-19) was 8.5%.

It is regarded as one of the most high-paying investment options in the fixed income segment. The following are the historic interest rates of this government scheme for the girl child:

Time Period Interest Rate (%)
April to June 2019 (Q1 FY 2019-20) 8.5
Jan to March 2019 (Q4 FY 2018-19) 8.5
Oct to Dec 2018 (Q3 FY 2018-19) 8.5
Jul to Sep 2018 (Q2 FY 2018-19) 8.1
Apr to Jun 2018 (Q1 FY 2018-19) 8.1
Jan to March 2018 (Q4 FY 2017-18) 8.1
Oct to Dec 2017 (Q3 FY 2017-18) 8.3
Jul to Sep 2017 (Q2 FY 2017-18) 8.3
Apr to Jun 2017 (Q1 FY 2017-18) 8.4
Source: National Savings Institute

Eligibility for Sukanya Samriddhi Yojana Account

The following are the key eligibility criteria for opening a Sukanya Samriddhi Yojana Account:

  • Only parents or legal guardians of the girl child can open a Sukanya Samriddhi account in the name of the girl.
  • The girl child should be less than 10 years at the time of account opening. The account can be operational till the girl reaches the age of 21 years.
  • The initial investment can start from Rs. 250 and a maximum of Rs. 1,50,000 annually with further deposits in the multiples of Rs. 100.
  • A single girl child cannot have multiple Sukanya Samridhhi accounts.
  • You can benefit from higher interest rates offered by company fixed deposit
  • Only two Sukanya Samriddhi Yojana accounts are allowed per family i.e., one for each girl child.

Comparison between Child FD and Sukanya Samriddhi Yojana (SSY)

Sukanya Samriddhi Scheme is a long-term investment scheme while a fixed deposit can be used as a short-term as well as long-term investment scheme. FD with short tenor can help you safeguard your investment against inflation whereas FD with long tenor can help you accumulate corpus for future needs.

Let us see the key differences between an FD for a child and SSY scheme.

  • Any Indian national can open an FD, irrespective of their age or gender. Sukanya Samriddhi Account can only be opened for a girl child below the age of 10 years. Also, an FD can be opened in the name of the parent with the child as their nominee or beneficiary.
  • Fixed Deposits can be applied online. No online mode of operation/account opening is possible for Sukanya Samriddhi Account.
  • An individual can have more than one FD account in their name but in the case of Sukanya Yojana only one account can be opened for a girl child, with a cap of two accounts per family.
  • Fixed deposits require Rs. 100 of deposit amount per month to start with whereas Sukanya Yojana requires a minimum of Rs. 250.

Benefits of Bajaj Finance Child FD over Sukanya Samriddhi Yojana (SSY):

Though Sukanya Samriddhi Yojana is a government-sponsored scheme, it has certain limitations in terms of the investment terms, interest rate, ease of investing, and more. In the face of these limitations, parents can lookout for other suitable investment options like Bajaj Finance Child FD which not only provides assured, high returns but also offers flexible investment terms. Also, if there are more than two girl children in a family, then an alternative like a high-paying company FD is much needed.

Bajaj Finance FD is one of the highest rated company FDs with a rating of FAAA/stable from CRISIL and MAAA/stable from ICRA. This means that your investment is safe from market fluctuations. Additionally, Bajaj Finance Child FD offers these superior benefits:

  • High Interest Rate: Bajaj Finance offers 8.35% interest rate on Child FD which is slightly higher as compared to Sukanya Samriddhi account. Also, Bajaj Finance FD offers an additional 0.10% interest upon renewal of your FD.
  • Interest Rate Fluctuations: The rate of interest is subject to periodic changes in the case of Sukanya Samriddhi, whereas a company FD like Bajaj Finance FD will offer attractive interest rates irrespective of RBI movements or market fluctuations.
  • Eligibility: Any Indian Citizen can open Bajaj Finance FD, irrespective of their age or gender, Sukanya Samriddhi Account can only be opened for the girl children below the age of 10 years.
  • Ease of Investing: Bajaj Finance FD offers features such as debit card for FD investment, multi-deposit facility, auto- renewal feature, and much more.
  • Lock-in period: The lock-in period for Sukanya account is at least 21 years or at the time of marriage of the account holder, whichever is earlier. While the tenor of Bajaj Finance FD can vary from 1 to 5 years, with an option for premature withdrawal of funds.
  • Laddering: Bajaj Finance FD offers flexibility to choose tenor ranging from 12 months to 36 months. This helps you ladder your investments such that you have multiple FDs with successive maturity timelines, with at least one FD dedicated towards each financial goal of your girl child. SSY account doesn’t offer this benefit.
  • Periodic Interest Payouts: You can avail periodic interest payouts with Bajaj Finance Child FD. The frequency of interest payouts can be set as monthly, quarterly, or half-yearly. SSY account doesn’t offer periodic interest payouts.
  • Liquidity: In case of Sukanya Samriddhi account, you can withdraw 50% of the amount accumulated only after the girl reaches the age of 18. Premature withdrawals of whole amount can be possible in the case of Bajaj Finance FD without any restrictions on lock-in period. Also, you can avail loan against Bajaj Finance FD online.
  • Online Account Management: Bajaj Finance FD can be opened and managed online whereas Sukanya Samriddhi account does not offer any such type of facility.
  • Online Interest Rate Calculator: Bajaj Finance also offers an online FD calculator so you can know the exact maturity amount. It also lets you decide the right principal amount to reach a desired maturity amount. SSY account doesn’t offer such facility.

The table below highlights the key differences between Bajaj Finance Child FD and SSY Scheme:

Parameters Bajaj Finance Child FD Interest Rate (%)
Tenor 1-5 Years 21 Years
Interest Rate 8.35%* 8.50%
Gender/Age Restriction Nil Only for girl child below 10 years of age
Availability Online PS Banks (Offline)
Multiple Accounts Yes No
Emergency Funds Can avail Loan against FD No
Online Account Management Yes No
Flexible Tenor Yes No
Laddering Yes No
Auto- renewal Yes NA
Periodic Interest Payout Yes No

Thus, Bajaj Finance Child FD has more benefits than the Sukanya Samriddhi Yojana, which makes it a better investment option than the latter. Start investing in a Bajaj Finance Fixed Deposit right away, to make your savings grow.