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Sukanya Samriddhi Yojana vs. Mutual Fund Investments


Although inflation has been a major cause of concern for the last decade, ranging between 2-10%, the treatment costs and education costs have shown a stark rise, the latter one being 10-12% per year. There is no hope that it will reduce in the next one or even two decades. Therefore, solid investment and strong financial planning from an early age are essential to enjoy a secure future. T

Here are several plausible investment avenues, especially when you have a girl child. Sukanya Samriddhi Yojana and mutual funds are the two major aspects of discussion in this article. During investment or even before that, you can check out the prospects using a mutual fund calculator or Sukanya Samriddhi Yojana calculator.


Sukanya Samriddhi Yojana (SSY)

Sukanya Samriddhi Yojana or SSY was launched by the Government of India back in 2015, as a part of their exclusive campaign “Beti Bachao, Beti Padhao”, encouraging the public to save the life and prosperity of their girl child’s future.

This exclusive scheme applies to girl children of up to 10 years and currently offers an interest of 7.6% which is compounded yearly and reviewed quarterly and offers tax benefits. The rate of interest is comparatively a bit higher than PPF. Here, the minimum yearly investment amount is INR 250 while the optimum limit is INR 1.5 lakh, throughout the entire investment tenure that stretches for 15 years.

If the minimum yearly investment criteria are not fulfilled throughout the investment course, then the government charges a penalty. Post this, the concerned account will continue earning interest for the subsequent 6 years till maturity, which is 21 years from the time of account opening. The Sukanya Samriddhi Yojana calculator reveals the prospects of your investment.


Mutual Funds

While you invest in mutual funds, you invest your fund in a particular financial instrument which is capable of pooling money from several investors and investing in stocks of several listed companies, corporate and government bonds, and other asset classes as predetermined investment objectives. Your fund gets managed by professional expert fund managers depending on your investment objectives, portfolio, and risk appetite. Therefore, you have to ensure making an informed decision.

Depending on the type of asset class you have chosen for investment, mutual funds can be broadly classified into debt mutual funds like corporate bonds, government securities, etc. and equity mutual funds, where the funds are invested in stocks. When considering the long-term strategy, an equity mutual fund is considered to be a comparatively better option, with several other fund categories depending on the extent and level of your risk appetite. A mutual fund calculator reveals the prospects of your planned investment even before you invest.


Factors to Consider Before Investing

Now that you have a basic understanding of the plausible investment options to secure your child’s future, you must understand the important factors to consider before investing:

1- Withdrawal and lock-in

The withdrawal options and the tenure for which your money will remain locked are essential considerable factors before settling your choice. In this regard, mutual fund beats SSY, offering zero lock-in period, except in ELSS, which comes with a standard lock-in period of 3 years with simple redemption options. The liquidity of the investment is one of the major advantages of mutual fund investment. If you are in dire need of finances at any point you can even withdraw the entire amount. However, before withdrawal, you must consider the exit load and capital gains tax are two key considerable factors.

In the case of SSY, the lock-in period is of 21 years. However, there exists the option for partial withdrawal, fulfilling certain pre-existing conditions. Here, you can partially withdraw (only 50% of the balance during withdrawal), when your child turns 18 years, completing the 10th standard for either marriage of the child or further educational purposes.


2- Returns

SSY allows a maximum investment of INR 1.5 lakh/year for 15 years at the existing interest rate of 7.6%. . However, with MFs, your investment possesses the potential to go above dual instruments. There exists no capping on the investment amount.


3- Tax Implication

SSY comes under the EEE category, implying that the invested money, the interest-earning, and the final return enjoy tax exemption. The yearly investment enjoys tax exemption of up to INR 1.5 lakh u/s 80C of the IT Act.

Except for ELSS, mutual funds do not offer any tax-saving option. Moreover, capital gains are eligible for taxation. The investment tenure decides if it will be a long-term or short-term one.



The financial experts always opine to keep your portfolio diversified to enjoy better returns being least affected by market fluctuations. Therefore, it is best to invest partially in both the schemes of SSY and mutual funds to enjoy satisfactory returns in the long run. Sukanya Samriddhi Yojana calculator and mutual fund calculator will reveal the future of your investments as you enter the relevant details.