When it comes to securing your daughter’s future, the government’s Sukanya Samriddhi Yojana (SSY) scheme stands out. Offering an 8.2% interest rate, this scheme allows parents to deposit a minimum of 250 rupees annually and a maximum of 1.5 lakhs. The scheme matures when the daughter turns 21, with parents required to invest continuously for 15 years in their daughter’s name.
In addition to SSY, parents have the option to explore mutual funds through the Systematic Investment Plan (SIP). While SIPs do not guarantee safety due to market fluctuations, they provide an opportunity for substantial funds to accumulate over 21 years. This can be an appealing choice for parents comfortable with a more dynamic and potentially higher-return investment.
SSY Returns vs SIP Returns: A Comparative Analysis
- SSY Investment: Investing 5,000 rupees monthly for 15 years accumulates to a total investment of 9 lakhs. At an 8.2% interest rate, the return after maturity is calculated to be 18 lakhs, with a further maturity value of 27 lakhs upon the scheme’s maturation.
- SIP Investment: Simultaneously, investing 5,000 rupees monthly in an SIP for 15 years results in a total investment of 9 lakhs. Assuming a 12% return, the accumulated amount after 15 years would be approximately 16 lakhs and after withdrawal, the final amount would be around 25 lakhs.
Comparing both investment paths, SIPs have the potential for higher returns, but they involve market-linked risks. The calculated returns in both scenarios show that SIPs can surpass 50 lakhs if continued for 21 years. This is achieved with a total investment of only 12.6 lakhs, where the interest alone amounts to 44.3 lakhs.
A Balanced Approach
Choosing between SSY and SIP depends on individual risk tolerance and financial goals. SSY provides safety and guaranteed returns, making it suitable for risk-averse investors. On the other hand, SIPs offer potential for higher returns but come with market uncertainties. A balanced approach, perhaps a combination of both, can be tailored based on individual preferences and financial strategies. Whether opting for the assured returns of SSY or the potential growth of SIPs, investing in your daughter’s future is a valuable decision.