Should you invest in Sukanya Samriddhi Yojana or fixed deposits?

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The right investment options will enable you to not just set aside a fixed sum of money, but also help you multiply your savings. It is hence, more important than ever to find the right investment instruments to be a part of your balanced portfolio. This eclectic mix of investment avenues should align with your investment goals, which may involve retirement savings, short-term goals or investing for your child’s future. 

For parents looking to invest for their child’s future, safety of their investment is a prerequisite, which is why they look for stable investment options. Sukanya Samriddhi Yojana and Fixed deposits are one of the most preferred investment avenues. However, identifying the better option between these both can be tricky. Read along to read more about both these investment options, so you can make the right choice.  

Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana is a savings scheme, backed by the Government of India, which enables parents of girl children to build a fund for their future education and wedding expenses. Read about the features and benefits of this scheme below:

• Invest in this scheme for up to 14 years and receive the maturity amount after 21 years of opening the account. 
• The current rate of interest on the Sukanya Samriddhi Yojana Scheme is 8.5% for the quarter from 1 January to 31 March, 2019.
• The lock-in period of this investment is either up to 21 years or until your daughter gets married, whichever comes earlier. 
• You can partially withdraw up to 50% post 18 years to educate your daughter further.
• You can claim Rs.1.5 lakh as a deduction as per the Income Tax Act depending on the amount you invest, and the returns aren’t calculated as taxable income, making this scheme an excellent choice.
• invest, and the returns aren’t calculated as taxable income, making this scheme an excellent choice.

While Sukanya Samriddhi Yojana has its own set of advantages, read along to find out why parents view fixed deposits as one of the most preferred investment avenues.  

Advantages of a fixed deposit

Fixed deposits are fixed-income investment instruments, which enable you to benefit from guaranteed returns. Once you invest a lump sum amount in fixed deposits, your money is locked-in for a specified period, during which your interest gets accumulated. This interest is pre-decided and not affected by market forces. 

Here are some of the benefits of investing in fixed deposits:

• Any Indian citizen can open a fixed deposit. While Sukanya Samriddhi Yojana is best suited for parents of girl children, you may be able to invest in fixed deposits, even for your son. 
• You can choose any investment amount, as per your convenience, and there is no lock-in period.  
• Apply for fixed deposit online and you can also manage your account online, if you apply with top issuers.
• Earn a substantial rate of interest, which may be higher than what the Sukanya Samriddhi Yojana offers. 
• You can have more than one fixed deposit and take a loan against it, if required.
• Adjust the tenor and amount to earn inflation-beating returns.
• You can choose how you’d want your interest payouts – whether periodically, or at maturity, which depends on your child’s needs.  
• Easy to use FD Calculator to calculate maturity amount.

It’s best to invest in both instruments to maximise your benefits as they offer assured returns. When you choose to invest in a fixed deposit, consider leading NBFCs like Bajaj Finance as they offer higher returns as compared to bank FDs. Moreover, this particular one comes with CRISIL’s FAAA/Stable rating and ICRA’s MAAA (stable) rating, ensuring absolute safety. Bajaj Finance Fixed Deposit offers up to 8.75% interest, where you need to invest at least Rs. 25,000.  

You can apply online, manage your account online and calculate your returns beforehand using the online FD calculator. What’s more, you can avail up to 0.35% additional interest if you apply as a senior citizen, and gain from 0.25% extra interest upon renewal of your fixed deposit. 

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