Sukanya Samriddhi Yojana is a government-backed scheme in India that allows parents of a girl child to save for her education and wedding expenses. A parent or a legal guardian can open this account in the girl child’s name before she reaches the age of 10 and the full deposited amount and interest can be withdrawn upon completion of 21 years from the date of opening or marriage of the account holder, whichever is earlier.

This scheme is widely popular nowadays because of attractive Sukanya Samriddhi Yojana interest rate (usually over 8 percent) and other features such as withdrawal for education or marriage.

However, since it is a long term investment and applicable only for the first two girls of the family, parents might get tempted to look for some other high return investments as well. One impressive option is the fixed deposit which can be used for both short and long term investment plans. Let us compare the features of both these investment instruments:

Online account management

Many banks and finance companies allow investors to open an FD account online. Bajaj Finance is one step ahead as it also allows investors to manage their account online by registering on their official website with an account.

No such facility is available in Sukanya Samriddhi Yojana.

Liquidity

Sukanya Samriddhi Yojana is a long term investment scheme in which you have to wait for your girl child to turn 18 to withdraw the deposited amount for her marriage or higher education.

However, no such restrictions apply to fixed deposits. You may even withdraw the deposited amount before the FD matures by paying a nominal fee upfront.

Bajaj Finance even allows depositors to take a loan using their FD as collateral, which enables them to secure their savings as well.

Interest rate

Sukanya Samriddhi Yojana interest rate has historically been above 8 percent. The interest rates are revised on a quarterly basis, and the interest rate for the last quarter i.e., April to June 2019 was 8.5 percent.

Once you apply for a fixed deposit, the interest rate remains the same throughout the FD tenor. Also, NBFCs like Bajaj Finance offer high-interest rates up to 8.35 percent on child FDs. You get an additional 0.10 percent interest if you choose to renew the FD and this facility is not available in Sukanya Samriddhi Yojana.

Advanced features

The fixed deposit schemes, especially those offered by NBFCs like Bajaj Finance, come with a complete package of advanced options and tools.

Bajaj Finance allows an investor to use a debit card for opening an FD account. Moreover, advanced features like online FD calculator are provided, which enables an investor to estimate his/her earnings in advance.

No such features are provided to an investor when it comes to Sukanya Samriddhi Yojana.

Flexibility

You can choose a convenient tenor while investing in an FD. Many banks offer investors to start an FD account by deposit just Rs. 1000.

Sukanya Samriddhi Yojana does not allow an investor to choose a tenor, but the flexibility of choosing the initial deposit and subsequent deposits is very much there.

A parent can start investing by depositing an amount from Rs. 250 to Rs. 1,50,000 according to his/her convenience and keep depositing amount in multiples of Rs. 100 each month. However, only one SSY account can be opened in the name of a girl, whereas you can open multiple FDs in the name of one person.

Bajaj Finance FD also provides an option of investing in multiple FD accounts through a single cheque, with the multi-deposit facility. Not only that, the tenor and interest payout terms can be set differently for each of the deposit so that one fixed deposit matures every time you are short of funds. Also, by availing this scheme, you can ensure that your remaining FD accounts remain undisturbed.

While the SSY scheme is a great option for parents to secure a girl child’s future, fixed deposits enable the parents to secure their future while meeting the short term capital requirement of their family. Bajaj Finance FD assures high returns, and it is also safe as renowned credit rating institutions like ICRA and CRISIL have rated it highly on safety and credibility. Therefore, if you have opened an SSY for your girl child, then you can think of running a parallel investment for your girl child and family by investing in a Bajaj Finance FD.

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