The government has recently hiked interest rates of Sukanya Samriddhi Yojana (SSY) for January-March 2024 quarter by up to 20 bps. With this, the rate now stands at 8.2%. Before this, the revision was done in April-June 2023 quarter when it was raised from 7.6% to 8%.
Live TV
Loading...
The SSY is a savings scheme aimed at fostering a financial safety net for the girl child. It can be opened by a guardian in the name of a girl child below the age of 10 years. The account can be initiated with a minimum deposit of ₹250. Subsequently, deposits can range from a minimum of ₹250 to a maximum of ₹1.50 lakh in a financial year.
In contrast, several financial institutions offer specialised mutual fund schemes geared explicitly towards funding a child's higher education. These funds, provided by entities like Tata, SBI, HDFC, and Axis, present investment opportunities but carry inherent market risks.
Here's a look at some of the schemes for children's higher education and their comparison with SSY:
Tata Young Citizens' Fund
Tata's Young Citizens' Fund is an open-ended scheme focusing on children, with a minimum lock-in of 5 years or until the child reaches 18 years old, offering a balanced approach between equity and debt investments.
SBI Magnum Children's Benefit Fund
SBI's scheme targets long-term capital growth and regular income through investments in debt, money market instruments, and a managed portfolio of equities for fulfilling future financial needs of children.
It comes with a minimum lock-in period of 5 years or until the child attains adulthood.
HDFC Children's Gift Fund
HDFC's open-ended fund seeks to generate capital appreciation over the long term through equity and debt investments for meeting future financial needs.
It also comes with a minimum lock-in period of 5 years or until the child turns 18.
Axis Children's Gift Fund
Axis Mutual Fund's scheme focuses on long-term capital appreciation through equity, debt, and money market instruments for fulfilling children's future financial requirements.
The lock-in period comes with a minimum of 5 years or until the child attains adulthood.
Here's a table comparing various attributes of the Sukanya Samriddhi Yojana (SSY) and the mentioned private higher education investment schemes:
| Attributes | Sukanya Samriddhi Yojana (SSY) | Tata Young Citizens' Fund | SBI Magnum Children's Benefit Fund | HDFC Children's Gift Fund | Axis Children's Gift Fund |
|---|---|---|---|---|---|
| Provider | India Post (Government) | Tata Mutual Fund | SBI Mutual Fund | HDFC Mutual Fund | Axis Mutual Fund |
| Eligibility | Girl child below 10 years | Any child who has at least 5 years to turn into an adult | Any child who has at least 5 years to turn into an adult | Any child who has at least 5 years to turn into an adult | Any child who has at least 5 years to turn into an adult |
| Minimum Deposit | ₹250 | - | - | - | - |
| Maximum Deposit (per year) | Up to ₹1.50 lakh | - | - | - | - |
| Interest Rate | 8.2% (January-March 2024) | Depends on the market scenario | Depends on the market scenario | Depends on the market scenario | Depends on the market scenario |
| Lock-in Period | Until maturity or marriage | 5 years or until 18 years | 5 years or until adulthood | 5 years or until 18 years | 5 years or until adulthood |
| Investment Objective | Opportunity for parents and guardians to invest in their girl child's financial future | Long-term capital appreciation | Regular income with capital appreciation | Long-term capital growth with regular income | Long-term capital growth |
| Risk Profile | Low | Moderately high | Moderately high | Moderately high | Moderately high |
| Tax Benefits | Deductions under Section 80C | - | - | - | - |
(Source: Bankbazaar)
(Edited by : Amrita)
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
'Rahul Gandhi deserted Amethi due to fear of Smriti Irani': How BJP plans to puncture Congress' UP plan
May 3, 2024 1:12 PM
'Don't be scared, don't run away', PM Modi tells Rahul for not contesting from Amethi
May 3, 2024 1:06 PM