Over the past few years, the Government of India has taken several initiatives to secure the future of girl children. Sukanya Samridhhi Yojana or SSY is one such scheme which helps parents save for their child’s education and marriage right from the beginning. On the other hand, fixed deposits are safe investment schemes yielding higher returns on maturity. It is essential to know FD and Sukanya Yojana details to choose the best financial option for your child.
Understanding Sukanya Samriddhi Yojana
Under the leadership of PM Narendra Modi, SSY was introduced as a part of their campaign ‘Beti Bachao Beto Padhao’ in 2015. Fund invested in this small savings scheme matures in 21 years. Parents can make premature withdrawal of up to 50% after the girl turns 18 and is about to get married.
Understanding fixed deposits
Fixed deposits are one of the safest investment schemes bringing guaranteed returns and not subject to market conditions. FDs have a lock-in period of usually 12 to 60 months. You can break the investment before its maturity only against a premature withdrawal charge. However, lending institutions offer loans against fixed deposits to help customers address their immediate cash requirements adequately.
Below is a comparison of FD vs SSY to help you choose the best option for your girl child.
FD vs SSY: Which one is better?
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Anyone who meets the eligibility criteria can open an FD account, irrespective of gender and age. However, a savings account under the Sukanya Yojana must be opened any time before the girl is 10 years old.
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Parents can open a maximum of 2 accounts for their girl children under SSY, while there can be multiple FD accounts with different tenors. With non-cumulative accounts, investors can also choose periodic interest payouts as per their preference.
There are various such things which make a fixed deposit one of the best investment options in India. Going for a trusted financial company is crucial to enjoying the best benefits on your investment, and one such organisation is Bajaj Finance.
Why is Bajaj Finance FD a better option?
If you want to build a financially stable future of your girl child, it is important to invest in a secure policy yielding higher returns. Below are a few points suggesting why FD from the NBFC is better.
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One of the most important Sukanya Yojana details is the interest rate. Every quarter, the government declared a revised rate of interest for the current fiscal which compounds annually. The interest rate for Q2, FY 2019-20 is 8.4% while Bajaj Finance FD comes at 8.70% rate of interest. This ensures you earn higher returns with the fixed deposit.
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Customers cannot open an account under SSY online. They need to visit the nearest branch to submit application form along with relevant details. On the contrary, they can easily open an FD with an online application form. The NBFC even allows investors to manage and track their accounts online.
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Another crucial factor in FD vs SSY is the stability of investment returns. Fixed deposit from Bajaj Finserv holds the highest stability ratings from CRISIL and ICRA – FAAA and MAAA. Additionally, it is the only NBFC in India with S&P Global’s international ‘BBB’ rating. This ensures that the investment for your child is completely safe with this NBFC.
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In Sukanya Yojana, a girl child can hold maximum of one account under her name. On the contrary, there can be multiple deposits of a single holder. You can easily open several FD accounts with one cheque payment and select different lock-in periods. Only make sure to evaluate your requirements and know the right time to invest in an FD.
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The benefit of multiple FD accounts is that you can withdraw any one deposit prematurely when needed, without breaking the remaining.
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Instead of liquidating your investment, you can also avail up to Rs. 4 Lakh as a loan against fixed deposit. While the credit addresses your financial needs adequately, the investment continues to grow. You can even contribute the interest earned towards this loan repayment.
As clear from the Sukanya Yojana details, SSY is a government-backed scheme and also one of the highest-paying investment avenues in the fixed income sector. However, fixed deposits are better options for your girl child, considering the scheme’s flexibility and convenience.