Both, Sukanya Samriddhi Yojana and Fixed Deposits, are stable investment options. They help a person plan for life’s major milestones. But they are very different from each other. Sukanya Samriddhi Yojana or Pradhan Mantri Sukanya Yojana is a government scheme that aims to ensure financial security to the girl child. A fixed deposit (FD) has varied utility for people of all ages and gender.
Lets looks at the differences between both of these:
- Eligibility: Pradhan Mantri Sukanya Yojana can be availed only by the parents or legal guardians of a girl before she turns 10. A fixed deposit can be opened by young salaried employees, professionals as well as senior citizens.
- Tenor: Fixed deposits have tenors ranging from 12 months to 60 months. Pradhan Mantri Sukanya Yojana doesn’t give an option for tenor. It lasts till the girl gets married or till she turns 21, whichever is earlier. So it has the limitation to fulfil only your daughter’s wedding or higher education. Whereas a fixed deposit can be targeted at short term as well as long term goals.
- Payout: Pradhan Mantri Sukanya Yojana pays out the full amount only at the time of maturity. You can withdraw up to 50% of the total amount once the girl has turned 18. Fixed deposits interest payout options include monthly, quarterly, half-yearly, yearly and at the time of maturity. Cumulative FDs pay only at the time of maturity, letting you accumulate a huge corpus with a high interest. Non-cumulative FDs allow for multiple interest payouts, so you can rely on your FD for daily expenses or smaller financial goals. This is a great investment option for senior citizens.
- Number of accounts: A girl can have only one Pradhan Mantri Sukanya Yojana account and a family can have up to 2 accounts. In the case of twin girls resulting from the first or second delivery, the family can hold 3 accounts. Whereas, an individual can hold multiple fixed deposits. In fact, having multiple FDs with different maturity dates helps investors diversify their portfolio and earn more from investments.
The flexibility of investing and multiple payout options make fixed deposits a better investment option as compared to Pradhan Mantri Sukanya Yojana. Fixed deposits from Non Banking Financial Companies (NBFCs) give higher interest rates than banks. You can check the kind of returns you can expect from your investment with an FD interest rates calculator.
Unlike earlier, now investors can also avail a Systematic Deposit Plan (SDP) with Bajaj Finance FD. Under this plan you choose to make small monthly deposits, ranging from 6 to 48 deposits. If you are looking for an investment that your daughter can build on her own, SDP is ideal. It provides stable returns on monthly deposits at zero risk. If the depositor misses an instalment, there is no charge levied on them. In emergencies, an FD allows premature withdrawal of funds. In essence, you can have an SDP dedicated for each one of the financial goals of your daughter, such as higher education or marriage.
You can also opt for a loan against your FD. This creates a financial backing that you can rely on. Bajaj Finance FD has the highest stability ratings from CRISIL and ICRA, meaning they guarantee safe investments and stable returns.
With online application system and online account management functionality through Experia- your online fixed deposit account, you can start and manage multiple FD investments from the comfort of your home.