Sukanya Samriddhi vs Fixed Deposits: Know Which Investment Is Better

An investor needs to be aware of the fact that the worth of an investment tool cannot be determined just by looking at the interest rate. A good deposit scheme should also provide convenience, flexibility and expert assistance to the investor. For Sukanya Samriddhi Yojana and Fixed Deposits, here’s how you can look at the big picture:

  • Who can avail it?

The objective of Sukanya Yojana scheme is to address the financial needs of a girl child like higher education and wedding. So it can be availed only for a girl, by her parents or legal guardians, before she reaches 10 years of age. A fixed deposit, on the other hand, can be availed by a person of any age and gender. Reputed FD providers like Bajaj Finance FD even have higher FD rates for senior citizens.

  • How do you invest?

Sukanya Yojana scheme is a government initiative, which you can avail by visiting a post office or any of the authorised private or public banks. To invest in fixed deposits, you don’t need to carry a lot of documents and stand in queues. You can read about them online on company websites of major banks and NBFCs and directly apply there. Reduced hassles and minimal documentation also make fixed deposits a better option.

  • When does it pay?

Fixed deposits allow you to decide the payout frequency. In a Bajaj Finance ‘cumulative’ FD, you receive high interest returns at the time of maturity. Whereas a ‘non-cumulative’ Bajaj Finance FD tells you to choose from monthly, quarterly, half-yearly and yearly payout options. This helps the investor plan for long term as well as short term financial goals. Sukanya Yojana scheme pays only once the girl turns 21, or when she is getting married, whichever is earlier.

  • What happens in emergencies?

If you need funds urgently, say for a medical emergency, having a fixed deposit will prove better than Sukanya Yojana scheme. For instance, Bajaj Finance FD lets you withdraw the whole deposit amount prematurely, after initial 3 months (lock-in). With Sukanya Yojana, you can get only 50% of the total amount, that too only once the girl has turned 18.

  • How many accounts can you hold?

Only 2 Sukanya Yojana scheme accounts can be availed per family. 3 in the case of twins resulting from the 1st or 2nd delivery. There is no limitation to holding fixed deposit accounts. You can open multiple accounts and benefit more by laddering your investments. One significant upgrade that ‘fixed deposits’ as a product have got is a Systematic Deposit Plan (SDP). Traditionally, fixed deposits meant putting aside a large sum of money in one go. But with SDP, investors can choose to make small monthly deposits and earn interest on each of them at the current prevailing interest rate on the date of the deposit. SDP also allows for premature withdrawal and loan against each deposit. Currently, Bajaj Finance FD is the only company to offer this. Apart from high FD rates, it also has high safety and credibility with the best credit ratings from reputed agencies like CRISIL and ICRA.

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