Which is a better investment option for your child? SSA v/s Children Mutual Funds!

Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana account is a government scheme launched by the Prime Minister of India with the main purpose of helping parents and guardians save for their girl child’s future from a very young age. The scheme can be opened for any girl child of 10 years and below and only one account can be opened per child. The account has to be paid for 14 years from the initiation of the account and the account also offers tax benefits.

Children Mutual Funds

Children mutual funds are mutual funds that are designed specially for children. It is a professional fund wherein the money is invested in bonds, stocks and other securities. It is a high risk investment which yields high returns. The account is available for both the girl and boy child.

Comparison between Sukanya Samriddhi Yojana and Children Mutual Funds

Feature	Sukanya Samriddhi Yojana	Children Mutual Funds
Eligibility	Available only for girl children	Available for both girls and boys
Maximum age limit for opening the account	10 years and below	18 years (also depends on the policy)
Number of accounts	Only one account can be opened per girl child	There is no limit on the number of accounts that can be opened
Rate of interest	The current rate of interest offered for the account is 9.2%	The rate of interest is linked to the market and keeps changing often
Partial withdrawal	A partial withdrawal can be made once the girl child attains the age of 18 years	Partial withdrawal is allowed usually three years into the policy
Availability for NRIs	The account is not available for NRIs	Most of the mutual fund accounts are available to NRIs (even if the child is an NRI)
Minimum and Maximum deposit	The minimum amount that has to be deposited in the account is Rs.1000 The maximum amount that can be deposited in the account is Rs. 1,50,000	The minimum amount that has to be deposited in the account is Rs.500 There is no cap on the maximum amount that can be deposited
Where is the money invested?	The money is invested for development of the country for better infrastructure, better roads, etc	The money is invested in equities and other market linked investments
Term of the policy	It is a long term policy	It is a long term policy

How to decide which is the best investment option between SSA and Children Mutual Fund?

Both Sukanya Samriddhi Yojana account and Children Mutual Fund schemes are good investment schemes with amazing benefits. But Children Mutual Fund is best suited for investors who are high on the risk appetite as it is a high risk- high return investment scheme. Sukanya Samriddhi Yojana account carries no risk but does not offer returns as high as Children Mutual Fund schemes. Sukanya Samriddhi Yojana is well suited for individuals who want to invest in a low risk investment scheme for their girl child.