There are various schemes available in the Indian financial market for people who want to invest and grow their wealth. You can opt for a low-risk, guaranteed return scheme like a fixed deposit, or can choose something specifically tailored to meet a particular requirement, like the Sukanya Samriddhi Yojana. Go for the best investment options which can fulfil your financial needs aptly.
What is the difference between Sukanya Samriddhi Yojana and FD?
Both Sukanya Samriddhi Yojana and fixed deposits are types of investments available for the residents of India. Both yield significant returns after maturity. While an FD offers a similar interest rate as a recurring deposit, Sukanya Samriddhi Yojana provides with a higher interest rate for the given tenor.
Sukanya Samriddhi Yojana is a saving scheme specially made for parents to help save for their girl child’s education and financial independence. It is available nationwide in post offices and government-backed financial institutions. Presently, it offers 9.20% interest a year, which is significantly higher than the fixed deposit and recurring deposit interest rates. It also comes with maturity benefits.
Fixed deposits are financial products where you invest a certain sum of money for a fixed tenor. FDs offer a higher interest rate than an ordinary savings account and are independent of the fluctuation in the financial market. This feature makes it one of the best investment options in India. The interest rate is fixed at the time of deposit and remains the same during the investment tenor. Financial institutions offer interest rates of up to 8.75% for tenors of 12 to 60 months.
Sukanya Samriddhi Yojana and FD provide safer investment options than choices like liquid fund or debt funds. However, there are particular instances where one can prove beneficial over another. Let’s take a look at the comparative study – Sukanya Samriddhi Yojana vs. Fixed deposits.
Difference between the investment options
- Sukanya Samriddhi Yojana is available for a girl child under ten years of age. Only the account holder can withdraw and utilise the funds.
On the other hand, any Indian national can open an FD in a financial institution. They can choose the tenor according to their preference and enjoy the benefits.
- An investor has to deposit between Rs. 250 and Rs. 1,50,000 every year for the Sukanya Samriddhi Yojana. If someone fails to pay the minimum amount of Rs. 250, he/she will have to pay a penalty and the account will be closed.
For a fixed deposit, you have to pay between Rs. 100 and Rs. 1,50,000 every year. However, there will be no penalties applicable if you somehow cannot pay the due.
- If a financial institution offers the facilities, an applicant can apply for an FD online and skip the hassle of visiting a financial institution for the purpose.
Applicants of Sukanya Samriddhi Yojana have to reach the financial institution to apply and go through the document verification process. At present, there are no online facilities available for this scheme.
- Under the Sukanya Samriddhi Yojana, the deposit has a lock-in period of 21 years from the opening date (which can be extended further). An investor cannot withdraw the money or avail an advance against it.
In case of an FD, an investor can apply for a loan against fixed deposit to meet any unforeseen monetary requirement. Financial institutions will offer them a percentage of the deposited amount as a loan. A borrower will enjoy attractive interest rates as the advance is secured against the invested amount.
Companies like Bajaj Finserv provide up to 75% of the deposited amount as a Loan Against Fixed Deposit. You can also take a personal loan to pay for an emergency that requires more funding. Bajaj Finserv has pre-approved offers for personal loans, home loans, business loans, and a range of other financial products. It not only simplifies the process of availing finances, but also saves you time. You simply have to provide some necessary details to check your pre-approved offers.
A fixed deposit offers more flexibility as it is available for anyone who wants to invest their wealth to earn a significant return. Sukanya Samriddhi Yojana is aimed only at girl children under 10 and offers a guaranteed high return. An investor can carefully consider the options to select the best investment options for salaried employees available to him or her.