Sukanya Samriddhi Yojana (SSY) interest rates for the January–March 2024 quarter have just increased by up to 20 basis points, according to the government. As a result, the rate is currently 8.2%. Prior to this, it was revised in the April–June 2023 quarter, going from 7.6% to 8%.
A savings programmer called the SSY is designed to give girls access to a safety net in terms of money. A guardian acting on behalf of a girl child under the age of ten may open it. Starting the account requires a minimum deposit of ₹250. Consequently, throughout a financial year, deposits can be as little as ₹250 or as much as ₹1.50 lakh.
On the other hand, a number of financial organizations provide mutual fund programmers that are specifically designed to help pay for a child’s further education. These funds offer investment opportunities but come with inherent market risks because they are given by companies such as Tata, SBI, HDFC, and Axis.
The following lists a few higher education programmers for kids and compares them to Sukanya Samriddhi Yojana:
Tata Young Citizens’ Fund:
With a minimum lock-in of five years or until the child turns eighteen, Tata’s Young Citizens’ Fund is an open-ended scheme that caters to youngsters and provides a balanced approach between debt and equity investments.
SBI Magnum Children’s Benefit Fund:
In order to meet children’s future financial needs, SBI’s programmers invests in debt, money market instruments, and a managed equity portfolio with the goal of long-term capital growth and consistent income.
There is a five-year minimum lock-in term, or until the child reaches adulthood.
HDFC Children’s Gift Fund:
The goal of HDFC’s open-ended fund is to satisfy future financial demands by using equities and debt assets to produce long-term capital appreciation.
Additionally, there is a minimum 5-year lock-in period or until the child becomes 18 years old.
Axis Children’s Gift Fund:
The plan offered by Axis Mutual Fund concentrates on long-term capital growth using debt, equity, and money market instruments to meet the future financial needs of children.
The minimum lock-in time is five years, or until the child reaches adulthood.
The Sukanya Samriddhi Yojana (SSY) and the aforementioned private higher education investment programmes are contrasted in the following table based on several attributes:
| Attributes | Sukanya Samriddhi Yojana (SSY) | Tata Young Citizens’ Fund | SBI Magnum Children’s Benefit Fund | HDFC Children’s Gift Fund | Axis Children’s Gift Fund |
|---|---|---|---|---|---|
| Provider | India Post (Government) | Tata Mutual Fund | SBI Mutual Fund | HDFC Mutual Fund | Axis Mutual Fund |
| Eligibility | Girl child below 10 years | Any child who has at least 5 years to turn into an adult | Any child who has at least 5 years to turn into an adult | Any child who has at least 5 years to turn into an adult | Any child who has at least 5 years to turn into an adult |
| Minimum Deposit | ₹250 | – | – | – | – |
| Maximum Deposit (per year) | Up to ₹1.50 lakh | – | – | – | – |
| Interest Rate | 8.2% (January-March 2024) | Depends on the market scenario | Depends on the market scenario | Depends on the market scenario | Depends on the market scenario |
| Lock-in Period | Until maturity or marriage | 5 years or until 18 years | 5 years or until adulthood | 5 years or until 18 years | 5 years or until adulthood |
| Investment Objective | Opportunity for parents and guardians to invest in their girl child’s financial future | Long-term capital appreciation | Regular income with capital appreciation | Long-term capital growth with regular income | Long-term capital growth |
| Risk Profile | Low | Moderately high | Moderately high | Moderately high | Moderately high |
| Tax Benefits | Deductions under Section 80C | – | – | – | – |
Also Read: SMALL SAVINGS SCHEMES AND INTEREST RATES IN 2024
Impact of Increased Interest Rates
The increase in interest rates is expected to have a positive impact on the savings and investment climate in the country. It will encourage people to save more money, particularly in the small savings schemes offered by the government.
The increase in interest rates will also benefit investors who already have money invested in these schemes. Their returns will increase, which will provide them with a higher level of income.
Conclusion
The increase in interest rates for small savings schemes is a welcome move by the government. It is expected to boost savings and investment in the country, which will help to stimulate economic growth.
Additional Information
In addition to the increase in interest rates for the Sukanya Samriddhi Yojana and the three-year savings scheme, the government has also announced the following changes to the interest rates for other small savings schemes:
- Post Office Time Deposit (POTD): 7.5%
- National Savings Certificate (NSC): 7.5%
- Public Provident Fund (PPF): 7.5%
- Kisan Vikas Patra (KVP): 7.5%
- Senior Citizen Savings Scheme (SCSS): 7.5%
These changes will be effective from January 1,
