The birth of a daughter brings joy as well as many responsibilities. Every parent wishes for their daughter’s future to be secure, educated, and self-reliant. To achieve this, it’s essential to plan for the right investments from childhood. Currently, two major options are most popular: the Sukanya Samriddhi Yojana (SSY) and the Systematic Investment Plan (SIP). Both schemes offer long-term investment advantages, but their nature, returns, and risk levels differ.
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What is the Sukanya Samriddhi Yojana (SSY)?
The Sukanya Samriddhi Yojana is a safe and guaranteed scheme of the Central Government, launched specifically for girls. Under this scheme, parents or guardians can open an account in the daughter’s name. Investments can be made with a minimum of ₹250 per year, with a maximum limit of ₹1.5 lakh per year.
This scheme currently offers an annual interest rate of 8.2 percent (for the October-December 2025 quarter). Investments are required for 15 years, but the account matures after 21 years. It is a completely tax-free scheme, with a deduction of up to ₹1.5 lakh under Section 80C.
If an investor deposits ₹2,000 every month, the annual investment will be ₹24,000, and the total investment over 15 years will be ₹3.60 lakh. At the end of 21 years, this amount reaches approximately ₹11,08,412 at an interest rate of 8.2 percent.
What is a SIP (Systematic Investment Plan)?
A SIP is an investment vehicle in which a fixed amount is invested in mutual funds every month. SIPs are market-based, meaning they fluctuate, but they are known to deliver excellent returns over the long term.
You can start investing in a SIP with just ₹500 per month. The lock-in period is flexible, meaning you can withdraw money at any time. Tax benefits are available only for investing in ELSS funds, which offer a deduction of up to ₹1.5 lakh under Section 80C.
If a person invests ₹2,000 every month in a SIP for 15 years, the total investment will be ₹3.60 lakh. At an average return of 12 percent, this amount can grow to approximately ₹951,863, while at a 14 percent return, it can reach ₹1130,414. If the investment period is extended to 21 years, returns of approximately ₹2086,013 are possible at 12 percent and approximately ₹2701,305 at 14 percent.
Difference between SSY and SIP
Sukanya Samriddhi Yojana is a government-guaranteed scheme, while SIP is market-linked. SSY offers zero risk and guaranteed returns, while SIP offers higher returns with higher risk. Investments in SSY remain locked in for 21 years, while SIP offers easy withdrawals when needed. Both schemes are tax-advantaged under Section 80C, but this benefit is limited to ELSS funds in SIP.
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Which should you choose?
If your goal is secure and guaranteed returns, the Sukanya Samriddhi Yojana is the right option. However, if you are looking for higher returns with less risk and your daughter is still young, a long-term SIP investment may yield better returns. It’s wise to create a balanced combination of both schemes—one as a safe investment and the other as a growth-oriented investment.
