SIP vs Sukanya Samriddhi Yojana: Which Is Better for Your Child's Future? Here's a Detailed Comparison

In today’s fast-paced and expensive world, planning for your child’s future is essential. Two of the most popular investment options for parents are the Sukanya Samriddhi Yojana (SSY) and Systematic Investment Plan (SIP) in mutual funds. Each has its pros and cons, and understanding the numbers can help you make the right decision.

You may even consider splitting your investment between the two to diversify and balance your portfolio. But if you’re choosing one, here’s a side-by-side comparison to guide you.

1. Sukanya Samriddhi Yojana (SSY)

• Who is it for? Only for parents of a girl child (must be under 10 years at the time of opening).
• Investment Start: From as low as ₹250 per year
• Interest Rate: 8.2% (government-fixed and guaranteed)
• Investment Tenure: 15 years (maturity at 21 years)
• Risk: None (backed by the Government of India)
• Tax Benefit: EEE (Exempt at all stages – investment, interest, and maturity under Section 80C)

Calculation (SSY)

• Monthly Investment: ₹5,000
• Tenure: 15 years
• Total Invested: ₹9,00,000
• Returns Earned: ₹8,27,321
• Total Maturity Amount: ₹17,27,321
• Risk Level: Low (safe and guaranteed)

2. Systematic Investment Plan (SIP)

• Who is it for? Open to all; flexible for long-term wealth creation
• Investment Start: As low as ₹500/month
• Expected Return: 12% (market-linked, not guaranteed)
• Investment Tenure: Flexible
• Risk: Market-dependent (moderate to high depending on the fund)
• Tax Benefit: Limited (ELSS funds only under Section 80C)

Calculation (SIP)

• Monthly Investment: ₹5,000
• Tenure: 15 years
• Total Invested: ₹9,00,000
• Estimated Returns: ₹14,79,657
• Total Maturity Amount: ₹23,79,657
• Risk Level: Medium to High (subject to market performance)

So, What Should You Choose?

• Choose SSY if you prefer safe and guaranteed returns, especially for your daughter’s education or marriage.
• Choose SIP if you’re open to market risks and want to build a larger corpus in the long term.

Pro Tip: Many financial advisors suggest doing both—investing in SSY for safety and in SIP for growth—based on your risk appetite and financial goals.