ELSS vs SSY: Where to Bet for Your Girl Child?
If you’re considering investing in your girl child’s future but are confused between Equity Linked Saving Scheme (ELSS) and Sukanya Samriddhi Yojana (SSY), you’re not alone. With so many investment options available, it can be overwhelming to select the right one. In this article, we’ll help you understand the difference between ELSS and SSY, and which one is better suited for your child’s future.
ELSS
Equity Linked Saving Scheme (ELSS) is a tax-saving mutual fund that has a lock-in period of three years. ELSS has the potential to offer high returns as it invests in equity and equity-related instruments. It’s an excellent investment option for financially active investors who are willing to take risks.
ELSS has a tax-saving benefit under Section 80C of the Income Tax Act, where you can claim tax deductions up to Rs.1.5 lakhs per year. ELSS invests in stocks, and hence it is not advisable to invest a substantial amount in ELSS, as there is a risk of loss due to market fluctuations.
SSY
Sukanya Samriddhi Yojana (SSY) is a government-backed saving scheme that’s specially designed to focus on the girl child’s welfare. It offers guaranteed and tax-free returns, making it one of the best investment options for the girl child’s future.
SSY has a lock-in period of 21 years or until the girl child reaches the age of 18. After this period, the maturity amount is tax-free. The account can be opened up to ten years from the girl child’s birth, where the minimum deposit amount is Rs.250 per annum, and the maximum deposit amount is Rs.1.5 lakhs. The interest rate offered under SSY is currently 7.6%, which is subject to change based on the prevailing market rates.
ELSS vs SSY
ELSS and SSY are entirely different investment options, making it difficult to compare them. ELSS has a higher risk-reward ratio, whereas SSY offers guaranteed returns. The right choice between ELSS and SSY depends on your investment preferences, risk tolerance, and investment goals.
If you’re looking for an investment option to save tax and are willing to take a higher risk, ELSS can be a good option. However, if you’re looking for a safer investment option that offers guaranteed returns and focuses on your girl child’s future, SSY can be a better choice.
Conclusion
Investing in your girl child’s future requires careful consideration of all the investment options available. ELSS and SSY are both good investment options, and you should choose the one that suits your investment goals, risk tolerance, and financial objectives.
If you’re capable of taking risks and want to invest in equities, ELSS can be a good option for you. However, if you’re looking for a safer investment option, SSY can provide guaranteed returns and focus on your girl child’s future. Whatever your choice may be, remember to plan your finances and invest wisely to secure your girl child’s future.
