Sukanya Samriddhi vs Children Mutual Fund

The Sukanya Samriddhi Yojana account is a savings scheme offered by the Indian Government to parents of a girl child for her future expenses. Children mutual funds are funds offered exclusively to children and they come with high interest rates.

It is first essential to know and understand what these two types of saving schemes are, before we move ahead to realize their differences.

Here are the main differences between Children Mutual Fund and Sukanya Samriddhi Yojana:

Features Children Mutual Fund Sukanya Samriddhi Yojana
Who can open? Can be opened in the name of a boy or a girl child. Can be opened in the name of a girl child only.
Limitations There are no limitations in regard to the number of accounts that can be opened for a child. Only one account can be opened for each girl child.
Age Limit The maximum age limit for opening a CMF account is 18 years. The maximum age limit for opening a SSY account is 10 years.
Is Birth Certificate necessary? Birth Certificate is not necessary for opening a CMF account. Birth Certificate is compulsory for opening a SSY account.
Partial withdrawals Partial withdrawals can be made from CMF accounts after the completion of 3 years. Only one partial withdrawal can be made from SSY accounts after the girl child reaches the age of 18 years. The withdrawal amount is limited to a maximum of 50% of the deposited amount.
Nomination Nomination feature is offered on CMF accounts by a number of fund houses. Nomination feature is not available on SSY account.
Insurance Some CMFs also offer insurance cover. SSY does not offer insurance cover.
Online payment options CMFs offer multiple online payment options. SSY does not offer online payment options.
NRI Investments CMFs are generally offered for NRI children as well. SSY accounts cannot be opened for NRI children.
Minimum Deposit Minimum annual deposit amount is as low as Rs.500. Minimum annual deposit amount is as low as Rs.1,000.
Maximum Deposit There are no limits for deposits in the case of CMFs. A maximum amount of Rs.1.5 lakh can be deposited annually.
Penalty There are no penalties for non-payment. A penalty of Rs.50 is charged for non-payment.
Tax benefits Tax benefits are not guaranteed. Avail guaranteed tax benefits under Section 80C of the Income Tax Act.
Eligibility Some CMFs require the child to be at least 3 months old to be eligible for the account. There are no such minimum age requirements in the case of SSY.
Interest rate The interest rates are variable and depends on the performance of the funds in the market. The interest rate is fixed for SSY.
Where you can open? You can open a CMF account at different public and private sector financial institutions. You can open a SSY account at any one of the 28 authorised banks or the post office.
Risk factor The risk factor is relatively higher. There are no risk factors in the case of SSY.
Maturity benefit In the case of CMF, the maturity benefit payout is dependent on the exit load. In the case of SSY, withdrawal of the maturity benefit can be made at any given point in time after the account holder turns 21 years old.
Fund The fund invested in CMFs are further invested in equities, debt instruments, and so on. The fund deposited in SSY accounts are used for the development of the country.
Application fee On the basis of the seller, CMFs may or may not charge an application fee. No application fee is charged in the case of SSY accounts.

What is Sukanya Samriddhi Yojana?

The Sukanya Samriddhi account was initiated by Prime Minister Narendra Modi with the intention for parents to be able to help save and hence be able to afford their girl child's education and marriage with financial independence, promising a great future. As of now, such an account can be opened in the post office or at certain banks in and around the country. The interest rate collected in this account as of 2019-20 was 7.6% per annum whereas for the year 2020, the interest rate that was used for the account was 7.6% by the account holders. This type of account and savings product also come with maturity benefit.

What is Children Mutual Fund?

Children Mutual Fund are specially designed for child’s future with higher risk factor but higher interest rate allowing to have an extra edge when it comes to helping in beating the inflation to a good extent. These mutual funds are generally available for both the girl and boy child. Some funds offer special maturity benefits.


It is not the number of advantages that counts to make this choice between the two savings instruments and instead is based on the risk and requirements of the parent and their willingness to take risk. SSY has no risks involved but for parents who would want to fight inflation, might find children mutual funds more useful.

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