Sukanya Samriddhi Yojana vs Fixed Deposit

The Sukanya Samriddhi Yojana scheme promotes parents to save money for their daughter’s wedding and academic expenses. Fixed deposits are financial instruments that provide investors with higher interest compared to regular savings accounts.

The Sukanya Samriddhi Yojana is a scheme that was launched with the main aim of securing a girl child’s future. Fixed Deposits are popular because of their flexible lock-in periods and high interest rates compared to various savings schemes.

Comparison of Sukanya Samriddhi Yojana and Fixed Deposit

Category Sukanya Samriddhi Yojana Fixed Deposit
Eligibility The parent or legal guardian can open an account under the name of a girl child. However, the child must be less than 10 years old. Any Indian citizen, irrespective of their gender and age, can open an account at a financial institution.
Interest Rate The rate of interest is decided by the central government. Currently, the rate of interest is 7.6%. The bank revises FD interest rates from time to time. Depending on the tenure and the amount, the interest rates would vary. The rate of interest offered by ICICI Bank ranges between 4.70% to 6.70%. The interest rates offered by HDFC Bank ranges between 3.50% and 6.90%. Most banks offer a higher interest rate for senior citizens.
Investment Amount A minimum deposit of Rs.250 must be made at the time of opening the account. The maximum deposit that can be made in a year is Rs.1.5 lakh. Depending on the bank, the minimum amount of money that must be deposited to open an account would vary. In the case of State Bank of India, the minimum amount is Rs.1,000. However, the minimum amount is Rs.10,000 in the case of Axis Bank.
Lock-In Period The lock-in period is 21 years or when the girl child gets married, whichever is earlier. However, partial withdrawal is allowed after 18 years for higher education purposes. The lock-in period can range between 7 days and 10 years.
Investment Duration The account holder must invest in the SSY account for a duration of 14 years. Any deposits made is a one-time investment. The amount can be claimed at the time of maturity.
Partial Withdrawal Up to 50% of the accumulated amount can be withdrawn for the purpose of marriage or higher education. However, partial withdrawal is allowed only once the account holder attains the age of 18 years. Relevant documents will also need to be submitted. Partial withdrawal is not allowed.
Premature Closure Premature closure is allowed in case the account holder passes away or in case the money is required for the treatment of life-threatening diseases. In the case of medical purposes, the account can be closed only after the completion of 5 years. Premature closure is allowed. However, the account holder will have to pay a penalty in case of premature closure. Depending on the bank, the penalty charges will vary.
Mode of Operation An SSY account cannot be opened online. You must visit the bank branch and submit the relevant documents to open an SSY account. An FD account can be opened online. The operation of an FD account can also be done online.
Penalties Deposits must be made every year. In case deposits are not made, the status of the account will be changed to ‘Account under default’. A Rs.50 fine will have to be paid to reactivate the account. Any investments in an FD account is one-time. Penalties are levied only in the case of pre-closure.
Tax Benefits Under Section 80C of the Income Tax Act, tax benefits up to Rs.1.5 lakh can be availed for any investments made towards the scheme. Under Section 80C of the Income Tax Act, tax benefits up to Rs.1.5 talk can be availed. However, the lock-in period of the account must be at least 5 years and the interest that is generated is taxable.
Extension of Account An SSY account matures after the completion of 21 years. However, account holders are allowed to continue the account. Extensions are not allowed in the case of an FD account. The entire amount has to be withdrawn on maturity.
Number of Accounts The girl child is allowed to have only one account under her name. For the purposes of tax, an individual can have only one account under his/her name within a year. However, another FD account can be opened for the next financial year.


  1. What is the minimum tenure of Tax Saver FDs?
  2. Tax Saver FDs come with a fixed tenure of 5 years.

  3. In the case of an FD account, when does an individual become liable to pay Tax Deducted at Source (TDS)?
  4. In case the interest that is generated for all deposits exceeds Rs.40,000, the individual is liable to pay TDS. In the case of senior citizens, the interest that is generated must exceed Rs.50,000.

  5. Can loans be availed against a Sukanya Samriddhi Yojana account?
  6. No, loans cannot be availed against an SSY account.

  7. How can individuals transfer funds to an SSY account?
  8. Individuals can transfer funds to an SSY account by using one of the below-mentioned methods:

    • Via demand draft, cheque, or cash at the bank branch or post office.
    • By adding the SSY account as a beneficiary. Individuals can use net banking facility to transfer funds.
  9. What are the documents that must be submitted to open an SSY account?
  10. The below-mentioned documents must be submitted to open an SSY account:

    • Account opening form
    • Birth certificate of the girl child with the name mentioned on it
    • The parent or legal guardian’s photograph
    • Know Your Customer (KYC) document of the legal guardian or parent

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