Sukanya Samriddhi Yojana Vs. Chit Funds – Which is better?

Sukanya Samriddhi Yojana

One aspect is evident with the Indian Prime Minister openly propagating the Beti Bachao Beti Padhao philosophy. The government is deeply concerned about the welfare of the girl child. For time immemorial, the girl child in India has always been considered a burden that reduces or gets nullified on giving her off in marriage. Hence, there were many instances of parents indulging in child marriages to get rid of their ‘so-called’ burden, their daughter.

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Sukanya Samriddhi Yojana
Now, the times have changed, with the awareness that the girl child is never a burden on the parents but is as much a bundle of joy as the male child. The Indian government has been quite vocal on this issue since 2014, the year when it introduced the Sukanya Samriddhi Yojana that guaranteed prosperity to the girl child. So here is one saving instrument that Indian girls can proudly claim to belong to them and no one else. In fact, boys are not even eligible to open a Sukanya Samriddhi Yojana account. Let us now understand what the Sukanya Samriddhi Yojana is and how it squares up against chit funds, a popular source of saving money for Indians.

The Sukanya Samriddhi Yojana

This savings plan is exclusively for the girl child alone. Here is the plan in brief.
  • The Sukanya Samriddhi Yojana was launched on January 22, 2015.
  • The scheme’s structure remains the same. However, the Sukanya Samriddhi Yojana interest rate has changed depending on the market position. However, this plan still offers the highest interest rates among contemporary banks and savings deposits in India.
  • Who can open the account? – Any girl child below ten years of age can open the Sukanya Samriddhi Yojana account. The scheme allows for opening only one account in the name of the girl child in India. Banks and post offices are authorized to open these accounts. It is freely transferable from one post office or bank to another.
  • The minimum deposit is Rs 250, whereas the maximum can go up to Rs 1.50 lakhs in a financial year.
  • Generally, the scheme does not allow any withdrawals. However, one can withdraw the amount exclusively for the purpose of higher education for the girl child.
  • The account stands prematurely closed if the girl gets married after attaining 18 years of age. The account stands matured on the completion of 21 years from the date the account was opened.
  • Income Tax benefits are permissible, such as the deposit qualifies for IT deduction under Sec 80 of the Act. Similarly, Sec 10 of the Act allows the interest earned from the account to be tax-free.

What is the Sukanya Samriddhi Yojana interest rate?

The Sukanya Samriddhi Yojana interest rate is decided by the Union Government and has changed various times since the plan’s inception. Here is the interest rate table for your reference since the scheme’s launch.


Rate of Interest

03.12.2014 to 31.03.2015


01.04.2015 to 31.03.2016


01.04.2016 to 30.09.2016


01.10.2016 to 31.03.2017


01.04.2017 to 30.06.2017


01.07.2017 to 31.12.2017


01.01.2018 to 30.09.2018


01.10.2018 to 30.06.2019


01.07.2019 to 31.03.2020


01.04.2020 to 31.03.2022


A mere glance through the scheme shows that the rate of interest offered by the government on deposits made under the Sukanya Samriddhi Yojana is the highest. Despite the Sukanya Samriddhi Yojana interest rate falling from as high as 9.2% to 7.6%, it remains the highest in the industry.
So, how does it square up against chit funds, a popular savings source among Indians? So, let us look at how the funds launched by chit fund companies work.

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What are chit funds?

Chit funds are a type of rollover savings and credit funding scheme where a group of people decides to invest a fixed sum every month for a pre-decided period on specific terms and conditions mutually agreeable to each group member.
The difference between the traditional chit funds and those organized by modern-day chit fund companies is that the group formation, the operation, and the terms and conditions are set by the companies rather than resting with the individual group members. However, the concept and ideas behind the scheme remain the same.

The comparison between chit funds and Sukanya Samriddhi Yojana

You cannot compare chit funds with the Sukanya Samriddhi Yojana because it is more like comparing apples with oranges. However, the interest rate is the only area where you can draw a semblance of comparison. Chit funds allow you to earn substantially higher interest than other saving instruments. People generally view the modern-day chit funds as a means of making money online. So, if anyone asks you, “Kis app se paise kamaye,” you can point to Money Club, one of the best chit fund platforms in India.

Which of the two is the better investment option – Sukanya Samriddhi or Chit Funds?

A lot depends on how you view both these instruments. If you are looking for paise kamane wale apps or a solution to Kis app se paise kamaye, Sukanya Samriddhi Yojana does not stand a chance.
The Sukanya Samriddhi Yojana is a compulsory savings scheme for the prosperity of the girl child because there are penalties for not depositing the minimum amounts every year. On the other hand, participating in chit funds is optional and has nothing to do with the girl child’s welfare. Nevertheless, there are Indians who save money through chit funds exclusively for the welfare of their female children. However, there are no legal compulsions like you cannot open chit funds in the male child’s name.
Therefore, if you are concerned purely with the girl child’s prosperity, the Sukanya Samriddhi Yojana is the best. The Sukanya Samriddhi Yojana interest rate of 7.6% should encourage every natural guardian in India to open a savings account in their daughter’s name immediately. But, if you look for ‘Kis app se paise kamaye,’ then chit funds organized by one of the best chit fund platforms like Money Club should be the ideal option.