Best Saving Scheme for a Girl Child

All parents dream of securing a bright future for their daughters. If you are the parent of a girl, you want to ensure that she has access to a comfortable lifestyle and financial stability. But with the rising costs of education and inflation, it’s important to start saving early.  

The right savings plan can provide your child with a secure financial foundation. Fortunately, there are several investment plans in India designed specifically for a girl child. And each of them offers unique benefits.  

Now, let’s explore the best savings schemes for your daughter and how they can help you build a strong financial future for her. 

Sukanya Samriddhi Yojana (SSY) 

Sukanya Samriddhi Yojana (SSY) is one of the most popular government-backed tax-saving investment schemes. SSY is designed exclusively for a girl child. It was introduced under the Beti Bachao Beti Padhao campaign.  

SSY offers one of the highest interest rates among all small saving schemes. This makes it an excellent choice for long-term financial planning for your daughter. 

Key Features: 

Eligibility	Parents or the legal guardian of a girl child below the age of 10.
Interest Rate	8.2% per annum (Q4 FY 2024-25)
Maturity Period (Sukanya Samriddhi Yojana Age Limit)	21 years of account opening or until the girl marries after the age of 18
Investment Period	Till 15 years from the date of account opening
Minimum Deposit Amount	Rs. 250
Maximum Deposit Amount	Rs. 1.5 Lakh in a financial year
Income Tax Rebate	Eligible for a rebate under section 80C of the Income Tax Act, 1961.  (Maximum cap of Rs. 1.5 Lakh in a year)

Unit Linked Insurance Plans (ULIPs) 

A Unit Linked Insurance Plan (ULIP) is a life insurance product that combines market-linked investment and the security of life cover. ULIPs help you achieve long-term goals while securing your loved ones. 

Your ULIP premiums not only go towards your life cover but are also invested into market-linked funds of your choice. These funds have the potential to grow at market rates, which can offer respectable returns in the long term. These plans are suitable for long-term goals like the higher education of your daughter, marriage, and more. 

Key Features: 

• Investments are done in equity, debt, or balanced funds based on your risk appetite. 

• Tenure ranges from 10 to 15 years. It has a 5-year lock-in period. 

• Provides life insurance benefits. 

• Dual advantage of insurance coverage and market-linked growth. 

• Provides tax benefits up to Rs. 1.5 lakhs during a financial year under Section 80C and Section 10(10D). 

• Flexibility to switch between funds as per market conditions. 

• Partial withdrawals are allowed after the lock-in period. This is for immediate needs like education fees. 

Public Provident Fund (PPF) 

PPF is another government-backed, tax-free savings scheme known for its stability and long-term benefits. Its interest rate is set quarterly and paid by the government. Even though it is not exclusively for a girl child, it remains an excellent choice due to its stability and guaranteed returns. 

Key Features: 

Interest Rate	7.10% (Q4 FY 2024-25)
Tenure (Lock-in Period)	15 Years   (You can extend it in blocks of 5 years thereafter.)
Minimum Deposit	Rs. 500
Maximum Deposit	Rs. 1,50,000 in one financial year
Tax Benefit	Rs. 1,50,000 in one financial year.
Tenure	15 Years
Nomination Facility	Available
Loan Facility	Available  (The maximum loan amount is 25% of the PPF balance at the end of the 2nd year or the year before applying.)

Post Office Term Deposit (POTD) 

The Post Office Term Deposit scheme helps secure your daughter’s future by encouraging long-term savings. It also offers flexibility and you can open an account anywhere in India. You can even transfer your deposit as needed. It is a safe and simple savings option ideal for careful investors looking for a guaranteed income plan. 

Key Features: 

• You get to choose from a tenure of 1, 2, 3, or 5 years. 

• The interest rate is fixed and revised quarterly. 

• Tax benefits on 5-year deposits under Section 80C. 

• Guaranteed returns with no market risk. 

The Indian Finance Ministry updates the POTD Scheme interest rates at the start of every financial quarter. These rates are linked to government securities. And they usually include a small premium above the government sector yield. 

Interest Rates (Valid from 1st Jan 2025 to 31st Mar 2025): 

Account Tenure	Interest Rate
1 Years	6.9%
2 Years	7.0%
3 Years	7.1%
5 Years	7.5%

National Savings Certificate (NSC) 

NSC is ideal for parents seeking low-risk investments. It's considered one of the best post office tax-saving investments in India. 

Key Features: 

• Interest rate: 7.7% per annum 

• The minimum investment starts at ₹1,000. 

• Fixed interest rate revised quarterly by the government; currently compounded annually. 

• The Lock-in period of five years. 

• Tax deduction up to ₹1.5 lakh for the principal amount invested under Section 80C. 

• Stable returns with complete capital protection. 

Children Gift Mutual Funds 

If you’re a parent seeking higher returns through market participation, Children Gift Mutual Funds are a smart alternative. It helps grow your money over time and falls under the umbrella of Hybrid Funds or Balanced Mutual Funds. Therefore, they help you save for your child’s education, marriage, and other future expenses. 

Children Gift Mutual Funds are classified based on their investment mix: 

• If more than 60% is invested in equity and the rest in debt, it is an Equity-Oriented Balanced Fund. 

• If more than 60% is invested in debt and the rest in equity, it is a Debt-Oriented Balanced Fund. 

Key Features: 

• Invests in a mix of equity and debt funds. 

• Potentially higher returns in comparison to traditional savings schemes. 

• Lock-in period until the child reaches a certain age. 

• Long-term wealth creation potential. 

• You can claim an income tax deduction of up to Rs. 1.5 lakh under Section 80C. 

Takeaway 

Choosing the right savings plan for your girl child depends on your financial goals, risk-taking ability, and investment horizon. While government-backed schemes like SSY, PPF, and NSC offer guaranteed income plans and tax benefits, ULIPs and mutual funds provide growth opportunities.  

The key is to start early and stay consistent. Take the first step today and give your daughter a future of financial independence!