The launch of Sukanya
Samriddhi Yojana (SSY) by the government for the girl child has sparked
considerable interest given its tax benefit and interest rate higher than
Public Provident Fund. The SSY offers 75 basis points (bps) higher than the
10-year government bond as against 25 bps by the PPF. For 2014-15, the interest
rate for PPF is 8.7% while the SSY offers 9.1%.
But, wealth planners
believe subscribers should put money in this product along with an investment
in equity products. This is because
interest rates could fall in the future. Given that the investors are investing
for a period of 10 years or more, a combination of equity mutual funds and SSY
will generate better returns.
"Depending on
their risk profile, investors could use SSY along with a combination of equity
mutual funds/child funds to meet long-term asset allocation goals for their
girl child," says Vishal Dhawan, chief financial planner at Plan Ahead
Wealth Advisors.
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