When it comes to making investments, whose returns will help to secure your financial future, people generally opt for government investment policies because they are safe. Out of these available instruments, the National Savings Certificate (NSC) and Sukanya Samriddhi Yojana (SSY) are the most commonly preferred instruments for the girl child. However, which of the options offers more benefits?
NSC is a safe, fixed-income, long-term, taxable and government-backed instrument of saving, floated by the Government of India. It is the safest form of investment since some of the cash is guaranteed to be recovered and in addition, one gets extra coins. Many financial firms will sport an online NSC calculator where you can put your data to find out the amount of money that you will receive on your investment depending on the current prevailing interest rates.
While the other scheme is a small savings scheme which is particularly meant and targeted for the girl child of the country, the SSY is an initiative. It makes parents and legal guardians save for her education and wedded blessings on her expulsion from childhood. You want to know how much it concerns the money that you have invested, with the help of the Sukanya Samriddhi Yojana calculator, you can have an idea about the value.
Let’s compare these two schemes based on some key factors:
- Eligibility:
Although the NSC is allowed to all the residing people of India, the SSY is available only for Girl children up to the age of 10 years. Therefore, if you are a father or have a daughter, the SSY will be helpful to you otherwise; you can choose the NSC.
- Investment Period:
The NSC comes with a maturity period of 5 or 10 years while the SSY comes with an investment tenure of 21 years from the date of opening of the account or from the date when the girl child turns 21 years of age whichever is earlier.
- Interest Rates:
Both these schemes are good from the interest rates point of view but the present interest rate of SSY is better than the NSC. Nevertheless, it should be understood that the interest rates fluctuate over time.
- Tax Benefits:
While the NSC comes under Section 80C of the Income Tax Act, the SSY also falls under the same section, which makes both of them preferably invested for tax-saving purposes.
- Liquidity:
The NSC allows early encashment after only three years, though there is also an associated cost to it. The SSY has rigid rules regarding withdrawal and offers only partial withdrawals in specific circumstances.
- Investment Limits:
There does not seem to be any investment limits in the NSC while in the case of SSY, corporates can invest up to Rs1.5 lakhs.
- Transferability:
The NSC can be transferred to legal heirs or nominees as early as possible; the SSY account cannot be transferred or closed before the girl reaches the majority 21 years of age.
Conclusion:
In other words, there is no way of determining that one is superior to the other in offering an adequate and accurate depiction of selection. If one is a parent who has a daughter and wishes to prepare for her future, then the SSY is ideal because it has higher rates of returns taxed excepted. However, should you wish to invest in a more diverse choice or do not own a daughter, the NSC may well be a more suitable investment instrument. Tools such as NSC calculator and Sukanya Samriddhi Yojana calculator help to determine the return of these schemes to enhance investment.
