By Prashant Mahesh
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.
Source : The Economic Times
