Summary of this article
Sukanya Samriddhi Yojana offers a dedicated savings option for eligible girl children.
PPF, NSC and Post Office Time Deposits cater to different financial goals.
The right scheme depends on the beneficiary’s age, investment horizon, needs and objectives.
Raksha Bandhan is a day of celebration for brothers and sisters, but on this occasion, one can also provide meaningful financial contributions towards their sister's future. Instead of limiting the celebration to materialistic gifts solely, families can consider government-backed savings schemes that offer predictable returns and can help build a meaningful corpus.
Among the major government-backed schemes are some of the most popular ones, such as Sukanya Samriddhi Yojana, PPF, NSC, and five-year post office time deposits.
Sukanya Samriddhi Yojana
The Sukanya Samriddhi Yojana (SSY) is one of India’s most popular government-backed savings schemes. This scheme is specifically for girl children. SSY is designed to help parents build a financial net for their daughter’s education and future needs. As of now, SSY offers an interest rate of 8.2 per cent per annum, as per SBI Securities. These returns make this scheme one of the highest-yielding small savings schemes available. Deposits for this scheme can be made for 15 years, while the account matures after 21 years from the date of opening.
Public Provident Fund
Public Provident Fund (PPF) can be considered when the objective is broader long-term wealth creation rather than a scheme that is exclusively meant for girls. It currently offers a 7.1 per cent interest rate and has a maturity period of 15 years, making it suitable for investors with a long investment horizon. One can start a PPF investment with merely Rs 500 as per the National Savings Institute. This account can be retained indefinitely without further deposit after maturity with the prevailing rate of interest.
NPS Vatsalya
NPS Vatsalya is a government-backed pension scheme that is designed for minors to start building a retirement corpus from a young age. Parents and guardians can start building a retirement corpus for their children. The scheme is linked to the National Pension System. This also requires a minimum contribution of Rs 1,000 per year. These contributions are invested in market-linked instruments, so the returns will vary. The account continues up until the child turns 18 years of age, after which it can be converted into a normal NPS account, as per ICICI.
National Savings Certificate
For investors who are looking for a shorter fixed tenure option, the National Savings Certificate (NSC) can be considered. The scheme currently offers 7.7 per cent interest, as per ICICI. The maturity period for this is five years. NSC can be useful when financial goals are planned for less than a decade.
Post Office Time Deposits
Post Office Time Deposits provide another government-backed option for those who prefer fixed tenures. For July-September 2026, the rates range from 6.9 per cent for one year to 7.5 per cent for five years, as per SBI Life. These deposits can be considered for medium-term goals where investors want a specific maturity period.
The best investment scheme depends on your sister’s needs and goals. For a young girl, SSY is particularly relevant; for individuals who have long-term goals with requirements for flexibility, PPF may be considered, while NSC and Post Office Time Deposits can suit medium-term goals.
