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Tata Capital > Blog > Wealth Services > Guide to saving and investment plans for the girl child in India

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Guide to saving and investment plans for the girl child in India

Guide to saving and investment plans for the girl child in India

Summary

A savings scheme for a girl child is a special savings plan dedicated to keeping daughters financially secure. It helps you build a corpus for your girl child’s future, such as higher education or marriage. You can opt for government-backed savings schemes or those offered by private institutions. The best investment plan for a girl child in India is the Sukanya Samriddhi Yojana (SSY). It is a government initiative focusing on wealth generation to secure the future of your girl child.

A savings scheme for a girl childis designed exclusively for young girls. It promotes early saving and often comes with guaranteed interest and tax benefits.

If your goal is to build a tax-efficient corpus for your daughter’s future goals, it is essential to choose the right savings and investment plan. These goals can include schooling, higher education, marriage, or other milestones. In India, there are several investment plans for a girl child, including government-backed schemes, Public Provident Fund (PPF), mutual funds, child insurance plans, and fixed deposits. Each option offers different returns, risks, tax benefits, flexibility, and investment horizons, making it difficult for you to choose the best scheme for a girl child.

This guide outlines the features, benefits, and limitations of popular investment options so you can choose the most suitable plan for your daughter’s long-term financial security.

Why should you start investing early for your girl child?

When you start investing early, your investments have more time to benefit from compounding, in which returns earn additional returns over the years. Using the power of compounding, you can grow even small, regular investments into a significant corpus by the time your daughter reaches important milestones such as higher education or marriage. Moreover, if you begin early, you will need a lower monthly or annual contribution to reach your goal.

For example, if you make a Rs. 25,000 annual investment for a girl child, starting from her birth until she turns 18, you can build a sizeable corpus. The wealth generated and growth will depend on the actual returns earned. You can use the savings to cover future educational expenses without financial stress.

Also, read – Multi Asset Funds Explained

What are the best saving and investment options for a girl child?

India offers many savings and investment options to help you build a financial corpus for your daughter’s future. Some of these plans focus on safety and guaranteed returns, while others aim for higher long-term growth. To choose the best investment plan for a girl child in India, you will need to understand your goals, investment horizon, and risk appetite.

In the sections below, you will find details on the best schemes for a girl child in India, helping you understand safer, lower-risk options and growth-oriented investments with higher return potential.

Sukanya Samriddhi Yojana (SSY): The flagship scheme

Sukanya Samriddhi Yojana (SSY) is the government-backed flagship savings scheme for a girl child. It is often viewed as the best scheme for a girl child as it is risk-free and helps fulfill long-term goals. It offers attractive returns, strong tax benefits, and a structured investment period. The scheme matures exactly 21 years from the date of account opening. However, you need to make deposits only for the first 15 years. The government reviews the interest rate quarterly and revises it as needed.

Interest rate8.2% p.a., as of June 16, 2026 (Q1 FY2026-27)
Tax benefitDeductions of up to Rs. 1.5 lakh under Section 80C
Tax statusExempt-Exempt-Exempt (EEE) – investment, interest, and maturity amounts are tax-free
EligibilityThe account must be opened before the girl turns 10.
Minimum depositRs. 250
Maximum depositRs. 1.5 lakh per year
Deposit period15 years from account opening
Maturity21 years from account opening or at marriage after 18 years of age
WithdrawalPartially, up to 50% at the age of 18 for higher education

Public Provident Fund (PPF)

The Public Provident Fund (PPF) is another safe, government-backed savings scheme for a girl child. It currently offers around 7.1% annual interest (as of June 16, 2026). However, the interest rate is not fixed, and the government reviews it every quarter. Like SSY, PPF also enjoys EEE tax status. This means your investment, gains, and maturity amounts are tax-free.

You can open a PPF account in a child’s name under a guardian’s supervision. The deposits into PPF are also deductible under Section 80C. However, the total deductions for SSY and PPF investments can together be up to Rs. 1.5 lakh of the Section 80C limit. Thus, PPF is a good complement to SSY because it offers greater flexibility.

Mutual funds and SIPs for a girl child

If you have a long investment horizon of 10 to 18 years, equity mutual funds through Systematic Investment Plans (SIPs) can be the best investment plan for your girl child in India. Their growth potential is higher than fixed-rate schemes such as SSY or PPF. However, they also carry market risks.

Under this category of savings scheme for a girl child, you can consider children’s funds, gift funds, or diversified equity mutual funds. But you must know that there are no guaranteed returns, and you may face ups and downs. You can adopt a balanced approach that uses SSY and PPF as a safe foundation, with mutual funds for long-term growth.

Child insurance and ULIP plans

Most insurance companies offer child-focused plans, including child endowment plans, Unit-Linked Insurance Plans (ULIPs), and money-back policies. These products combine insurance and investment. However, before proceeding, you must understand the purposes of both. A child has no income to insure. Thus, your first priority must be having adequate term insurance for the earning parent.

Many bundled child plans may have higher premiums and lower return potential than buying term insurance separately and investing through SSY, PPF, or mutual funds. You must carefully compare costs, benefits, and returns before deciding which is the best policy for a girl child.

Fixed deposits and recurring deposits

Fixed Deposits (FDs) and Recurring Deposits (RDs) are safe and predictable savings options offered by banks and post offices. They provide fixed returns and are the ideal choice if you prefer stability over growth. However, the interest earned on these deposits is taxable, which can reduce post-tax returns compared with tax-efficient options such as SSY and PPF.

FDs and RDs are best used for short-term goals or as a small, stable portion of your overall investment plan for your daughter.

Also, read – Understanding global investments

What are the government schemes for the girl child in India?

In addition to the Sukanya Samriddhi Yojana (SSY), there are several other government schemes designed to support the education, welfare, and financial security of girl children in India. SSY is a central government scheme available nationwide. However, many states offer their own programs with different eligibility conditions and benefits. Some examples are Ladli, Bhagyashree, Kanyashree, and Bhagyalakshmi schemes.

The rules of these savings schemes for a girl child can change over time. Therefore, you must check your state government’s official portal for the latest details.

How to choose the right plan for your daughter?

Choosing the right plan for your daughter becomes easier when you match each investment to your daughter’s future goals, time horizon, and your risk appetite. The framework you can adopt is as follows:

  • Build a safe foundation with SSY and, if suitable, PPF.
  • Add equity mutual funds through SIPs. Focus on long-term growth for over 10 to 18 years.
  • Secure the earning parent with adequate term insurance.
  • Use safer options for near-term goals and growth-oriented investments for long-term goals.
  • Review your plan periodically and adjust as per your goals.

Comparison of girl child saving and investment plans

The following table differentiates between the various savings schemes for a girl child to provide clarity:

OptionIndicative returnsRisk levelLock-in / TenureTax treatmentBest-suited goal
Sukanya Samriddhi Yojana (SSY)8.2% p.a.Very lowDeposits for 15 years; maturity at 21 years from account openingEEE; eligible for Section 80C deduction up to Rs. 1.5 lakhHigher education and long-term corpus creation
Public Provident Fund (PPF)7.1% p.a.Very low15-year tenureEEE; eligible for Section 80C deduction up to Rs. 1.5 lakhLong-term savings with flexibility
Bank Fixed Deposit (FD)Around 6% to 8% p.a.LowTypically 7 days to 10 years10 years Interest taxable; some tax-saving FDs qualify for Section 80CShort- to medium-term goals
Recurring Deposit (RD)Around 6% to 8% p.a.LowUsually 6 months to 10 yearsInterest taxableDisciplined savings for near-term goals
Equity Mutual Fund (SIP)Around 10% to 14% p.a. (long-term historical range)Moderate to highNo fixed lock-in (except certain schemes)Capital gains tax applicableLong-term goals such as higher education
Child ULIPsMarket-linked; no guaranteed returnModerateTypically 5-year lock-in; longer recommendedTax benefits subject to prevailing tax rulesCombined investment and insurance needs

The returns shown in this table are indicative and based on rates or historical performance available as of June 2026.

Conclusion

It is easier to build a financially secure future for your daughter when you start investing early and choose the right mix of investments. Most parents can consider the government-backed Sukanya Samriddhi Yojana (SSY) as it provides a strong, tax-efficient foundation. PPF and equity mutual funds are also good options as they help add flexibility and long-term growth. It is essential for the earning parent to have adequate term insurance to maintain financial protection. The interest rates, tax rules, and scheme features can change over time, and thus, it is advisable that you inquire before choosing an investment plan for a girl child.

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FAQs

Which is the best saving scheme for a girl child in India?

For most parents, the Sukanya Samriddhi Yojana (SSY) is considered the best policy for a girl child. It offers government-backed safety, attractive interest rates, and tax benefits. Its long-term structure is designed specifically for girls.

What is the current Sukanya Samriddhi Yojana interest rate?

The current interest rate for Sukanya Samriddhi Yojana (SSY), as of Q1 FY 2026-27 (April - June 2026), is 8.2% per annum. The government reviews the interest rate every quarter. It may be revised as needed depending on the existing market conditions.

Is SSY or a mutual fund better for a girl child?

Both SSY and mutual funds serve different purposes. SSY provides safety and tax benefits. On the other hand, equity mutual funds offer higher long-term growth potential with market risk. Many parents use SSY as a safe base and mutual funds for additional growth.

What is the best policy for a girl child?

There is no single best policy for every family. You can try a combination of SSY for savings, mutual funds for growth, and adequate term insurance on the earning parent. It is often more effective than bundled child insurance plans. You must determine what’s suitable for you based on your goals, risk appetite, and time horizon.

Can I open both SSY and PPF for my daughter?

Yes, you can open both SSY and PPF for your daughter after checking the specific rules. They are tax-efficient options and qualify for Section 80C deductions. However, you can only claim a total of Rs. 1.5 lakh as deductions from both together.

What government schemes are available for a girl child?

The main central scheme is the Sukanya Samriddhi Yojana (SSY). Several states also offer schemes such as Ladli, Bhagyashree, Kanyashree, and Bhagyalakshmi. The eligibility, benefits, and conditions vary by state and may change over time.

How much should I invest in my daughter’s education?

To estimate the future cost of education, consider inflation and work backward to calculate the required monthly or annual investment. The amount depends on your target course, time horizon, expected returns, and financial situation.
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