Sukanya Samriddhi Account: Why you should not invest!

Published: March 14, 2015 at 6:51 pm

Last Updated on March 26, 2019

Here is the single most important reason for not investing in the  Sukanya Samriddhi Account.

Fact: One can open an account if one has a daughter aged 10 or less (11 upto Dec. 2015 as a relaxation)

One must invest for 14 years after the account is opened.

Partial withdrawal of 50% is allowed when she turns 18.


The account will mature 21 years after opening (this is independent of age of the daughter).

Why does this make the case even worse?

Have a look at the table and the graph (which conveys the same information)

Sukanya Samriddhi Account-chart

Sukanya Samriddhi Account

Points to ponder:

1) As mentioned in the above post, education is more important than marriage. You can withdraw 50% only and at age 18. You may need the money to pay college admission fees before she turns 18.

2) Education inflation is 10%  (conservatively!). You need to plan early and invest a sizeable about in equity. There is no other way about it. Don’t waste 1.5L a year in this because it is EEE. Not all things offered free in life are good. In fact, most of them are not!

3) You can invest only for 14Y (why?!!!!). Where you will invest for the remainder of the duration before education and marriage goals? You cant invest in equity then. You have missed the window of opportunity.

4) Most kids will be 22 or at best 23 when they will enter post-graduation. If your child is 4Y or more now, this money will not be useful to you!

5) Marriage expenses inflation is 10%  (conservatively!). You need to plan early and invest a sizeable about in equity. There is no other way about it. Don’t waste 1.5L a year in this because it is EEE. Not all things offered free in life are good. In fact, most of them are not!

Do not lock your money in this scheme because it is EEE, because it says Sukanya!

Value liquidity, value inflation-beating returns. Use equity oriented mutual funds +PPF or debt mutual funds for your child – be it a girl or a boy.

6) If you are reading this, this scheme is not meant for you! For God’s sake this is meant for those who fix their child’s marriage the moment she is born. This is for those parents who are itching to marry their daughter off regardless of her dreams. This is for those who don’t care what her child studies as long as she can be married off.

* Thanks to someone with the profile name bhaiyamafkaro in reddits IndiaInvestments page for pointing this out.

Do share if you found this useful

How to profit from content writing: is our new ebook for those interested in getting side income via content writing. It is at available at a 50% discount for Rs. 500 only!
Did you know? We have more than 900+ videos on YouTube to explore! Join our YouTube Community!

Use our Robo-advisory Excel Template for a start-to-finish financial plan!

Join our courses in exclusive Facebook Groups!

  • 520+ members are now part of our new course: How to get people to pay for your skills! (watch 1st lecture for free). Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show how to achieve by showcasing your skills and building a community that trusts you and pays you!
  • Goal-based portfolio management! Join 2125+ members and get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free!  One-time payment of Rs. 3000 only. No recurring fees! Life-long access to videos (10+ hours content)  in an exclusive Facebook Group! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.

Want to check if the market is overvalued or undervalued? Use our market valuation tool (will work with any index!) or you buy the new Tactical Buy/Sell timing tool!
We publish mutual fund screeners and momentum, low volatility stock screeners .every month.
About the Author Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation to promote unbiased, commission-free investment advice. He conducts free money management sessions for corporates and associations based on money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association, IIST Alumni Association. For speaking engagements write to pattu [at] freefincal [dot] com
About freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any paid articles, promotions, PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions, seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a young earner.

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download)
Free android apps