Should you invest in Sukanya Samriddhi Scheme ?

You invest in the PPF for 15 years and then do as you please with the maturity amount. Some buy a house while others spend on children's marriage or education. The instrument itself does not offer a goal. On the other hand, the SSY nudges a parent to save for specific goals--the daughter's education and marriage. But experts also doubt if the government will be able to monitor the usage of the funds.

However, since this is a debt based scheme, the SSY won't be able to generate very high returns. If a couple starts putting away `1.5 lakh a year in the SSY when the child is 10, the corpus would grow to `28.89 lakh in 11 years, by the time she is 21.If the girl is 5 years old and they save for 14 years, the investment would grow to `42.88 lakh by the time she is 19.

This might appear attractive by today's standards but it will not be enough to pay her college fees in the year 2031. The interest rate too would not be as high as it is right now. This is why experts advise that the SSY should be used in combination with other investments, such as equity funds, for saving for a child's future goals. A foreign degree can easily cost upwards of `25 lakh at today's prices.