I want to invest for my daughter's future. I am confused between Sukanya Samriddhi Yojana and equity mutual funds. Which is a better option to create around 50-60 lakh for her when she turns 20. My daughter is now 6 years old. It is a non-negotiable goal for me. I don't want to take risks. Kindly advise. How much should I invest to reach my target money?
By Raghvendra Nath, MD, Ladderup Wealth Management
Both products have a different purpose. Mutual funds are tools for capital appreciation, while Sukanya Samriddhi Yojana (SSY) is a fixed income product.
While mutual funds are liquid instruments. Investments in the Sukanya Samriddhi Yojana Fund would be locked till your daughter turns 21.
So if you wanted the money exactly when your daughter turned 20 years then in that case it won’t be possible. It is recommended to create a diversified portfolio of the above two investment avenues. To create a corpus of ₹50-60 lakh in the next 14 years, you will need a SIP of ₹12,000 per month. You can allocate ₹3,000 per month in the Sukhanya Samriddhi Fund and allocate the remaining ₹ 9,000 to the Mirae Asset Large Cap Fund, DSP Mid Cap Fund, and Kotak Emerging Equity Fund in equal proportions.
Since the time horizon is long, it is advisable to have a larger allocation towards equity as over the long term the volatility in equity reduces to a large extent.
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