Detailed Comparison: NPS Vatsalya vs Sukanya Samriddhi Yojana

NPS Vatsalya vs Sukanya Samriddhi Yojana

NPS Vatsalya and Sukanya Samriddhi Yojana (SSY) are two leading government-backed schemes targeted at securing a child’s financial future, but they differ widely in terms of eligibility, flexibility, returns, and overall utility. Here’s an in-depth, structured comparison so parents can make an informed choice.

Basics of NPS and Sukanya Samriddhi Yojana (SSY)

Feature

NPS Vatsalya

Sukanya Samriddhi Yojana

Target Beneficiary

Any child (boy/girl) below 18 years

Girl child only; account before age 10

Minimum Contribution

₹1,000/year

₹250/year

Maximum Contribution

No upper limit

₹1.5 lakh/year

Returns

Market-linked (avg. 9.5–10% p.a.)

8.2% p.a. (fixed, govt. notified)

Maturity

At age 18 (partial), flexible extension

21 years from opening or girl’s marriage at 18

Withdrawals

Up to 25% after 3 years (education/emergency)

Up to 50% at age 18 (for higher education)

Tax Benefits

80C up to ₹1.5 lakh + extra ₹50,000 under 80CCD(1B)

80C up to ₹1.5 lakh, full EEE exemption

Investment and Growth Potential of NPS and Sukanya Samriddhi Yojana (SSY)

NPS Vatsalya offers market-linked returns, primarily investing in equity and debt, with expected returns ranging from 9.5% to 10% per year over the long term, but are non-guaranteed and market-dependent.

Sukanya Samriddhi Yojana provides a fixed, government-backed return of 8.2% per annum for 2025, ensuring safety and predictability.

Lock-in and Withdrawal Rules of NPS and Sukanya Samriddhi Yojana (SSY)

NPS Vatsalya: Funds locked until the child turns 18. Partial withdrawals up to 25% after 3 years allowed for education or emergencies. Full withdrawal possible at 18 or account can be continued.

Sukanya Samriddhi Yojana: Account matures after 21 years, or on a girl's marriage after age 18. Partial withdrawal (up to 50%) at age 18 for higher education.

Tax Benefits of NPS and Sukanya Samriddhi Yojana (SSY)

NPS Vatsalya: Eligible for Section 80C (up to ₹1.5 lakh) and an additional ₹50,000 under Section 80CCD(1B), available under both old and new tax regimes. Tax at withdrawal may apply per prevailing NPS rules.

Sukanya Samriddhi Yojana: Investments, accrued interest, and withdrawals are fully tax-exempt (EEE treatment) under Section 80C.

Ease of Account Opening & Management for NPS and Sukanya Samriddhi Yojana (SSY)

NPS Vatsalya: 100% digital onboarding and management available via platforms like PensionBox, reducing paperwork and making it convenient for tech-savvy parents.

Sukanya Samriddhi Yojana: Requires opening the account at a post office or authorized bank. Partial online management is possible but less user-friendly.

FAQs

Can both schemes be used together?

Yes. Parents of girl children can combine the safety of SSY with the higher growth potential and flexibility of NPS Vatsalya.

Which scheme offers more flexibility in withdrawals?

NPS Vatsalya offers greater withdrawal flexibility after a 3-year lock-in and at age 18; SSY only allows for partial withdrawal at age 18 and maturity withdrawals for education or marriage.