One is a promise from the government. The other is a probability from the market. The right answer for most families is a ratio, not a winner.
Short answer: ₹1.5 lakh a year in SSY for 15 years grows to about ₹71,82,119 at the current 8.2% by year 21 — guaranteed and entirely tax-free. The same ₹12,500 a month in an equity SIP for 21 years reaches roughly ₹93,57,746 at 9% and ₹1,42,33,428 at 12% — if the market cooperates, minus capital-gains tax. The honest frame: SSY is the floor you cannot fall through; equity is the upside you cannot count on.
SSY rate 8.2% for Q2 FY 2026-27, reviewed quarterly · SIP outcomes are assumptions, not predictions · Indicative, as of August 2026
| Route (₹12,500/month equivalent) | Value at year 21 | Guaranteed? | Tax on the way out |
|---|---|---|---|
| SSY at 8.2% (deposits years 1–15) | ≈ ₹71,82,119 | Yes — sovereign | Nil — SSY is fully exempt (EEE) |
| Equity SIP at 9% for 21 years | ≈ ₹93,57,746 | No | LTCG above the annual exempt limit |
| Equity SIP at 12% for 21 years | ≈ ₹1,42,33,428 | No | LTCG above the annual exempt limit |
SSY figure assumes the current 8.2% holds for the full term — the rate is reviewed quarterly, so the true number will drift with future notifications. SIP figures are pure assumptions at commonly used return bands.
SSY's rate risk is real but bounded. The rate has ranged between 7.6% and 9.2% over the scheme's life. Your deposits earn whatever is notified each quarter — but never a negative year, never a 2008. Equity's range is the whole point and the whole problem: 21-year Indian equity outcomes have historically been strong, but the money is needed on a specific birthday, and a bad final three years can take a fifth off the corpus exactly when college fees are due. That is why the standard discipline — shifting equity gains to debt in the last 3–4 years — matters more for a child's goal than for your own retirement, which can wait out a crash. A daughter's admission cannot.
The old pitch was "SSY gives you 80C". Under the default new regime there is no 80C (now Section 123, old regime only) — the deduction is gone for most filers. What survives untouched is the part people undervalue: SSY's interest and maturity are fully exempt in everyone's hands, in both regimes. And because SSY interest is exempt income, the clubbing rules that tax a child's FD interest in your hands simply have nothing to bite on. An equity SIP's gains, by contrast, are taxable capital gains — modest at current LTCG rates, but not nil.
SSY: girl under 10 at opening, one account per daughter (two per family, more only for twins/triplets), ₹250 minimum and ₹1.5 lakh maximum per year, deposits run 15 years, maturity at 21 years from opening, and 50% is withdrawable at 18 for higher education. Miss a year's minimum and the account goes dormant until a small penalty revives it. The deposit-date habit from our PPF page applies here identically: pay before the 5th to earn that month's interest — the same ~₹887-per-year arithmetic at the ₹1.5 lakh limit.
The question is not SSY or mutual funds — it is what ratio. A serviceable default: fund SSY to whatever level makes the non-negotiable part of the education goal safe at 8.2%, and SIP the rest for upside. Families that max SSY at ₹1.5 lakh and still have surplus have answered the question already; families choosing between them at ₹5,000 a month should usually let the guarantee win first — a floor matters more when the total is small.
At the same ₹12,500 a month, SSY reaches about ₹71,82,119 by year 21 at the current 8.2%; an equity SIP reaches ₹93,57,746–₹1,42,33,428 at 9–12% assumptions. Equity's expected value is higher; SSY's worst case is incomparably better.
For most people, yes. The deduction (Section 123, old regime only) was never the core of SSY — the sovereign 8.2%, fully tax-exempt interest and maturity, and immunity from clubbing are, and all of those survive in the new regime.
Half of the balance, once she is 18 or has passed Class 10, for higher-education expenses with proof of admission. Full maturity is at 21 years from opening; marriage after 18 also allows closure.
Deposits earn the rate notified each quarter, so a cut lowers future accrual on the whole balance. The rate has moved between 7.6% and 9.2% historically — variability, but with a sovereign floor and no negative years.
Related: SSY scheme page · SSY Calculator · Cost of education · NPS Vatsalya
The official pages this page is checked against. If one of them disagrees with us, it wins.
Written and checked by the PaisaSamajh editorial desk · Last reviewed: 24 August 2026 · How we check this →