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Which is the best investment in your daughter’s future?
The Sukanya Samriddhi Yojana, a small savings scheme initiated by the Government of India, is designed to promote financial security for young girls. Launched as a part of the ‘Beti Bachao, Beti Padhao’ campaign, this savings scheme aims to encourage parents to save for their daughters’ education and marriage expenses. In this blog, we will delve into the details of the Sukanya Samriddhi Yojana, how it works, and why it’s a valuable investment for parents.
What is Sukanya Samriddhi Yojana?
The Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme exclusively for the girl child. It offers attractive interest rates, tax benefits, and a secure environment for accumulating funds for the future needs of a girl child. Here’s how it works:
1. What are the Eligibility Criteria for Sukanya Samriddhi Yojana?
- The scheme is open for parents or legal guardians of a girl child below 10 years of age.
- It’s important to note that only one account can be opened per girl child.
2. How to open the SSY account? And the initial Deposit to be made towards the account:
- Parents can open an SSY account in any authorized bank or post office.
- An initial deposit, which can be as low as Rs. 250, is required to open the account.
- Subsequent contributions can be made with a minimum of Rs. 250 and a maximum of Rs. 1.5 lakh in a financial year.
3. What is the Tenure of the Sukanya Samriddhi Yojana account?
The account matures after 21 years from the date of opening or when the girl gets married after reaching the age of 18.
4. What is the current Interest Rate under the Sukanya Samriddhi Yojana?
The interest rate is revised quarterly and is typically higher than most other government-backed savings schemes. The current rate is 8% per annum compounded annually for Q3 FY 23-24.
5. What are the Tax Benefits of the SSY scheme?
- Investments in SSY are eligible for deductions under Section 80C of the Income Tax Act.
- The interest earned and the maturity amount are also tax-free.
6. How to Withdraw the amount deposited:
- Partial withdrawals can be made when the girl child reaches the age of 18, but the maximum amount cannot exceed 50% of the balance at the end of the preceding financial year.
- Complete withdrawal can be made on the girl’s marriage after attaining the age of 18.
7. What are the documents required to open an SSY account?
The documents required to open an SSY account are mentioned below:
- SSY account opening form.
- The birth certificate of the girl child must be submitted at the time of opening the account.
- The ID proof and address proof of the depositor must be submitted at the time of opening the account.
- A medical certificate has to be submitted in case multiple children are born under one order of birth.
- Any other documents that are requested by the bank or post office.
8. What are the benefits of the SSY scheme?
- Affordable Payments
- Educational expenses covered
- Attractive Interest rates
- Guaranteed returns
- Convenient Transfer
- Tax benefits
Example of Sukanya Samriddhi Yojana:
Let’s consider an example to better understand how SSY works.
Suppose Mr. and Mrs. Sharma have a 6-year-old daughter, Aanya. They decide to open an SSY account for her with a yearly deposit of Rs. 50,000 into the account.
- After 21 years (when Aanya turns 27), the account matures.
- The total contribution made over 21 years would be (Rs. 50,000 x 21 years) = Rs. 10,00,000.
- Assuming a conservative interest rate of 7.6% per annum, the total amount at maturity would be approximately Rs. 21,97,960.
This sizeable amount can be used for Aanya’s higher education, marriage, or any other significant financial need she may have. Moreover, the Sharma’s would enjoy tax benefits throughout the investment period and at the time of withdrawal.
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Conclusion:
Sukanya Samriddhi Yojana is a fantastic investment option for parents looking to secure their daughter’s financial future. The scheme not only offers excellent interest rates and tax benefits but also aligns with the government’s mission to empower and educate young girls. As an investor, it’s essential to stay updated on the current interest rates and other terms and conditions of the scheme, as these may change over time. So, if you have a daughter under the age of 10, consider opening an SSY account to provide her with a strong financial foundation for a successful future.
