Every parent aims to provide the best for their children and the Sukanya Samriddhi Yojana (SSY) is one such scheme that can help you secure your child’s future.
SSY is a government-backed scheme that allows you to invest for your daughter. To promote this scheme, the government has set attractive interest rates and also offers tax benefits**.**
Here are the key features:
- SSY is a risk-free scheme backed by the government of India.
- The minimum investment amount is ₹250 and the maximum is ₹1,50,000 per year.
- The current interest rate is set at 8.20% (Jan-Mar 2024 quarter).
- The account must be opened before the daughter turns 10 years old.
- The maturity period is 21 years from the account opening date and you can invest up to a maximum of 15 years.
- The SSY account continues to earn interest even after 15 years when no deposit is made.
- The investment amount in SSY can be claimed as a deduction u/s 80C.
- The maturity amount is entirely tax-free.
Who can open an SSY account?
The parents or legal guardians of a girl child can open an account in her name anytime before she reaches the age of 10 years. The only condition is that the girl child must be an Indian resident and a family can open up to 2 accounts for two girls.
What tax benefits does SSY offer?
SSY is a EEE (exempt exempt exempt) scheme, which means that you can claim a tax deduction of up to ₹1,50,000 against your investment amount u/s 80C. Further, the interest income and the maturity amount are also tax-free.
How to open an SSY account?
You can open an account at any designated bank or post office. You are just required to fill out the application form along with the deposit amount and required documents like birth certificate of the child, identity proof, etc.
Is a premature withdrawal allowed?
Yes, a partial withdrawal of up to 50% of the balance of your SSY account is allowed for higher education of the girl child. But, the daughter must have either attained the age of 18 years or passed tenth standard, whichever earlier.
Closure on maturity
The SSY account matures after 21 years from the date of account opening.
However, the SSY account can be closed before 21 years for the purpose of marriage of girl child (1 month before or 3 months after the date of marriage).
How much should I invest to create a corpus of ₹70 lakh?
The maximum investment allowed per year is ₹1,50,000 which is ₹12,500 per month. You can invest for 15 years, and earn an annual compound interest of 8.20% (revised quarterly).
So, if you start investing for your daughter from the time she is born, you’d have invested a total of ₹22,50,000 at the end of 15 years.
The investment will continue to grow till your daughter turns 21. Hence, after 21 years, the maturity amount would be ₹69,27,578.
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