The Sukanya Samriddhi Yojana (SSY) is a savings scheme designed to provide financial security and savings for the education and marriage of female children.
Here are some key points to consider about SSY:
You can open an SSY account with a minimum deposit of Rs 250, and the maximum deposit allowed is Rs 1.5 lakh per year. It is mandatory to make yearly deposits for 15 years from the account's opening date.
If you fail to make the annual deposits, your account will go into 'Account under default.' However, you can reactivate it by paying a Rs 50 fine per defaulted year within 15 years from the account's opening.
The account matures 21 years from the account's opening. During this period, the account continues to earn interest.
If you want to accumulate approximately Rs 50 lakh by the time your daughter reaches 21, you should aim for an annual deposit of Rs 1,11,400, assuming an 8% interest rate.
This translates to a monthly commitment of Rs 9,283 or a daily contribution of Rs 305. This calculation is based on a 5-year-old girl with the account maturing in 2044.
You can use an SSY calculator to estimate the maturity value based on your chosen deposit amount.
The scheme matures after 21 years, with annual deposits for the first 15 years and no obligation to deposit in the subsequent six years. Interest continues to accumulate during this time.
SSY offers significant tax advantages, including: (A) Deposits up to Rs 1.5 lakh qualify for a deduction under Section 80C of the Income Tax Act.
(B) The interest earned on the deposit is tax-free and compounded annually. (C) The maturity amount is also tax-free.
In certain situations, premature withdrawal is allowed. You can withdraw after five years if the post office or bank determines that maintaining the account poses financial hardship due to medical issues or the guardian's passing.
Additionally, the marriage of the beneficiary after turning 18 allows for early account closure.
Sukanya Samriddhi Yojana is a beneficial savings scheme that not only helps in securing a girl child's future but also offers tax benefits to the investors.