Sukanya Samriddhi Yojana or SSY is a social security scheme that was developed in the government’s ‘Beti Bachao, Beti Padhao Campaign.’ Investing in this insurance plan allows parents to provide a girl — ten or younger — with financial stability.
Under Sukanya Samriddhi Yojana, a girl’s name account can be opened for a term of 21 years in any private or governmental bank. The investment term for SSY is 21 years from the opening date of the account.
How does this scheme work?
As parents, you can invest at least ₹1,000 per year and ₹1.5 lakh in the Sukanya Samriddhi Yojana account of your daughter. These deposits may only be made for the first 15 years after the account is opened. After this, the compound interest is paid in the account.
Subsequently, when your daughter is an adult, the sum accumulated may be helpful to support her higher studies, to start a company, open a business, pursue her dreams or even for marriage.
What is the eligibility criteria for it?
To open an account under the Sukanya Samriddhi Yojana, one must take care of the following:
- The account must be opened before the girl turns 10.
- Either parents or a legal guardian can open the account in the name of the girl child.
- There are only two accounts for a family of two daughters; if there is a third girl, no third account may be opened under the SSY.
- More than one account for the same girl child is not allowed under Sukanya Samriddhi Yojana
- If the minimal investment of ₹250 is not invested, the account becomes “default” and earns interest under the system as applicable.
- It is not permissible to prematurely close accounts under Sukanya Samriddhi Yojana, nevertheless, in specific instances premature closure can be done in case of —
- Girl's unfortunate death
- If the girl child is being treated for life-threatening conditions
- The Guardian's untimely death
7. When a girl turns 18, she can run her own Sukanya Samriddhi Yojana
What are the benefits of Sukanya Samriddhi Yojana?
Sukanya Samriddhi Account has a greater interest rate than other savings plans that give the child financial certainty. It offers 7.6 percent interest with a withdrawal capacity of a maximum of 50 per cent. The government declares the applicable interest rate for each financial year for that year, whilst the interest is added annually. By maturity, your assets will expand – thanks to the power of compounding – in your Sukanya Samriddhi Yojana account.
Significant Savings in Tax
You get a tax deduction under section 80C of the Revenue Tax Act 1961 for your child's future contributions to Sukanya Samriddhi Yojana. You can therefore claim tax deductions on investments up to ₹1.5 lakh.
In addition, there are also tax savings benefits on the interest paid and the amount received after expiry or withdrawals. This is an exempt and free (EEE) system under the supervision of the Ministry of Revenue. Sukanya Samriddhi Yojana is one of the most popular investment plans.
Guaranteed Maturity Benefits
Your girl child will receive direct payment for your account amount under Sukanya Samriddhi Yojana, including the accumulation of interest (or policyholder). So this programme lets your daughter make her own choices in life, and helps her become financially independent and empowered.
A further benefit of investing with Sukanya Samriddhi Yojana is that, even beyond the maturity period, your cumulative savings continue to accrue compound interest until the account holder closes the account.
Sukanya Samriddhi Yojana is one of the greatest investments to create a suitable corpus by the age of 18. The Sukanya Samriddhi Yojana has a sovereign guarantee, while its EEE status means that both parents and girls enjoy various benefits.
So you can invest a share of your funds in favour of the Sukanya Samriddhi Yojana so that your daughter can finance their high school and career ambitions despite inflationary constraints.