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Sukanya Samriddhi Yojana - What Are the Benefits and Interest Rates of SSY?

sukanya samriddhi yojana benefits and interest rate

You might have heard about the Sukanya Samriddhi Yojana scheme, which was launched for securing female child future. Let's take a look at what this scheme is all about and some of the benefits and interest rates that are offered.

Overview of the Sukanya Samriddhi Yojana

The Sukanya Samriddhi Yojana (SSY) is a government savings scheme targeted at the girl child. Launched in January 2015, the scheme allows parents to deposit money in a savings account for their daughter until she turns 18. The account offers a high interest rate, and tax benefits are also available.

Here are some of the key features of the Sukanya Samriddhi Yojana:

  • The scheme is open to all Indian citizens.
  • A minimum deposit of Rs 250 is required each year.
  • The account has a maturity period of 21 years.
  • The interest rate offered is currently 7.6%. This is subject to change, please check frequently.
  • The account can be opened in the name of a girl child who is below age of 10 years.
  • Tax benefits are available under Section 80C.

Benefits of Investing in Sukanya Samriddhi Yojana

SSY offers an attractive interest rate and several tax benefits. Here are some of the key benefits of investing in Sukanya Samriddhi Yojana:

  • The interest rate on SSY is currently 7.6%. This is much higher than the interest rates offered by most bank deposits.
  • SSY deposits are exempt from income tax.
  • The principal and interest accumulated in SSY are exempt from wealth tax.
  • Partial withdrawal of funds is allowed after the girl child turns 18 years of age.

So if you are looking for a safe and tax-advantaged investment option for your daughter's future, Sukanya Samriddhi Yojana is a good option to consider.

How Does Sukanya Samriddhi Yojana Work?

Sukanya Samriddhi Yojana is a government-run savings scheme for Indian citizens. It's designed to help parents save for their daughter's higher education and marriage expenses. The scheme offers a number of benefits, including tax breaks and high interest rates.

Here's how it works: 

  • You open an account and deposit money into it. The account can be opened by the girl's parents or legal guardians.
  • Maturity date: After 21 years of account opening.
  • Policy holder needed to make a minimum contribution of Rs. 250/ and maximum of Rs. 1,50,000 in a financial year.
  • SSY can be opened for maximum 2 girls in the family.
  • The account earns a 7.6% of compound interest rate yearly, which is higher than most bank deposit rates. 
  • The account will be operated by the guardian, till the girl reaches 18 years.

The scheme has been a big hit with Indian parents, who are looking for ways to save for their daughters' future expenses.

How Can I Withdraw From Sukanya Samriddhi Yojana?

Sometimes, we need to withdraw the funds partially or close account prematurely. Here are the guidelines:

  • Once, a girl attains a age of 18 years or passed 10th standard, you can withdraw funds.
  • You can withdraw, 50% of funds available at the ends of  preceding FY
  • Account premature closure is allowed after 5 years of account or extreme situations:
    • Account holder death
    • Life threatening decease of a/c holder
    • Guardian's death

Sukanya Samriddhi Yojana Scheme Account Opening Procedure at Post Office?

Opening an SSY account is easy. You can open one in any post office within India. 

  • Visit your nearest post office and request form for opening Sukanya Samriddhi Yojana account
  • Fill the form carefully and provide the documents request eg:
    • Aadhar card
    • PAN card
    • Ration card, etc

Calculating Returns on Investment With Sukanya Samriddhi Yojana

Your returns will also depend on the amount of money you invest in SSY and how long it remains invested. Generally speaking, higher deposits and longer terms lead to higher returns. So if you're looking to maximize your returns, it's best to invest as much money as possible and allow it to stay invested for as long as possible.

You can use SSY calculator to get a basic idea of how much you get when you invest amount.

Conclusion

In a nutshell, Sukanya Samriddhi Yojana is a great investment option for any family who want to secure their child's future. The scheme offers high interest rates and a wide range of benefits, making it a great choice for parents looking to save for their child's education and other expenses. So if you're interested in enrolling in SSY, be sure to visit your nearest post office or bank and get started today!

FAQs

Q. How many years you need to pay Sukanya Samriddhi Yojana?

Maturity date is 21 years after the date of opening. You can make withdrawal of the account once the girl child reaches 18 years or passed 10th.

Q. Which scheme is best scheme for girl child?

When it comes to choosing the right savings plan for your girl child, the Sukanya Samriddhi Yojana is one of the best options available. The scheme offers several benefits such as tax exemption on income and maturity amount, higher interest rates when compared to other schemes, and flexible deposits and withdrawals.

SSY provides one of the highest guaranteed interest rates in comparison to other financial instruments with similar characteristics. Even though it is a relatively new scheme, it has been able to gain immense popularity and trust over the years due to its high returns and flexible repayment options.

Moreover, you are not required to pay any tax on the deposited amount or even the maturity amount provided you adhere to all the rules of SSY. This makes it a great option for those who want to save money for their girl child's future without having to worry about paying hefty taxes. What's more, you can also use this scheme from any location in India as there are over 20 authorized banks that allow deposits under SSY across India and all post office branches.

Q. Which is better Sukanya Samriddhi Yojana or PPF?

Its a tough call on which one is better - Sukanya Samriddhi Yojana or Public Provident Fund. Both are popular savings schemes in India and have their own advantages and disadvantages.

Under SSY, the interest rate is 7.6 percent per annum, while PPF offers slightly lower rates of interest (currently 7.1 percent). Both the policy comes under tax free.

SSY has a fixed maturity date of 21 years, after opening the account, while the PPF has a minimum lock in period of 15 years. Also, we can extend PPF another 5 years to n number of 5 years we want.

This extend option available in PPF helps you to give enough time to grow your money and give huge returns using compound effect.

Another advantage, while extending PPF is we can opt for with or without investment, which is an easy way if you're not in a position to invest more but you can wait see your money grow!

Q. What are the disadvantages of Sukanya Samriddhi Yojana?

No financial investment is without its downsides, and the Sukanya Samriddhi Yojana is no exception. One of the major disadvantages of this scheme is the relatively low rate of return compared to other investment plans. The current rate of return for SSY is 7.6%, which might not be attractive enough for investors looking for higher returns.

Another downside to SSY is that it the girl child should turn 18 or passed 10th to make partial withdrawals, which means you cannot withdraw your money before this period elapses. What's more, premature withdrawals are also prohibited and allowed only in extreme situations. So if you're looking for a short-term investment plan, SSY might not be the best option for you.

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