Why Save for Your Daughter Through Sukanya Samriddhi Yojana (SSY)?

Saving for your daughter’s higher education and marriage-related expenses is a huge responsibility. It would help if you accumulated a sufficient corpus for this vital task. Sukanya Samriddhi Yojana Scheme or SSY is a small savings scheme, launched by the Government exclusively for the parents of the girl child. It can make your daughter a millionaire at 21. Invest in the Sukanya Samriddhi Account and gift your daughter a bright future. 

The Sukanya Samriddhi Yojana is a tax-free small savings scheme for the girl child. You can open the SSY account in your daughter’s name with a minimum deposit of only Rs 250 a year. You can open a Sukanya Samriddhi Account at a public-sector bank or post office before the girl child turns ten years old. You can deposit up to a maximum of Rs 1.5 lakh during the financial year. 

The SSY account would mature 21 years after the date of opening. However, you have to deposit money only for the first 15 years of the scheme. Opt for partial withdrawal when your girl child turns 18 years if you require money for her higher education. You may withdraw up to 50% of the SSY account balance at the end of the previous financial year. You can also close the account prematurely for your daughter’s marriage after she turns 18 years old.

You must ensure that your financial goals remain protected from inflation which erodes the purchasing power of money. Interest rates offered by banks on deposits are usually below the rate of inflation. Sukanya Samriddhi Yojana provides an interest rate of 7.6% for the July-September quarter. The returns above inflation help you attain long-term financial goals sooner.

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SSY account earns the highest tax-free return with a sovereign guarantee. The SSY scheme falls under the exempt-exempt-exempt (EEE) category. You can claim a tax deduction up to Rs 1.5 lakh a year under Section 80C of the Income Tax Act. Both the interest you earn and the maturity amount is tax-free. 

You must invest Rs 1.5 lakh per year when your girl child is one-year-old. The deposits made for 15 years accumulate a corpus of around Rs 64 lakh when she turns 21. On maturity of your SSY account the accrued funds, including interest, go directly to your daughter. She may continue with the scheme and earn interest even after maturity. 

The SSY scheme has a lock-in period of 15 years. It gives you the time to accumulate funds for your daughter’s higher studies and marriage expenses. You enjoy returns above the bank FDs and the Public Provident Fund. In a nutshell, you can gift your daughter financial independence at a young age. 

For any clarifications/feedback on the topic, please contact the writer at cleyon.dsouza@cleartax.in

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