In our modern society, parents are becoming increasingly aware of the need to provide a secure financial future for their children. For the girl child, this is even more crucial, considering the various barriers they face. The Indian government, recognizing the pressing need for such a program, inaugurated the Sukanya Samriddhi Yojana (SSY). This scheme not only empowers the girl child but also ensures her financial stability.
What is Sukanya Samriddhi Yojana?
The Sukanya Samriddhi Yojana is a government-backed savings scheme that can be opened by the parents or the legal guardian of a girl child aged ten years or less. This scheme rouses the essence of financial planning, making it more accessible and profitable. SSY offers a high-interest rate, currently at 7.6% for the financial year 2021-22, which is higher than most savings or investment plans.
Under this scheme, a Sukanya Samriddhi account can be opened with a minimum deposit of ₹250, and a maximum of ₹1.5 lakhs can be deposited in a financial year. The account remains operative for 21 years from the date of its opening, or until the child is married after reaching 18 years of age. The scheme matures after 21 years, and the total maturity amount, along with the Sukanya Samriddhi Yojana interest, is paid to the girl child.
Tax Benefits
Aside from these specifications, parents can also avail of tax benefits under section 80C of the IT Act with the SSY investment. The annual deposits qualifying for tax benefits have been increased from ₹1 lakh to ₹1.5 lakhs. Moreover, the interest accrued and the maturity amount are entirely tax-free. This makes SSY not only a high return investment but also an effective tax-saving tool.
Example of Financial Stability
So, how does the Sukanya Samriddhi Yojana ensure financial stability? Let’s illustrate this with an example. If a parent enters the scheme when their daughter is one year old and invests ₹1.5 lakhs every year for 15 years at the current Sukanya Samriddhi Yojana interest rate of 7.6%, the total investment would amount to ₹22.5 lakhs. However, due to the magic of compounding, the final maturity amount at the end of the scheme would be around ₹74.17 lakhs, providing a substantial financial corpus for the girl child.
Flexibility and Discipline
Interestingly, the scheme permits withdrawals of up to 50% of the account balance after the girl child turns 18. This allows for flexibility in dealing with her higher education costs. Once the child is 21 years old, the account’s entire balance can be withdrawn tax-free, providing substantial financial support for her future.
Another perk is the discipline that this scheme instills in depositors. Consistent investments over a long period train parents to imbibe a savings habit, which is key in securing a child’s financial future.
A plan like Sukanya Samriddhi Yojana gives parents peace of mind, knowing that they have covered their bases towards securing their daughters’ futures. By making prudent investments today, they will ensure substantial financial stability for their daughters when they reach adulthood.
For a scheme with such commendable features, Sukanya Samriddhi Yojana certainly proves to be an impressive choice for those seeking stability and security for their daughters’ futures.
Disclaimer:
Any trading or investment decision should be based on an individual’s understanding of the market and its risks. While the figures and facts used in this article are accurate to the best of authors’ knowledge, investors are advised to conduct thorough research and consultation with a certified financial advisor before proceeding with investments.
Summary:
The Sukanya Samriddhi Yojana (SSY) is a government-initiated savings scheme designed to secure the financial future of the girl child in India. Featuring an attractive interest rate of 7.6% for the financial year 2021-22, SSY enables parents to build a substantial financial corpus for their daughters. The scheme permits an annual deposit of up to ₹1.5 lakhs, which are eligible for tax benefits under section 80C of the IT Act. The interest accrued and the maturity amount are entirely tax-free, making this not only a high return investment but also a useful tax-saving tool. With early and regular investments, compounded over time, SSY can ensure significant financial stability for the girl child.