Sukanya Samriddhi Yojana: Investment for Your Girl's Bright Future

24 Aug 2022

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As per an age-old saying, educating the girl child results in the progress of the country. Despite this, there are several sections in the society where the girl child is considered a burden and denied equal opportunities. To change this narrative and provide girls with equal standing, the Government of India introduced the Sukanya Samridhhi Yojana scheme. Let us understand how this scheme is the ideal investment for your daughter's bright future.

What is the Sukanya Samriddhi Yojana?

The Sukanaya Samriddhi Yojana is a savings-cum-investment scheme designed to encourage parents to invest money for their daughters. It aims to better the stature of the girl child in Indian society. The Government Launched the Sukanaya Samriddhi Yojana scheme in 2015 under the 'Beti Bachao Beti Padhao' campaign to improve the prospects available to the girl child and inspire parents to save money for their daughter's education and, later, marriage.

Sukanya Samriddhi Yojana Benefits for the Girl Child

The Sukanya Samriddhi Yojana goes a long way in ensuring your girl child gets equal access to education and other life opportunities. It is geared toward ensuring her financial security and giving her control and independence over her finances. The idea behind the scheme is to provide the girl with financial autonomy so that she does not have to rely on her spouse or other male members in her family for money.

The 21-year maturity period from the date of the account opening of the scheme allows parents to gradually build a corpus for their daughters' future from the time of their birth. The girl can use the funds accumulated in the account to pay for her higher education, marriage, and other expenses as required from time to time.

Is Investing in Sukanya Yojana Enough for Education Expenses?

As a daughter's parent, you can deposit anywhere from Rs 250 to Rs 150,000 and earn a comparatively higher interest rate on the deposits. Assuming you deposit Rs 100,000 for 15 years, you can create a lump sum of 15 Lakhs from principal investment alone. Additionally, the scheme comes with compounding benefits which means you can earn returns on returns. It thus allows you to create a generous lumpsum that accrues inflation-adjusted returns and sufficient funds to pay for your daughter's education and marriage.

Moreover, the scheme falls under Section 80C of the Income Tax Act, 1969 and qualifies for the Exempt Exempt Exempt or EEE status. The funds deposited, interest earned, and the maturity amount are entirely tax-free. These Sukanya Samriddhi Yojana scheme details demonstrate that investing in the scheme may be sufficient to pay for your daughter's education expenses, so long as you continue investing in it diligently.

Reasons to Invest in the Sukanya Samriddhi Yojana

There are various Sukanya Samriddhi Yojana benefits that make it a worthwhile investment. They are as under:

  • You can begin the investment with a small sum of only Rs. 250.
  • SSY is one of the highest interest-earning schemes in India, and the Government revises the interest rate every quarter.
  • The scheme reduces the burden of coming up with a significant sum of money to pay for your daughter's education as it allows gradual investments.
  • The investment duration of the scheme is only 15 years, while interest is paid on deposits for up to 21 years from the date of account opening when the account matures.
  • You can open separate, individual accounts for up to two girls from the same family, with the exception of twins/triplets born from subsequent pregnancies.
  • As the investor, you can enjoy tax deduction benefits of up to Rs 150,000 per annum, and you don't need to pay taxes on the interest income or the maturity amount.
  • As a long-term investment scheme, the Sukanya Samriddhi Yojana scheme provides compounding benefits and opportunities for lumpsum corpus creation.
  • The girl serves as the primary account holder, and the parent/guardian may only operate the account on her behalf till she turns 18.
  • Partial withdrawals of up to 50% are permitted after the girl turns 18 years old, or completes her 10th standard education, whichever is earlier.

How to Invest in Sukanya Samriddhi Yojana?

You need to open a dedicated Sukanya Samriddhi account to invest in the scheme. You can open the account by visiting nearest Bank of Baroda Branch. You must fill the form and submit it with the necessary documents – the child's birth certificate, photographs of the child and the parent/guardian, and the ID and address proof documents of the parent/guardian. You must deposit a minimum of Rs 250 at the time of account opening, after which you can make deposits via cheque, cash, demand drafts, and online transfers.

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