You can earn the best returns by investing in Sukanya Samriddhi Yojana.
To improve girls’ education and financial condition, the Central Government launched Sukanya Samriddhi Yojana (SSY). SSY aims to provide financial support at the time of marriage and the marriage of two daughters. Although in the SSY scheme, at what time the girls will get money, we have said clearly nothing about it. However, an attempt has been made to make the SSY scheme quite flexible. Investors, however, need to remember five essential years before investing in SSY. For this, the girl’s age, the time spent in her studies, and marriage are essential.
Sukanya Samriddhi Yojana Interest Rate 9.2% Lock-in Period: Till the girl turns 21. After the girl turns 18, up to 50% of the balance can be withdrawn. After 18 years, if the girl gets married, you can withdraw all money before maturity. Tax Benefit: Deduction from 80C for investment up to 1.5 Lakhs.
Investment limit: Rs 1,000 to Rs 1.5 Lakhs. Benefit: Highly taxable, tax-free, and guaranteed return. Ideal scheme for parents wishing to create an education fund for a child up to 10 years.
Account opening in SSY (0-10) years Under SSY: you can open an account only for girls below 10 years of age. A certificate of birth is necessary for this. Under the SSY scheme, you can open accounts of just two daughters of a family. Also, you cannot open two accounts of one girl. Age has a significant role in taking full advantage of the SSY scheme.
Five years of SSY
The first opportunity to withdraw funds from the account in SSY comes after the completion of five years of opening the account. According to the rules, this permission can also be given only in severe medical conditions. Even after this, if, due to some reason, there is the closure of the SSY account, then interest is paid according to the post office savings bank account.
Ten years of SSY
If the girl becomes 10 years old, then she can operate her SSY account herself. She can deposit the amount in her SSY account herself. However, the parents of the child can also deposit the amount in this SSY account.
15 years of SSY
To open an account with SSY, the initial deposit amount should be at least 250 rupees. Up to Rs 1.5 lakh can be deposited annually in the SSY account.
To keep the SSY account active, it is necessary to deposit the amount for the first 15 years. For a 9-year-old girl, it is necessary to deposit the amount in the SSY account till the age of 24 years. From 24 to 30 years of age of the girl child (till the account matures), interest will be paid on the amount deposited in the SSY account.
SSY is a long-term investment scheme: There are many provisions to withdraw a small amount or total amount from the SSY account before it is over, although these are difficult.
Eighteen years of SSY is the next time to withdraw money from the SSY account when the girl’s age is 18 years. There are clear rules about this money used only by the girl and not by anyone else. You can withdraw a maximum of 50% of the last years from the SSY account balance for the girl child’s higher education.
For this, only a written application is not enough. Still, a confirmed admission offer or fee slip of an educational institute will have to be shown to prove that they need the money for the education of the girl child. There is also a limit to withdraw cash from the SSY account, and it cannot be more than the fees or other admission expenses, and they also needed all the evidence for this.
21 years of SSY The SSY account can be operated for 21 years by opening an account. If the girl is nine years old at the time of opening the account, they will mature it at 30 years.
However, the SSY account can be closed even before 21 years, and the girl’s guardian can withdraw the amount if they give an affidavit for the marriage of the girl child and declare that the girl has reached the age of 18 years. Sometimes this kind of condition can become an obstacle in the operation of the SSY account.
SSY’s charm
SSY is a good investment, giving tax-free returns with a sovereign guarantee. It is an investment with exit-exit-exit (EEE) status. The amount deposited in the SSY account is exempt from income tax under section 80C, and the return on the maturity of SSY is tax-free. The SSY accounts can open in a post office or bank having a core banking system facility.
Alternative investment
SSY is a scheme designed to meet the financial needs of girls. Public Provident Fund (PPF or PPF) can be one of its options. It is a 15-year scheme in which there is a facility to withdraw some money and also loan. The PPF account can also be extended after the first 15 years in a five-year block, and they can use the fund for other purposes.
According to the rules, they expect the interest rates of SSY to be higher than PPF. The government fixes the interest rates for both schemes quarterly, and they fix its rates according to the G-Sec Yield. They offer a premium of 75 basis points on SSY compared to the G-Sec rate while it offered 25 basis points on PPF.
Presently, the annual interest on SSY is 8.5 percent, while it is eight percent on PPF. They do not pay interest on the amount deposited in SSY after the 10th of any month. If compared to traditional life insurance plans, the SSY score is better if it also added a term insurance plan to it.
The conclusion:
Estimate how much fund you may need for a child’s marriage and education.SSSY is really like a debt investment plan; investing in stocks is a better investment according to long-term needs. Depending on the child’s need, some funds can be invested in SSY, and it can invest some in other mediums.
We cannot say the complete dependence on SSY to be correct. This also applies to those whose investments have crossed the limit of Rs 1.5 lakh under section 80C. Similarly, take term insurance for the financial security of the family.
According to the children, if their age is close to 10 years, it is still okay for them, but keep it as a supplement in the portfolio.
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