Sukanya Samriddhi Yojana: A Savings Scheme for the Girl Child.

Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme aimed at securing the future of the girl child in India. Launched as part of the Beti Bachao Beti Padhao campaign, SSY offers attractive interest rates and tax benefits to encourage parents to save for their daughters’ education and marriage expenses.

Key Features of Sukanya Samriddhi Yojana:

1. Account Opening: Parents or legal guardians can open an SSY account for a girl child below the age of 10 years. Only one account is allowed per girl child, and a maximum of two accounts are permitted in a family (in the case of twins or triplets).
2. Deposit and Interest: The minimum deposit amount for an SSY account is Rs. 250, and the maximum deposit allowed in a financial year is Rs. 1.5 lakh. The interest rate is set by the government and is currently at 7.6% (as of February 2024), compounded annually. The interest earned is tax-free.
3. Account Maturity: The SSY account matures after 21 years from the date of opening or when the girl child gets married after the age of 18 years, whichever is earlier. Partial withdrawals are allowed after the account holder attains the age of 18 years, for purposes like higher education or marriage.
4. Tax Benefits: Contributions made to the SSY account are eligible for tax deductions under Section 80C of the Income Tax Act. Additionally, the interest earned and the maturity amount are also tax-free.

Example: Suppose Mr. and Mrs. Sharma have a daughter named Riya, who is 5 years old. They decide to open an SSY account for her and deposit Rs. 50,000 annually. By the time Riya turns 18, the total amount deposited would be Rs. 9.5 lakhs. At an interest rate of 7.6%, the maturity amount would be approximately Rs. 19.5 lakhs, which can be used for her higher education or marriage.

In conclusion, Sukanya Samriddhi Yojana is a beneficial savings scheme for parents looking to secure their daughter’s future financially. Its tax benefits and attractive interest rates make it a prudent investment option for the girl child’s long-term financial needs.

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Krishna Rath is a SEBI Registered Investment Adviser, and since 2015 has been educating netizens on investments and insurance. Krishna is a fee only SEBI RIA and is Odisha's first SEBI RIA. With background in IT, Krishna is changing the advisory space with new innovations in AdvisoryTech.

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