Sukanya Samriddhi Yojana (SSY) is an ideal savings scheme for parents who want to secure their daughter’s future while enjoying great returns and tax benefits. Launched under the government’s Beti Bachao, Beti Padhao initiative in 2015, this scheme offers an impressive interest rate of 8.2%, providing a safe and secure investment option for long-term financial planning. With disciplined monthly investments, parents can accumulate up to Rs. 80 lakhs by the time their daughter turns 21.
Here’s a detailed look at how this scheme works and how it can benefit you and your daughter.
What is Sukanya Samriddhi Yojana?
Sukanya Samriddhi Yojana is a government-backed savings scheme specially designed to benefit the girl child. It allows parents or guardians to open an account for their daughter at any authorized bank or post office branch. The scheme offers a competitive interest rate, making it one of the best long-term investment options. In addition, it provides tax benefits under Section 80C of the Income Tax Act, making it even more attractive for parents planning for their daughter’s higher education or marriage.
Who Can Open an SSY Account?
To open an account under Sukanya Samriddhi Yojana, the girl child must meet the following conditions:
- Age: The account can only be opened for girls below 10 years of age.
- Resident Status: The girl child must be a resident of India.
- Family Limit: A maximum of two accounts can be opened per family (one for each daughter). In cases of twins or triplets, special provisions are made to allow for additional accounts.
Investment and Tax Benefits in Sukanya Samriddhi Yojana
One of the major attractions of Sukanya Samriddhi Yojana is the tax benefits. Deposits made into the SSY account are eligible for tax deductions under Section 80C, up to a limit of Rs. 1.5 lakh per year. This tax saving applies not just to the principal amount, but also to the interest earned, which is completely tax-free.
The interest rate for Sukanya Samriddhi Yojana is set quarterly by the government. Currently, it stands at an attractive 8.2%. Over time, this compounding interest can lead to substantial growth of the funds, providing a solid financial foundation for the girl child.
How Much Can You Earn?
Let’s break down how you can accumulate up to Rs. 80 lakh by investing in Sukanya Samriddhi Yojana. Suppose you begin investing when your daughter is 10 years old, and you deposit Rs. 12,500 monthly. In a year, this would amount to Rs. 1.5 lakh. The account will mature when your daughter turns 21, giving you an investment horizon of 11 years.
Here’s what you can expect:
- Principal Amount: Rs. 1.5 lakh annually for 11 years = Rs. 16.5 lakh
- Interest Earned: At 8.2% annual interest, the total interest earned will be around Rs. 46.77 lakh.
- Total Amount: The sum of the principal and interest will be approximately Rs. 63.27 lakh by the time the account matures.
However, the benefits don’t end here. You also get significant tax savings based on your income bracket:
- Tax Savings: If your annual income is Rs. 15 lakh or more, you can save up to Rs. 45,000 annually in taxes. Over the 11 years, this can add up to Rs. 4.95 lakh in tax savings, making your total benefit from the scheme almost Rs. 68.22 lakh.
Maximizing Returns with Tax Benefits
Depending on your income bracket, the tax savings on Sukanya Samriddhi Yojana can greatly boost your returns:
- Annual Income between Rs. 3 lakh to Rs. 6 lakh: You can save Rs. 7,500 annually, adding up to Rs. 82,500 in tax savings over 11 years.
- Annual Income between Rs. 6 lakh to Rs. 9 lakh: The tax savings amount to Rs. 15,000 annually, or Rs. 1.65 lakh over the investment period.
- Annual Income between Rs. 9 lakh to Rs. 12 lakh: You can save Rs. 22,500 annually, accumulating Rs. 2.47 lakh in tax benefits over 11 years.
- Annual Income between Rs. 12 lakh to Rs. 15 lakh: Your savings will be Rs. 30,000 annually, or Rs. 3.3 lakh over the term of the investment.
- Annual Income above Rs. 15 lakh: You can save Rs. 45,000 annually, reaching a total tax benefit of Rs. 4.95 lakh.
How to Reach the Rs. 80 Lakh Target
When your daughter turns 21, the maturity amount from Sukanya Samriddhi Yojana will be around Rs. 63.27 lakh, including both the principal and interest. Adding the tax benefits of Rs. 4.95 lakh for those in the highest tax bracket, the total amount your daughter will receive upon maturity can exceed Rs. 68 lakh.
However, for those who carefully manage their investments and opt for additional tax-saving measures, the effective total can easily reach Rs. 80 lakh, ensuring a secure and prosperous future for your daughter.
Why Choose Sukanya Samriddhi Yojana?
- Guaranteed Returns: SSY is a government-backed scheme, ensuring that your investment is safe and secure.
- High Interest Rate: With an interest rate of 8.2%, SSY offers higher returns than most fixed deposits and savings accounts.
- Tax-Free Income: The entire income from the scheme, including interest, is tax-free.
- Financial Security for Your Daughter: Whether for higher education or marriage, the maturity amount can be a significant financial asset for your daughter.
Sukanya Samriddhi Yojana is not just a savings plan but a comprehensive financial tool to ensure a bright future for your daughter. By starting early and making disciplined investments, parents can accumulate a sizable corpus by the time their daughter reaches adulthood. With the added benefit of tax savings, this scheme becomes an even more attractive option for families across India.
