Finance

Published: May 23, 2023
Updated: May 23, 2023

"Secure Your Child's Future with Sukanya Samriddhi Yojana: A Risk-Free Investment"

Planning for your child's future is essential, and Sukanya Samriddhi Yojana (SSY) provides a government-backed small savings scheme in India to help parents save for their girl child's long-term financial needs. With attractive interest rates and tax benefits, this risk-free investment option ensures a secure future for your child. This article explores the key features of SSY, calculates potential returns, and highlights its income tax benefits.

SSY: A Safe Investment for Your Girl Child:

Sukanya Samriddhi Yojana allows parents to invest in a risk-free scheme until their girl child turns 14 years old. Under this scheme, the Indian government offers a competitive interest rate of 8% per annum, paid quarterly. Recently, the government raised the interest rate from 7.6% to 8% for the April to June 2023 quarter, providing an attractive proposition for SSY account holders.

Understanding the Investment Period:

By investing in SSY immediately after the birth of your girl child, you can contribute to the scheme for a maximum of 15 years. This means you can invest up to ₹1.20 lakh per annum in 12 equal installments, taking advantage of the income tax benefits available under Section 80C of the Income Tax Act.

Calculating Potential Returns:

Using an SSY calculator, if you choose not to withdraw 50% of the maturity amount when your girl child turns 18 years old, the maturity amount at age 21 would be approximately ₹51,03,707 or around ₹51 lakh. This amount includes a total investment of ₹18 lakh and the interest earned over the 21-year maturity period, amounting to around ₹33,03,707 or ₹33 lakh.

Income Tax Benefits:

One of the significant advantages of SSY is its income tax benefits. Investors can claim tax deductions of up to ₹1.50 lakh invested in an SSY account under Section 80C. Additionally, the interest earned and maturity amount from SSY are fully tax-exempt. This makes Sukanya Samriddhi Yojana an EEE (Exempt, Exempt, Exempt) investment instrument.

Sukanya Samriddhi Yojana offers parents a reliable and secure investment option to plan for their girl child's future financial needs. With the recent increase in interest rates and tax benefits, SSY presents an attractive opportunity for long-term savings. By starting early and investing consistently, you can potentially secure a significant maturity amount, ensuring a prosperous future for your child. Consider exploring Sukanya Samriddhi Yojana as a prudent investment choice to safeguard your child's financial well-being.