Sukanya Samriddhi Yojana (SSY) was designed, keeping in mind the financial needs of a girl child. Accounts under this scheme can be opened either in a financial institution or post office to save for the education and marriage of the child. Families can invest in this scheme as it comes with exempt-exempt-exempt (EEE) status.
Benefits of SSY
Sukanya Samriddhi Yojana has the underlying objectives of mitigating gender discrimination among children. It focuses on welfare and protection of girls along with ensuring greater participation in education, thereby improving employability.
- Beneficiary of the SSY account can only be a girl child who is an Indian resident.
- Parents or legal guardians can open the account.
- It can be opened only for a girl child aged 10 years or below.
- Maximum number of accounts is restricted to two per family, with an upper limit of one account per child. Exceptions are available in case of twins.
- Only the girl child can operate the account after attaining 18 years.
- Minimum deposit for this scheme is Rs.250 and the maximum Rs.1.5 lakh. Account-holders have to deposit the minimum amount to keep the account active.
- Tenor of the account is 21 years from the account opening date. Hence, SSY is one of the long-term investment ideas that promise the best profits.
Withdrawal from Sukanya Samriddhi account is restricted. The only exception is for higher education purposes with the girl completing 10th standard or attaining 18 years. It is also capped at a maximum of 50%.
Premature closure is not permitted except in the following circumstances –
- Intended marriage on girl attaining 18 years – Age proof documents must be provided, and the application can be submitted 1 month before the wedding or 3 months after it.
- Change in residential status of the girl child – If she becomes a non-resident Indian or no longer remains a citizen, the account will be deemed to be closed. However, such change must be communicated within 1 month.
- Account-holder’s demise – On production of the death certificate, Sukanya Samriddhi account will stand closed, and the balance will be paid to parents or guardian.
These rules ensure that the accumulated fund is used only in the interest of the girl child, and she eventually benefits from it in future.
Calculating maturity value
To calculate the maturity value of the Sukanya Samriddhi account, investors can use a calculator available online.
The calculator will show the maturity year for a specific SSY account, and also the amount to be received on maturity. It will enable the investor in effective planning of the investment portfolio.
Sukanya Yojana calculator uses the formula mentioned below to arrive at the result –
A = P (1 + r/n) ^ nt
- A = Compound interest,
- P = Principal amount,
- r = Rate of interest,
- n = Number of times the interest compounds within a year,
- t = Number of years.
The method to use Sukanya Samriddhi calculator follows –
- Put the age of girl child;
- Use the rate of interest for the tenor (current interest rate is at 8.40%);
- Mention the contribution towards the investment. To make the process simpler, the same amount may be put across the years
The SSY calculator will show the amount of money to be received on maturity of Sukanya Samriddhi account based on the above inputs.
Sukanya Samriddhi Yojana is also considered as one of the best investment options in India due to the high rate of interest offered.
Owing to the prolonged tenor and liquidity restrictions, an investor also has the option of investing in other plans, like fixed deposits. NBFCs like Bajaj Finance offer an interest rate up to 8.10% on its Fixed Deposits. Investors can use a fixed deposit interest calculator to assess the returns after maturity.
Sukanya Samriddhi Yojana is beneficial in meeting the financial needs of a girl child’s future. Additionally, the income tax benefits available make it all the more lucrative both for the account-holder and the contributor.
Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at HighlightStory