Your child’s future is your number one priority as a parent. And that’s why you sacrifice so much to give them everything they need—and more. In order to give their children a better life, the parents work hard. Having a good financial cushion is very important for your child’s future. This is particularly true for parents of a girl child as they will have to bear several expenses such as higher education, marriage, and any other unforeseen emergencies/expenses.
To help families build long-term savings for a girl child’s education and marriage expenses, the Sukanya Samriddhi Yojana was launched in 2015 by our Honourable Prime Minister Narendra Modi. The scheme allows only a parent or guardian to open an account for a girl child under ten years old and is part of the ‘Beti Bachao, Beti Padhao’ campaign. It allows parents or guardians to open a Sukanya Samriddhi Yojana (SSY) account for their female child to build a corpus for her education and marriage.
What is Sukanya Samriddhi Yojana?
Sukanya Samriddhi Yojana (SSY), launched in 2015 by the Indian government, is a savings scheme. The goal of SSY is to help parents save money for their daughters’ futures and equalize the gender gap in India by providing financial security for young women. It allows parents to build a corpus for their daughter’s future needs such as education, wedding, etc. There is a minimum and a maximum deposit amount of INR 250 and INR 1,50,000/- per annum.
If you want to open your account under SSY Scheme, then you can do so by visiting either of the following.
- a) Banks
- b) Post offices
Key Features of Sukanya Samriddhi Yojana (SSY)
Sukanya Samriddhi Yojana was introduced to assist parents of girl children in building a fund for their daughters to help with educational and marriage goals. Before opening an account, be sure to take a look at a few of the features. They include:
|Operation of the account||● The guardian or parents can operate the account until the girl reaches the age of 10.
● After turning 18, the girl is entitled to operate the account.
|Deposits made towards the account||The maximum deposit that can be placed in an account in a financial year is Rs.1.5 lakh, and the minimum is Rs. 250.You can make deposits in multiples of 100.|
|Scheme Duration||The deposit should be for 15 years towards the scheme. The scheme matures after 21 years.|
|Account Transfer||The deposit should be for 15 years towards the scheme. The scheme matures after 21 years.
Post offices can transfer SSY accounts to banks, and banks can transfer SSY accounts to post offices. Transfers are free of charge. However, proof of residency change is required. If no proof is provided, a fee of Rs.100 will be charged.
|Mode of deposits||A deposit toward this account may be made by bank transfer, demand draft, cheque, or cash.|
Benefits of the Sukanya Samriddhi Yojna (SSY) account
The Sukanya Samriddhi Yojana, a girl-child insurance scheme, is one of the best ways to build up an adequate corpus for your child’s education.
With this scheme, you only need to invest a small portion of your savings in the account and reap significant benefits in the long run. Investing in this child education plan can help families have enough money to pay for the education of their daughters. Take a look at how this girl-child insurance plan helps girls achieve their dreams:
Sukanya Samriddhi Account is the most popular scheme to save money for your daughter’s education and marriage. It offers a higher rate of interest than other Savings Plans that offer financial security for the girl child. Each year, the government declares the applicable interest rate for that year, while the interest on your investments is compounded yearly. Due to compounding, the value of your Sukanya Samriddhi Yojana account will increase many-fold by maturity. The government is constantly bringing positive changes in the overall scheme to make sure that families have enough money to pay for their daughter’s education and marriage expenses, thus helping decrease female foeticide cases in India.
Amounts invested in the Sukanya Samriddhi Yojna are exempt from EEE taxes. Under section 80C of the Income Tax Act, the money invested in this child education plan, as well as the maturity amount after interest, is allowed as an income tax deduction. The deduction is up to Rs 1,50,000. Your deposit account’s compound interest is also tax-free. The same applies to withdrawals. As a result, when you mature your account, you can withdraw the money without deduction. By taking advantage of these tax benefits, the account holder can effectively increase her savings and use it to cover future expenses of her child.
When the girl reaches 18 years of age, it is possible to withdraw half of the total amount from the account. The withdrawn funds can be used to support the girl child’s higher education, and the remaining funds can be used to pay for her wedding and other expenses.
The whole amount invested with the compound interest, which has accrued since the account was opened (or the girl’s marriage is the earliest date of maturity), is deposited into her bank account upon maturity, which is 21 years after the account was opened. Until the policyholder closes the account, the government will continue to pay interest on the account. In this way, the girl child will have financial freedom after she is married or after she reaches the age of 21, which will help her live a good and secure life.
SSY as a child education plan?
Higher education is becoming more expensive by the year. As a result, parents and guardians are looking for ways to save money on their child’s education. A good way to start saving money is by planning ahead.For example, if you’re planning on sending your child to college in five years, it’s important that you start saving now. However, if you’re planning on sending them there next year, it might not be as much of a priority right now.The cost and timing of expenses will differ based on what type of degree they’re pursuing (such as mechanical engineering or Olympic javelin thrower). This means that parents will have to invest in a child education plan that helps them bear these costs.
The Sukanya Samriddhi Yojana (SSY) is a child plan is specially designed for a girl child. Investing in this can aid your child education plan in India and can help families have enough money to pay for the education of their daughters.
Investing in the equity market or setting aside some of your savings can be one of the best ways for you to save for your child’s education. Sukanya Samriddhi Yojana can be a good investment in the long run, as you only have to invest a small percentage of your savings. With a high-interest rate, a family can certainly build an adequate corpus to offer a better future to their daughter.