Sukanya Samriddhi Yojana (SSY)

Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme designed to encourage parents to save for their daughter's future education and marriage expenses. This scheme was launched by the government of India in January 2015 under the 'Beti Bachao, Beti Padhao' campaign.

Under this scheme, parents or legal guardians can open an account in the name of their daughter(s) who is/are below the age of 10 years. The scheme provides attractive interest rates and tax benefits to encourage parents to save for their daughter's future.

Here's everything you need to know about the Sukanya Samriddhi Yojana:

Eligibility criteria:

• The account can be opened only for a girl child.
• The girl child should be below the age of 10 years at the time of opening the account.
• The account can be opened only by the parent or legal guardian of the girl child.

Account opening: The account can be opened at any post office or authorized banks across India. The parent or legal guardian needs to provide the following documents at the time of account opening:

• Birth certificate of the girl child
• Identity proof and address proof of the parent/guardian
• Passport size photograph of the girl child and the parent/guardian

The minimum initial deposit for opening the account is Rs. 250. The account can be opened with a maximum amount of Rs. 1.5 lakh per financial year.

Interest rate: The current interest rate for SSY is 7.6% per annum, which is compounded annually. The interest rate is subject to revision every quarter by the government.

Deposit frequency and amount: The account holder can deposit any amount in multiples of Rs. 100, subject to a maximum limit of Rs. 1.5 lakh per financial year. The deposits can be made in a lump sum or in installments.

Withdrawal: The account can be closed only when the girl child reaches the age of 21 years. The account holder can withdraw up to 50% of the balance in the account after the girl child attains the age of 18 years for the purpose of higher education or marriage. However, the withdrawal amount cannot exceed the actual education or marriage expenses.

Tax benefits: The contributions made to the SSY account are eligible for tax deductions under section 80C of the Income Tax Act, up to a maximum of Rs. 1.5 lakh per financial year. The interest earned and the maturity amount are tax-free.

Transfer of account: The SSY account can be transferred from one post office or bank to another, anywhere in India.

Benefits of SSY:

• The scheme encourages parents to save for their daughter's future education and marriage expenses.
• The scheme provides an attractive interest rate, which is higher than that offered by most other saving schemes.
• The scheme offers tax benefits, which can help in reducing the tax liability of the account holder.
• The scheme has a long tenure, which provides ample time for the investments to grow.
• The scheme is easy to open and operate.

Limitations of SSY:

• The account can be opened only for a girl child, which limits the scope of the scheme.
• The maximum deposit limit of Rs. 1.5 lakh per financial year may not be sufficient for some families.
• The account can be closed only when the girl child reaches the age of 21 years, which limits the liquidity of the scheme.

In conclusion, the Sukanya Samriddhi Yojana is a great savings scheme for parents who want to secure their daughter's future education and marriage expenses. The scheme provides an attractive interest rate, tax benefits, and a long tenure, which makes it a suitable investment option for parents. However,