Even though the duration of SSY is 21 years, one has to deposit money only for the initial 15 years in the SSY scheme.
SSY Calculator: Sukanya Samriddhi Yojana is Taxable or Not: Sukanya Samriddhi Account or the Sukanya Samriddhi Yojana (SSY) is an investment scheme aimed at saving for the financial goals of the girl child. And, if you are considering whether Sukanya Samriddhi Yojana is good or not, read on to know the benefits and the features of the SSY scheme.
What makes it the first choice for most parents is the safety of the investment as it comes with a government guarantee. On top of it, there are tax benefits galore in the SSY scheme. The account may be opened with a minimum initial deposit of Rs 250 and in multiples of Rs 50 thereafter. To keep the SSY account active, one needs to make a minimum deposit of Rs 250 each year. The total amount deposited in an account should not exceed Rs 1.5 lakh.
One can open the SSA account in the name of a girl child only. And, within a family, only two such accounts are allowed to be opened. The important thing to make sure is that the age of the child has to be below 10 years. The SSY account can be opened in any post office or select designated branches.
The SSY is a 21 years scheme and one has to deposit regularly into it. So if the age of the child is 4 years, the maturity of the account will happen when the child attains the age of 25. The scheme, however, allows withdrawal of the funds after age 18 on account of the marriage.
Even though the duration is 21 years, one has to deposit money only for the initial 15 years in the SSY scheme. After that, till maturity, no more payments are to be made, but the account will continue.
After age 18, the girl child is allowed to make deposits into the SSY account on her own even while the parents can also make deposits.
The SSY rules allow exit from the scheme after 5years but only if there is a medical emergency. The scheme allows withdrawals of funds up to 50 per cent of the balance on account of a child’s education after age 18.
The SSA enjoys E-E-E tax benefits. It means, the contributions get tax benefit under section 80C while the interest earned remains tax-exempt and even the maturity amount is tax-free.
Once one opens the SSY account, the interest rate will not remain fixed for the entire period of 21 years. The government declares the rate of interest for every quarter of the financial year. Hence, the rate of interest of SSA may vary during the year and till maturity. Currently, the interest rate of SSY is 7.6 per cent per annum compounded annually.
Sukanya Samriddhi Yojana calculator
As the interest rate will vary, arriving at the maturity amount using a Sukanya Samriddhi Yojana will not give correct figures. However, assuming a return of 7.6 per cent on depositing Rs 1.5 lakh for 15 years, the maturity amount after 21 years will be approximately Rs 66 lakh.
What should an investor do
Even though the rate of interest keeps varying, SSY carries high effective interest rate taking tax benefits into account. Moreover, it is a fixed-income debt asset that will help accumulate funds for child needs over the long term. However, make sure you also save through equity mutual funds for the long term goals to create a sizeable corpus.