The Sukanya Samriddhi Yojana (SSY) has become a popular savings scheme in India, especially among families with female children, since its introduction as part of the Beti Bachao Beti Padhao initiative by Prime Minister Narendra Modi. This scheme encourages long-term savings for the girl child and provides numerous tax benefits. In this article, we will delve into the details of SSY and provide insights into how much you need to invest monthly to accumulate Rs 50 lakh at maturity.
Understanding Sukanya Samriddhi Yojana (SSY)
SSY is a government-backed savings scheme designed to secure the financial future of female children in India. Here are some key points to consider:
- Minimum and Maximum Deposit: You can open an SSY account with a minimum deposit of Rs 250 and a maximum deposit of Rs 1.5 lakh per year.
- Deposit Duration: Making deposits for 15 years from the account opening date is mandatory. Failure to do so will result in the account going into ‘Account under default.’ However, you can reactivate the account by paying a fine of Rs 50 per year for the defaulted period, and reactivation is possible until 15 years from the account opening.
- Maturity and Interest: After 15 years, you need not make any more deposits. The account matures 21 years from the date of opening. During this time, your money continues to earn interest.
How to Accumulate Rs 50 Lakh at Maturity?
Let’s assume that you are opening an SSY account for a 5-year-old girl child, and you want to accumulate Rs 50 lakh at maturity in the year 2044 with an assumed interest rate of 8%. Here’s how you can achieve this goal:
According to SSY rules, a yearly deposit of Rs. 1,11,400 will yield just over Rs 50 lakh at maturity with an 8% interest rate. To achieve this, you must save Rs 9,283 every month or Rs 305 every day.
Triple Tax Benefits
Apart from the goal of securing your child’s financial future, SSY also offers triple tax benefits:
A. Deduction under Section 80C: The deposits made in SSY, up to Rs 1.5 lakh annually, are eligible for a deduction under Section 80C of the Income Tax Act.
B. Tax-Free Interest: The interest earned on the deposit is tax-free and compounded annually.
C. Tax-Free Maturity Amount: The amount received upon maturity is tax-free, providing a significant advantage over other investment options.
SSY allows premature withdrawal under specific circumstances, including financial hardship due to medical issues or the passing of a guardian. Additionally, you can close the account early if the beneficiary gets married after turning 18.
How the SSY Calculator Works
To determine the approximate maturity value based on your investments, you can use the SSY calculator. It assumes that you make yearly deposits for the first 15 years and then accrue interest for the next 6 years until maturity. The calculator is a handy tool to help you plan your investments and ensure a secure financial future for your girl child.
Sukanya Samriddhi Yojana is a powerful tool for securing the financial future of your female child, but also offers valuable tax benefits. By investing consistently and taking advantage of the scheme’s features, you can aim to accumulate Rs 50 lakh or more at maturity, ensuring a bright future for your loved ones. Start planning today to reap the maximum benefits of SSY.