Sukanya Samriddhi Yojana (SSY) is a government-initiated small savings scheme aimed at supporting the ‘Beti Bachao, Beti Padhao’ campaign.
Its primary objective is to encourage financial investment for the welfare of the girl child, including expenses related to education and marriage.
Currently, the scheme offers an annual compound interest rate of 8 percent.
Here are some important considerations to keep in mind before investing in this scheme:
Lock-in Period and Withdrawal Limitations
The Sukanya Samriddhi Account has a lock-in period of 21 years, meaning you cannot withdraw funds before the account matures.
Premature withdrawals are only permitted in the event of untimely death or under specific circumstances. It is important to be aware of this restriction to avoid any inconvenience or financial loss.
Limited Deposit Flexibility
When it comes to investment flexibility, the scheme has certain limitations. The minimum annual deposit is set at Rs 250, and the maximum amount that can be invested in a financial year is Rs 1.5 lakh.
Parents are required to contribute at least Rs 250 every year for 15 years from the date of opening the account. It is crucial to plan your investments accordingly to meet these obligations.
Returns and Gender-Specific Nature
While Sukanya Samriddhi Yojana offers a relatively higher interest rate compared to standard savings accounts, it may provide lower returns compared to other investment options such as mutual funds, stocks, and bonds.
It is essential to evaluate your investment goals and risk appetite before deciding on this scheme.
Additionally, it’s important to note that this scheme is exclusively designed for the benefit of the girl child,
and investments cannot be made for male children or other family members.
Tax Benefits and Penalty for Premature Withdrawal
Investing in the Sukanya Samriddhi Account offers tax benefits. However, if you choose to withdraw funds before the account matures, you may incur penalties and lose the tax benefits associated with the scheme.
It is advisable to carefully assess your financial needs and consider the long-term nature of this investment to maximize the benefits.
