Launched by the Government of India, the Sukanya Samriddhi Yojana (SSY) is a ground-breaking initiative aimed at securing the financial future of the girl child. Part of the ‘Beti Bachao, Beti Padhao’ campaign, the scheme targets the financial empowerment of girls by encouraging parents to save for their future. The SSY not only offers significant returns but also provides tax benefits.
How Sukanya Yojana Works
Eligibility Criteria:
The Sukanya Yojana is open to the girl child under 10 years of age. Parents or legal guardians can open an account in the name of the girl child.
Account Operation:
Only one SSY account is allowed per girl child, and a family (or legal guardian) can open a maximum of two SSY accounts. In the case of twins or triplets, more accounts can be permitted.
Deposit Rules:
The SSY account can be opened with a minimum deposit of ₹250 and a maximum of ₹1.5 lakh per financial year. Deposits can be made in lump sum or in installments, with no limit on the number of deposits.
Maturity Period:
The scheme matures when the girl child turns 21 years old, regardless of the duration the account has been held. However, deposits must be made for 15 years from the date of opening the account. After 15 years, the account will continue to earn interest until maturity.
Interest Rates:
The interest rate for SSY is revised quarterly by the Government of India. As of Q3 FY2023-24, the interest rate stands at 7.6% per annum, compounded annually.
Financial Benefits of Sukanya Yojana
Tax Benefits:
Contributions made to the SSY are eligible for tax deductions under Section 80C of the Income Tax Act, up to ₹1.5 lakh per annum. The interest earned is also tax-free and the proceeds received upon maturity are exempt from tax.
Safe Investment:
Being a government-backed scheme, the SSY is a safe and low-risk investment option compared to other financial products available in the market. Consequently, it is an attractive option for risk-averse investors.
Interest Compounding:
The power of compounding at an annual rate of 7.6% can dramatically enhance the maturity value. For instance, if an amount of ₹10,000 is deposited annually, the corpus at the end of 21 years would be approximately ₹5,46,692.
Benefits: Government Girl Child Schemes in India
The broader context of the Sukanya Yojana includes various government schemes aimed at the empowerment of the girl child. Such initiatives include:
1. Beti Bachao, Beti Padhao:
Aimed at promoting the survival, protection, and education of girl children. The program seeks to address the declining child sex ratio and empower girls.
2. CBSE Udaan:
Designed to help girl students prepare for engineering entrance exams, it provides free online resources, study materials, and mentorship.
3. Ladli Scheme:
This scheme provides financial assistance to girl children in Haryana. It is aimed at improving the status of the girl child and preventing practices like female foeticide.
4. Balika Samridhi Yojana:
Aims at providing education and financial benefits to girl children. Under this scheme, girls receive annual scholarships for school education, which helps in reducing the financial burden on families.
Conclusion
Though SSY is an attractive scheme, potential investors must weigh all aspects, including interest rates, inflation, and liquidity needs, before investing. Consulting financial advisors for personalized advice is often a prudent approach.
Summary
The Sukanya Samriddhi Yojana (SSY) is an instrumental and government-backed saving scheme designed specifically for the girl child in India. It seeks to ensure a secure financial future by offering robust returns and attractive tax benefits. The account can be opened by parents or legal guardians for a girl child below ten years of age. Contributions ranging from ₹250 to ₹1.5 lakh per year earn a compelling interest rate of 7.6%, which is compounded annually. Maturing when the girl child turns 21, the scheme facilitates financial planning for education and marriage without the tax burdens typically associated with other investment products. Complementing SSY, various government girl child schemes in India like Beti Bachao, Beti Padhao and CBSE Udaan aim to bolster the overall objective of female empowerment in India. However, it is imperative for investors to carefully investigate the benefits and limitations before engaging in this or any other financial investment.
Disclaimer
The content provided here is for informational purposes only and should not be perceived as financial advice. Investors are advised to evaluate all the pros and cons involved in trading and investing within the Indian financial market before making any financial commitments.