Sukanya Samriddhi Yojana (SSY) is a small financial savings scheme accessible to the mother and father of a woman youngster beneath 10 years of age. “Amongst all of the small financial savings schemes, SSY enjoys exempt-exempt-exempt (EEE) tax break and affords the best rate of interest of seven.6% which has constantly remained so,” stated Amit Suri, a Delhi-based monetary planner.
How the scheme works
A mum or dad or authorized guardian of a woman youngster can open an account within the youngster’s identify earlier than she turns 10 years. A most of two accounts are allowed to be opened in a household for 2 woman kids.
The entire funding allowed in a monetary yr is ₹1.5 lakh, which can also be the mixed restrict within the case of two accounts in the identical household.
The minimal annual funding required to maintain the account lively is ₹250, failing which ₹50 penalty per default yr ought to be paid to regularize the account. If not regularised, the accessible steadiness within the account will proceed to earn curiosity until maturity. An SSY account comes with a tenure of 21 years, out of which deposits are allowed for the primary 15 years. As an illustration, if an account is opened for a 5-year-old woman, deposits may be made until she turns 20 and the account will mature by the point she is 26 years outdated. Untimely withdrawal of as much as 50% of the entire steadiness is allowed underneath particular circumstances of upper schooling, on producing proof of admission, or marriage after the account holder turns 18 years outdated. The mum or dad/guardian can apply for untimely closure underneath three circumstances – the woman youngster’s demise, her marriage after she turns 18, and the depositor’s monetary lack of ability to proceed making contributions.
The rate of interest on SSY is reviewed each quarter by the federal government. The present fee of seven.6% was final revised for April-June 2020 quarter and has remained unchanged since. The curiosity is calculated on the bottom steadiness within the account between the fifth and final date of the month. Because of this, it’s suggested that the deposits are made by the fourth of every month, and those that make a one-time annual contribution ought to accomplish that by 4 April to maximise returns on their contribution.
Tax guidelines
Deposits made to SSY may be claimed as deduction underneath the part 80C restrict of ₹1.5 lakh. The annual curiosity accrued and the quantity withdrawn on maturity are additionally exempt from tax.
Supply: Live Mint