Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme designed to help parents build a financial corpus for their daughters. The scheme currently offers an interest rate of around 8.2%, which is higher than the interest generally associated with bank fixed deposits.
The government reviews the interest rates of small savings schemes every quarter. So far, no fresh rate announcement has been made. At the current rate, long-term investments combined with compound interest can help create a sizeable corpus by the time the account matures.
How ₹22.5 Lakh Investment Can Grow to Over ₹70 Lakh
Under SSY, parents can invest up to ₹1.5 lakh every year for 15 years. Investing the maximum amount is equivalent to putting aside ₹12,500 every month.
Over 15 years, the total amount deposited would be ₹22.5 lakh. With compound interest, this investment can grow to approximately ₹70 lakh to ₹72 lakh over the 21-year maturity period.
The resulting corpus can be used for major financial requirements related to a daughter’s future, including higher education and marriage.
Key Features of Sukanya Samriddhi Yojana
Sukanya Samriddhi Yojana is specifically meant for girl children. The minimum amount that can be deposited in the account is ₹250 per year, while the maximum annual contribution is ₹1.5 lakh.
Contributions are made for 15 years, whereas the account reaches maturity after 21 years. A partial withdrawal facility is available after the daughter turns 18, subject to the applicable scheme rules.
The scheme is backed by the government and is intended for parents looking to build long-term savings for their daughters.
SSY Tax Benefits and Current Interest Rate
Investments made in SSY are eligible for tax benefits under Section 80C. The interest earned and the maturity proceeds are also exempt from tax under the applicable provisions.
The interest rate on Sukanya Samriddhi Yojana was increased from 8% to 8.2% for the January-March quarter of 2024. According to the information provided, the rate has remained unchanged during the following 10 reviews.
If there is no change in the upcoming review, the 8.2% rate would continue for the 11th consecutive quarter.
Disclaimer: The calculations in this article are illustrative and based on the interest rate and scheme details provided at the time of publication. Actual returns may vary if the government changes the applicable interest rate or scheme rules. Investors should check the latest official SSY guidelines and tax provisions before making investment decisions.