Sukanya Samriddhi Yojana is a government-backed savings scheme in India that aims to promote the welfare and education of girl children.
Launched in 2015 as part of the Beti Bachao, Beti Padhao campaign, this scheme offers attractive interest rates and tax benefits to encourage parents and guardians to save for the future of their daughters.The scheme is designed to provide financial security for a girl child’s education and marriage expenses.
It offers a higher interest rate compared to other savings schemes, making it an attractive investment option for parents and grandparents.
By investing in Sukanya Samriddhi Yojana, grandparents can play a crucial role in securing the future of their granddaughters.
Eligibility criteria for Sukanya Samriddhi Yojana
To open an account under Sukanya Samriddhi Yojana, the girl child must be below the age of 10 years.
The account can be opened by her parents or legal guardians.
However, only one account is allowed per girl child, and a maximum of two accounts are allowed per family, irrespective of the number of daughters.To open an account, the following documents are required:1.
Birth certificate of the girl child2.
Identity proof and address proof of the parent or guardian3.
Passport-sized photographs of the girl child and parent or guardian
Understanding the benefits of Sukanya Samriddhi Yojana
One of the key benefits of Sukanya Samriddhi Yojana is the high interest rates offered on the deposits.
As of 2021, the scheme offers an interest rate of 7.6{59d73bdc323906e569062c973cd021b7cfcbe5d3917386ec97a692722ae88f07} per annum, which is higher than most other savings schemes in India.
This ensures that the investment grows significantly over time, providing a substantial corpus for the girl child’s future needs.Another major advantage of Sukanya Samriddhi Yojana is the tax benefits it offers.
The contributions made to the scheme are eligible for a deduction under Section 80C of the Income Tax Act, up to a maximum limit of Rs.
1.5 lakh per financial year.
Additionally, the interest earned and the maturity amount are tax-free, making it a highly tax-efficient investment option.By investing in Sukanya Samriddhi Yojana, grandparents can contribute towards the long-term savings for their granddaughters’ education and marriage expenses.
The scheme has a lock-in period of 21 years from the date of opening the account, ensuring that the funds are not easily accessible and can grow over time.
This provides a secure financial future for the girl child and reduces the burden on parents or guardians.
Can grandparents invest in Sukanya Samriddhi Yojana?
Yes, grandparents are eligible to invest in Sukanya Samriddhi Yojana for their granddaughters.
As long as they meet the age criteria for opening an account, they can contribute towards securing the future of their grandchild.
How to open a Sukanya Samriddhi Yojana account for a grandchild
Opening a Sukanya Samriddhi Yojana account for a grandchild is a simple process.
Here is a step-by-step guide:1.
Visit the nearest post office or authorized bank branch that offers Sukanya Samriddhi Yojana accounts.2.
Fill out the account opening form with all the necessary details.3.
Submit the required documents, including the birth certificate of the girl child, identity proof and address proof of the grandparent, and passport-sized photographs.4.
Make an initial deposit of at least Rs.
250 to activate the account.5.
Once the account is opened, regular contributions can be made through cash, cheque, or online transfer.
Tax benefits of investing in Sukanya Samriddhi Yojana
Investing in Sukanya Samriddhi Yojana offers several tax benefits for grandparents.
The principal amount invested in the scheme is eligible for a deduction under Section 80C of the Income Tax Act, up to a maximum limit of Rs.
1.5 lakh per financial year.
This reduces the taxable income and helps in saving taxes.Furthermore, the interest earned and the maturity amount are completely tax-free.
This means that grandparents do not have to pay any tax on the returns generated by the scheme.
This makes Sukanya Samriddhi Yojana a highly attractive investment option from a tax perspective.When compared to other tax-saving investment options, Sukanya Samriddhi Yojana stands out due to its higher interest rates and tax benefits.
It offers a better return on investment compared to traditional options like fixed deposits, while also providing the added advantage of tax exemption.
Sukanya Samriddhi Yojana vs.
other investment options for grandparents
While Sukanya Samriddhi Yojana offers several advantages, it is important to compare it with other investment options before making a decision.
Some of the popular investment options for grandparents include fixed deposits, mutual funds, and gold.When compared to fixed deposits, Sukanya Samriddhi Yojana offers a higher interest rate and tax benefits.
Fixed deposits are subject to taxation, whereas the interest earned and the maturity amount in Sukanya Samriddhi Yojana are completely tax-free.Mutual funds offer the potential for higher returns compared to Sukanya Samriddhi Yojana, but they also come with higher risks.
Additionally, mutual funds do not offer any specific benefits for girl children’s education or marriage expenses.Gold is often considered a safe investment option, but it does not provide any regular income or interest.
Sukanya Samriddhi Yojana, on the other hand, offers a fixed interest rate that helps in growing the investment over time.
Tips for investing in Sukanya Samriddhi Yojana as a grandparent
Before investing in Sukanya Samriddhi Yojana, grandparents should consider the following factors:1.
Financial goals: Determine the amount of money you want to invest and the purpose of the investment, whether it is for education or marriage expenses.2.
Risk tolerance: Assess your risk tolerance and choose an investment option accordingly.
Sukanya Samriddhi Yojana is a low-risk investment option, making it suitable for conservative investors.3.
Investment horizon: Consider the time period for which you want to invest.
Sukanya Samriddhi Yojana has a long lock-in period of 21 years, so it is important to have a long-term investment horizon.To maximize returns on investment, grandparents can make regular contributions towards the scheme.
This ensures that the investment grows steadily over time and provides a substantial corpus for the girl child’s future needs.
Withdrawal rules for Sukanya Samriddhi Yojana
Sukanya Samriddhi Yojana has specific rules regarding partial and complete withdrawals.
Partial withdrawals are allowed once the girl child reaches the age of 18 years, provided that she has passed the 10th standard examination or equivalent.The maximum amount that can be withdrawn is 50{59d73bdc323906e569062c973cd021b7cfcbe5d3917386ec97a692722ae88f07} of the balance at the end of the preceding financial year.
The withdrawal can only be made for higher education expenses or for meeting the expenses of marriage after attaining the age of 18 years.Premature withdrawal is allowed in case of the unfortunate demise of the girl child or in exceptional circumstances such as critical illness.
However, premature withdrawals are subject to certain penalties and conditions.
Conclusion: The importance of investing in Sukanya Samriddhi Yojana for grandparents
Investing in Sukanya Samriddhi Yojana is a great way for grandparents to secure the future of their granddaughters.
The scheme offers high interest rates, tax benefits, and long-term savings for a girl child’s education and marriage expenses.By investing in Sukanya Samriddhi Yojana, grandparents can contribute towards the financial well-being of their grandchild and ensure that she has the necessary funds for her future needs.
It is a responsible and thoughtful investment option that can make a significant difference in the life of a girl child.
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