Sukanya Samriddhi Yojana: safe, tax-free — but is the lock-in too long?
Subscribe to enjoy similar stories.You are blessed with a baby girl and want to begin investing in her name. For many parents, the first option that comes to mind is the Sukanya Samriddhi Yojana (SSY).Backed by the government and offering fixed returns with tax benefits, the scheme has become one of the most popular long-term investment options for daughters.However, while the returns may look attractive, there are important restrictions around lock-in and liquidity that parents often overlook before investing.The current interest rate on SSY is 8.2%.
The government reviews and resets it every quarter in line with other small savings schemes and the prevailing interest rate cycle.You can invest a minimum of ₹250 and a maximum of ₹1.5 lakh in a financial year. The account can be opened any time before the girl child turns 10 years old.Premature closure before maturity is permitted only under specific circumstances, such as the daughter’s marriage after she turns 18.
Proof of age is mandatory in such cases.Contributions to SSY qualify for deduction under Section 80C of the Income Tax Act in the old tax regime. While the new tax regime does not offer this deduction, the interest earned and maturity amount remain tax-free under both regimes.“One lesser-known feature of SSY is that the account cannot be attached for the liabilities of the parents.
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