Securing your child's education with Sukanya Samriddhi Yojana
The Sukanya Samriddhi Yojana is a government-backed savings scheme in India, aimed at encouraging parents to save for their daughter's education and marriage expenses. With attractive interest rates and tax benefits, it's an excellent way to secure your child's future. Understanding how to maximize the benefits of SSY can be a game-changer for your financial planning.
Start early for compound interest
Opening an SSY account at the birth of your daughter allows the investment more time to grow through compound interest. The scheme currently offers an interest rate of 7.6%, compounded annually. Starting early means by the time your daughter is 21, a significant amount of wealth would have been accumulated. This ensures ample funds for her higher education.
Maximize tax benefits
Investments made toward SSY are eligible for tax deductions under Section 80C of the Income Tax Act, up to ₹1.5 lakh per annum. This benefit not only reduces your taxable income but also enhances the effective return on investment in the scheme. It's advisable to maximize this limit each year to reap full tax benefits while growing your savings.
Regular contributions matter
To maintain an active status for the Sukanya Samriddhi Yojana account, a yearly deposit of at least ₹250 is essential, with the annual contribution ceiling set at ₹1.5 lakh. Opting for regular deposits, either on a monthly or quarterly basis, fosters a savings discipline. This approach ensures that you capitalize on the interest earnings by avoiding lapses in deposits.
Monitor and rebalance
Sukanya Samriddhi Yojana offers a fixed rate of return, updated quarterly by the government. Monitoring these changes is crucial for your child's education financial plan. If you have investments like mutual funds or stocks, rebalancing based on performance and risk might be necessary. Using Sukanya Samriddhi Yojana effectively eases the financial load of your daughter's higher education while offering tax benefits.
