Why should girl child parents invest in Sukanya Samriddhi Yojana?

[Kanika Shelatkar]

A few years ago, the Narendra Modi-led Indian Government and the Ministry of Finance launched the 'Beti Bachao Beti Padhao' initiative to educate and empower the girl child. Echoing this campaign, the Government launched a futuristic scheme helping the girl child receive proper education and financial independence. Introduced in 2015, the Sukanya Samriddhi Yojana has become popular owing to the benefits it offers.

If you have a daughter, here are some reasons to invest in SSY today:

Equal chance to life

For a long time now, the state of the girl child in India has been deplorable. Girls were considered a burden, and female infanticide was an issue that plagued the country for years. But for a society to be considered civilised and evolved, both men and women need to be given equal opportunities. This is precisely what Sukanya Samriddhi Scheme offers your girl child. It helps them build a quality life, with education as the weapon.

As a parent or the guardian, you can set aside some funds as savings monthly that then get used towards their studies.

Secures her financially

In India, most unmarried girls are financially dependent on their parents. Once married, they become dependent on their husbands, be it for big or small financial concerns. The objective of the Sukanya Samriddhi Yojana Scheme is to secure them financially. Your girl can have her Savings Account where she can deposit and withdraw funds. She then uses the sum to finance her higher studies and set up her business, thereby creating a niche for herself.

Savings yield higher interests

For encouraging parents and guardians to invest in the scheme, the Government provides higher interest rates on the savings in the Sukanya Samriddhi Account. Currently, the interest rates are competitive and higher than what you would receive on Fixed Deposits in a public or private sector bank. Also, the rates get revised each quarter by the Government.

Since the scheme launch, the interest rates have never dropped below 9%, irrespective of the country's economic conditions.

Gain tax benefits

The best reason for parents to invest in the SSY scheme is because parents offer higher tax benefits. For instance, you can invest as little as Rs. 500 annually, and the maximum amount deposited under this scheme is Rs. 1.5 lakh. According to Section 80C of the Income Tax Act, 1961, the depositor receives tax exemptions of Rs. 1.5 lakh for investing here.

Moreover, the scheme falls under the Exempt, Exempt, Exempt or EEE category, which means you get exemptions on the principal amount deposited, interest earned, and the maturity amount.