2016 – Invest in Sukanya Samriddhi Yojana – Tax Free, Zero Risk

Since it’s launch last year January 2015, Sukanya Samriddhi Yojana has become a favorite investment product for a risk averse individuals and is also recommended by financial planners. Another main reasons why parents are investing in this are because of the following benefits:

  1. Zero risk. In fact it is the safest investment product.
  2. Much better returns since interest rate offered is high although the rates would be revised every year. For the financial year 2015-2016, the interest rate offered was 9.2%. So Rs. 50,000 invested every year will fetch Rs. 2,668,821 upon maturity. Check out detailed chart showing investment for different amount along with the returns. FYI – In the first year of launch i.e. 2014-2015, the interest rate offered was 9.1%.
  3. Flexible deposits can be made ranging from minimum Rs.1000 to Rs. 1,50,000.
  4. Your girl’s future will be secured and the maturity amount can be used for education, marriage.
  5. Tax benefit is availed under the section 80C. Investment and interest earned is 100% tax-free.
  6. Accounts can be transferred from one bank to another and one post office to the other.

However there are few cons as follows:

  1. Lock-in period is high and you have to stay invested until girl reaches the age of 21 years.
  2. Premature withdrawal is possible but only when girl reaches the age of 18 years.
  3. Premature closure is not possible
  4. Penalty amount is charged if in any financial year minimum deposit is not made. The amount is Rs. 50 only. Upon paying this, account will get re-open again.

However the benefits outweigh the cons. SSY is also considered more attractive than PPF. Check out in detail the difference between PPF and SSY difference.

Here are the statistics of the growth of SSY account holders:

So if you have not opened Sukanya Samriddhi Account in the last year then open it this year and secure the future of your girl child. And since tax paying season is nearing, it is the golden chance to become smart by investing in SSY as the scheme is a big relief to the tax payer. You just need to assess how much you investment is required for tax saving. But remember not to do haphazard investing which will impact your financial goals.

Few of the tax saving investment options apart from SSY are:

  1. Equity linked savings scheme
  2. Public provident fund
  3. Life insurance premium
  4. Employee provident fund
  5. Expenses such as education loan, tuition fee are also exempted from tax


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