Government’s Savings Schemes
The central government has introduced various deposit schemes, and one of the crucial ones is the Sukanya Samriddhi Yojana, aligning with the Beti Bachao Beti Padhao initiative.
How Sukanya Samriddhi Yojana Works
This scheme is specifically tailored to secure funds for a girl child’s education and marriage. Here’s how it works:
Step 1: Enrollment Requirements
Parents can enroll their daughters in this scheme when they are ten years old. To open an account, you need documents like ID, address proof, birth certificate, photographs of the child and her father, and Aadhaar card.
Step 2: Initial Deposit
A minimum of Rs. 250 is required to open an account, and you can deposit up to Rs. 1.50 lakh. Payments are made for 15 years from the date of account opening.
Step 3: Maturity Period
The account matures after 21 years, which includes a six-year period after the 15-year deposit term. During these six years, no additional deposits are required.
Account Management and Penalties
If payments are missed, the account goes into default. However, it can be reactivated by paying a fine of Rs. 50. Reactivation is possible within 15 years from the account opening date, offering flexibility to account holders.
Calculating Returns and Tax Benefits
For instance, if your child is currently 5 years old and the scheme offers an 8 percent interest rate, you need to contribute Rs. 55,700 annually. This calculation results in a total of Rs. 25 lakhs at maturity. It means a monthly contribution of Rs. 4,641 can help you secure Rs. 25 lakhs for your daughter’s marriage.
Moreover, this scheme provides tax benefits under Section 80C of the Income Tax Act. You can avail a tax exemption of up to Rs. 1.50 lakh, and the interest earned and the maturity amount are tax-free, making it a financially prudent choice for parents.