2024-03-14 15:03:17
New Delhi: Sukanya Samriddhi Yojana (SSY) is a tax-free small savings scheme for daughters. Parents of a daughter aged 10 years or less can open an SSY account in the name of the girl. The scheme is offering 8.2 percent interest for the January-March quarter. To avail the benefit of SSY, money will have to be deposited for 15 years from the date of account opening. It will mature after 21 years from the date of account opening or at the time of daughter’s marriage (at the age of 18 years). However, it is important to understand that the interest rate of 8.2 per cent is not fixed for the entire tenure.
How is interest calculated on Sukanya Samriddhi Yojana?
The interest rate of Sukanya Samriddhi Yojana is not fixed for the entire period. The central government changes the rates of small savings schemes every quarter. Therefore, the interest rate of SSY keeps changing as per the rates declared by the government every quarter. If the government increases the interest rate, the increased rate will be available in the account for that quarter. On the contrary, if the government reduces the interest rate then the account will get a lower rate for that particular quarter. The government changes the rates quarterly in line with the changing economic scenario and its economic objectives.
5th date is special in calculations
Interest on SSY is calculated on a monthly basis. The balance as on 5th of each month is used to calculate the interest for that month. If withdrawal is made after 5th then the amount withdrawn is deducted while calculating the balance. The total interest earned is then added to the balance at the end of the year. Interest is compounded annually. The account is then credited to the account at the end of each financial year.
How to get maximum benefit
Investment made in SSY is eligible for tax deduction under section 80C. Provided that someone has chosen the old tax system. The interest earned on deposits is also completely tax-free, making it an attractive investment option. Apart from this, the amount received on maturity is also tax free.
To maximize the interest earned in SSY, experts recommend depositing the maximum permitted amount of Rs 1.5 lakh at the beginning of each financial year. With this, the investment amount benefits from compound interest throughout the year. Due to this, the total return is higher than the monthly contribution.