How much return will you get by investing ₹ 1.5 lakh annually in SSY Scheme? Know the complete mathematics, compounding and important planning rules for converting ₹22.5 lakh to ₹71.82 lakh.
Sukanya Account: Want to save money for your daughter and not have to worry? So there is a scheme of the government which does both the tasks together. Its name is Sukanya Samriddhi Yojana. Currently, the government is offering 8.2% interest, which is the highest among all other small savings schemes. The most special thing about this scheme is not its returns, but the secret timeline, which very few parents know. People often think that after saving money for 15 years, the matter is over, but the real magic begins only after that. Let us know if you invest ₹ 1.5 lakh every year, how much money will you get in your hands in the end? And what is the wonder of those last 6 years?
What is Sukanya Samriddhi Yojana?
This is a government savings scheme, especially designed for daughters. Its purpose is to prepare money for the daughter’s education and marriage. There is no fear of losing money in this, because it is guaranteed by the government itself and the interest rate is also much better than other saving schemes.
Why does one have to deposit money in Sukanya Yojana only for 15 years?
In this scheme, money has to be deposited in the daughter’s account only for the first 15 years. After this, you do not have to pay even 1 rupee from your pocket for the next 6 years. Your Sukanya account matures after 21 years. That means, after depositing money for 15 years, your old fund remains in the account for the remaining 6 years and interest keeps getting added on it.
How much will it cost to deposit ₹ 1.5 lakh annually in SSY?
If someone deposits ₹ 1.5 lakh every year in the name of his daughter, then he has to deposit this amount only for 15 years. That means the total investment will be ₹22.5 lakh. After this you do not have to deposit any money, but the account continues till completion of 21 years and interest continues to be received on the deposited amount.
How does ₹22.5 lakh become ₹71.82 lakh in Sukanya Samriddhi?
At ₹1.5 lakh every year, you deposit a total of ₹22.5 lakh in 15 years. After completion of 15 years, you stop depositing new money, but the government keeps paying interest of 8.2% for the next 6 years on the entire huge amount of ₹ 22.5 lakh and the interest received on it. With the magic of this no deposit period, your total interest increases to around ₹49.32 lakh. When 21 years are completed, your total investment and interest together amount to a whopping sum of ₹71.82 lakh. This means that the money you invest can grow more than three times over time and come into the hands of your daughter.
Why are the last 6 years considered the most special in Sukanya?
Many people think that big returns come only by depositing more money. Whereas the last 6 years are the most important part of this scheme. This is because the investment stops after 15 years. Despite this, interest continues to be received on the entire amount present in the account. Every year the interest amount becomes more than before. It is during this time that compounding shows the fastest effect. This means that your fund continues to grow even without depositing new money.
What are the conditions for opening SSY account?
- The age of the daughter should be less than 10 years at the time of opening the account.
- You can invest a minimum of ₹ 250 and a maximum of ₹ 1.5 lakh annually.
- The entire money received on maturity is tax-free.
- When the daughter turns 18, some money can also be withdrawn for her education expenses.
Under what circumstances does interest stop being received in SSY?
- As soon as 21 years are completed, interest on the account stops.
- If the daughter gives up her Indian citizenship or becomes an NRI, the interest stops immediately.
- Money deposited above the annual limit of ₹1.5 lakh not only remains interest-free, but also does not count for tax exemption, and the excess amount is refunded.
What documents are required to open Sukanya account?
One has to go to the nearest bank or post office and submit any valid KYC document like daughter’s birth certificate, parents’ identity and address proof, voter ID. This account is opened only for two daughters. But if after the first daughter, twins or three girls are born together in your house, then you can open this account in the name of all three girls by submitting the medical certificate from the doctor.
Disclaimer: This article is only for general information and awareness. Before taking any decision related to investment, definitely consult your financial advisor or the concerned bank or post office.