The Sukanya Samriddhi Yojana , a government-backed (SSY) is designed to help girls and their financial needs like marriage and education.However, since the precise age at which she will require the funds is unknown the plan tries not to make any assumptions.

Investors, on other hand, should take note of five key years or time periods prior to purchasing SSY. Think about the girl's age and the remaining time for her education as well as wedding.

The process of opening an account (0-10 years)

A SSY account is only opened by the girl (beneficiary) less than 10 years old at the time of opening the account. A proof of birth date is, therefore, mandatory. The rules allow the opening of two accounts for the two girls within a family. It is not possible to open two accounts for a girl. The age of the girl is essential to figure out the time frame of the plan. Here's why:

5 years old

The first request for premature closing of an SSY account is able to be submitted following the expiration of five years from the date of account opening. This is also in accordance with the regulations, only on compassionate grounds like medical aid in life-threatening conditions. However, if the account needs to be shut down for a different reason the account will be closed however, the deposit will be subject to the interest on the Post Office Savings Bank account.

10 years

When the beneficiary i.e. the girl child reaches threshold of 10 she will be able to manage the account on own. She is allowed to make any subsequent contributions to her account. Parents too can deposit money into the same account.

15 years old

To start the SSY account, an first deposit amount of 250 rupees ( earlier it was Rs. 1000) will be required. After that, a minimum amount sum of $250 ( Prior to that, it was Rs. 1,000) as much as a max amount of Rs 1.5 lakh can be placed in the account every year. In order to keep the account in operation deposits should be made for only the first 15 years. If a child is nine years old, the deposits should be continued until the age of 24. Between the ages of 24 and 30, (when the account is mature) the account continues paying dividends on its balance.

SSY is an investment plan that is long-term in nature. The full and partial withdrawal window is indefatigable but it is subject to any application to shut down the account in a hurry.

18 years old

The next time to withdraw can be made at the time that the girl reaches 18. It is clear that the funds will be used only for her personal needs and are not intended for other purposes. The maximum is 50% of the balance on the account for the previous year can be taken out for the purpose for higher education for the girl.

In this regard, it's not just an application form not even a document that is an official admission offer from the educational establishment or an admission slip issued by the institution confirming this financial requirements is required. Additionally, the amount of withdrawal is limited to the amount of fees and other charges to be paid to be paid at time of entry, as indicated in the invitation to admission or in the fee slip that the institution issues.

21 years old

No matter what age whatever the age SSY account will be in effect for 21 years from date of the account's opening. Therefore, if the girl's age is 9 years old, the account will be closed when she reaches the age of 30. The ruleshowever allow for a final closure at any time before 21 years of age if the parent applies for a closure that is premature for the sole purpose of their wedding and proves by an affidavit that she is not younger than 18 at the time of marriage. In some cases, this may be a problem since it is subjected to certain conditions like the ones above.

The appeal

SSY offers the most tax-free return , with sovereign guarantee and has the exempt-exempt exempt (EEE) designation. Annual deposits (contributions) is eligible for Section 80C tax benefits, and maturity benefits are tax-free. SSY is able to be opened in an post office or bank. It is also possible to deposit money using electronic means, i.e., e-transfer to the bank or post office when both have access to the central banking facility.

Alternative investments

SSY is a special program for girls with special requirements. Public Provident Fund (PPF) which is a 15-year program which also includes partial and loan withdrawals options could be a suitable alternative. While PPF accounts are not able to be extended, a PPF account is able to be extended for a block of five years following an initial period of 15 years there is a possibility of the using the funds for different reasons is there.

In accordance with the rules that apply, at any point in time the interest rate of SSY can never be lower than the rate of PPF. In Both schemes, the federal government sets the interest rate on a quarterly basis, based on G-sec yields.

Make sure to mark the date on SSY because there won't be any interest charged on the money deposited after 10th day of the month. When compared with traditional life insurance policies, SSY has a higher score, especially when paired with a term insurance policy.

Conclusion

Calculate how much of the inflated-adjusted amount are required to fund the education and wedding of the girl. SSY is a debt-based investment, so to meet a long-term requirement investing in equity can help. It is possible to invest a part of the money allocated for the needs of the girl child and not rely entirely on it.

This can be the case even for those who have reached your annual Section 80C allowance of Rs 1.5 lakh. Also, consider purchasing an insurance that is solely for term for adequate life insurance for the dependents financially. Naturally, for children younger than that are still in the infant stage, the period for building up funds is longer when compared to children who are nearing 10 years old, however SSY is a viable element of the portfolio.