An increase in interest rates have made Sukanya Samriddhi Yojana even more attractive to people. The central government-backed scheme aimed at the security of female child can be an attractive investment option.

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What is Sukanya Samriddhi Yojana?

Launched in 2015, the scheme is aimed at safety and well being of girl child. As per the scheme, a single account can be opened in the name of a girl child who is not more than ten years old by the parent or guardian. The account could be opened in any commercial bank or post office by the parent or guardian easily.

What is the minimum deposit?

The account can be opened with an initial deposit of not less than Rs 250. Deposits can be made in to the account numerous times without limit, but on condition that the total annual deposit will not exceed Rs 1,50,000 and a minimum deposit of Rs 250 is made every year.

The account matures when it completes 21 years from the date of opening, whereas deposits can be made only for the first fifteen years from the date of opening.

However, there is several other options within the scheme that will make the account even more attractive. There is the option of partial withdrawal once the child becomes 18 years old. This is made available to ensure that the account could support the future education and even marriage expenses of the girl.

Benefits of the scheme

The scheme is highly beneficial for anyone looking for securing the future of their girl child. One key plus point of the scheme is the high returns due to significantly higher interest rates. The rates for the scheme is significantly higher than other deposits and stands between 8 percent and 9.2 percent. With the interest rate set to rise to 8.5 percent from 8.1 percent next month, the scheme gives one of the highest interest among conventional bank deposits. In fact it comes with the highest interest rate among saving schemes after the senior citizen savings scheme.

In addition it also provides serious tax benefits also. The contribution to the scheme qualifies for tax deduction under Section 80 C making it a tax saver. In the same manner the interest accumulated from the scheme too is exempted from tax.

Thus an account under the scheme will not only secure the future of the child but also aid in wealth generation.

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First Published:Sept 25, 2018 12:17 PM IST