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Analyzing the Sukanya Samriddhi Yojna

The Sukanya Samriddhi Yojna was launched by the government with aim to promote Girl

education and fund her marriage expenses. The account is opened in the name of girl child of

not more than 10 years of age and salient features are as follows:

Parameters Sukanya Samriddhi Yojna

1. Tenure 21 years and accepting deposit till 14 years from date opening.

2. Tax exemption Yes, u/s 80C.

3. Minimum and Maximum amount Rs.1000 and Rs.1,50,000/-

4. Interest 9.10% and decided annually.

5. Pre mature withdrawal 50% amount when girl attains 18 years of age.

6. Maturity End of 21 years from date of opening / Girl is married before this tenure.

Our call:-

Your reason for opening this account could be – Tax exemption for self and/or building

wealth for your daughter.

For Tax purposes, many of you exhaust your limit (u/s 80C) in the form of ELSS/ PF /Life

insurance and hence it can’t be used as a Tax saver product.

We feel it’s a product which is suited for low income families as they also get an

additional benefit in form of tax exemption.

Considering the current education scenario, your daughter will require maximum

support during her schooling& college days - where she needs to prepare for

competition,go for educational excursions within and outside India, enroll in foreign or

expensive Indian private universities, which this Yojna fails to gratify.

If genuinely you want to build wealth for your daughter for her education, the best way

is Equity. The time horizon is long, no liquidity pressure and purpose is defined.

Start a SIP in an equity fund, dedicated to your daughter and let the compounding work

its own way. Over the longer horizon, the equity returns surpasses debt, and volatility is

nullified.

If one is risk averse, put atleast 50% in the Equity and 50% in debt or in a Balanced fund

(Tax prudent) that will give you better returns than SSY and also the liquidity.

If one can understand that Girl child is a boon in the house and she is not a burden in form of

marriage expenses and her education, the scheme in itself shall not hold any weight.