Are you searching for an uncomplicated and efficient way to save for your daughter's education and marriage expenses? Do not worry, there is the Sukanya Samriddhi Yojana, a savings scheme launched as part of Prime Minister Narendra Modi's Beti Bachao Beti Padhao initiative in January 2015. This scheme is rapidly gaining popularity among families with girls. It is dedicated to securing the future of the girl child and is backed by different banks or financial institutions. It provides a range of benefits and can be your financial companion.
Let us explore six Sukanya Samriddhi Yojana benefits to secure the future of the girl child:
1. Affordable initial deposit:
You can start a Sukanya Samriddhi Yojana (SSY) account with just Rs.250 with the bank or financial institution. Previously, you would need to submit Rs.1000, which was significantly reduced as a minimum deposit requirement, with effect until July 5, 2018. The flexibility extends to a maximum deposit of Rs.1.5 lakh, allowing you to save for your girl child's future at your own pace.
It is essential to make regular deposits over 15 years from the account's opening date to keep your Sukanya Scheme account active. If you fail to maintain these regular deposits, it may result in the account being labelled as 'Account under default. The good news is that Kotak 811 offers a simple reactivation option on the SSY accounts. You can revive the account by paying a nominal fine of Rs. 50 per year for the default period, and this option is available for up to 15 years from the account's initial opening date. These accessible terms make securing your girl child's bright future easier with Kotak 811.
2. Save for education expenses:
Kotak proudly supports the Sukanya Samriddhi Yojana (SSY) for your girl child's education. Parents or guardians of girls under 10 can open SSY accounts for up to two daughters, securing their educational future. The best thing about this SSY account is that when your daughter reaches 18, you can withdraw 50 per cent of the account balance to fund her education.
However, it is crucial to provide proof of admission to access this benefit. This means that you need to show the school or college admission confirmation to the bank. This simple step ensures that the funds are utilized for the intended purpose, i.e., your girl's education. With Kotak’s support, saving for your daughter's educational journey becomes both accessible and practical.
3. Triple tax benefits:
With the Sukanya Samriddhi Yojana (SSY), you can avail of the tax advantages, making it an even smarter choice for your girlchild's future.
- Tax Deduction: You can claim deductions on deposits of up to Rs. 1.5 lakh under Section 80C of the Income Tax Act. This reduces your taxable income, allowing you to save more.
- Tax-Free Interest: The interest earned on your SSY deposit is entirely tax-free. As a bonus, it compounds annually, helping your savings grow faster.
- Tax-Free Maturity: When your SSY account matures, the amount you receive is entirely tax-free. This means that you do not need to pay taxes on your deposit, leaving you with a more substantial sum to support your girl's dreams.
4. Attractive interest rates:
Sukanya Samriddhi Yojana (SSY) offers appealing interest rates, particularly for accounts opened between October 1, 2018 and December 31, 2018. During this period, the interest rate stands at a competitive 8.6 per cent, making it one of the most attractive rates among small savings schemes.
This high-interest rate is a noteworthy benefit, ensuring your savings grow rapidly, leading to more significant financial support for your child's future aspirations.
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5. Minimal deposits for 15 Years:
With the Sukanya Samriddhi Yojana (SSY), you can avail of a unique convenience. After diligently making deposits for the first 15 years from the account's opening, you do not have to deposit any more. This means that no more contributions are needed until the deposit matures, which occurs 21 years from the date you started the account.
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During this period of reduced financial responsibility, your money will grow in your SSY account as it accrues interest. This means your savings keep multiplying, even without additional deposits. This feature simplifies your savings plan and provides you with more financial flexibility during this phase. Kotak ensures that securing your girl child's future remains straightforward and hassle-free, making the SSY an excellent choice for parents and guardians looking to make smart financial decisions.
6. Premature withdrawal options:
Under special circumstances, banks allow you to make early withdrawals from your Sukanya Samriddhi Yojana (SSY) account:
- If your SSY account has been active for at least 5 years and continues to cause financial hardship due to medical reasons or the passing of a guardian, you can withdraw your savings prematurely.
- In the unfortunate event of a guardian or parent's death, you can also make an early withdrawal.
- If the beneficiary (your daughter) plans to get married after turning 18, you can request the closure of the account before its maturity. However, make sure to notify them of your intent to marry at least a month before the wedding or up to 3 months after the marriage.
- You can also request account closures for any other valid reason. In such cases, you will receive your deposited amount along with the interest earned at the rate applicable to post-office savings bank account or savings bank account.
Wrapping up
Opening a Sukanya Samriddhi Yojana (SSY) account is a simple and accessible step towards securing a brighter future for your daughter. The process is hassle-free, and all you need to do is visit your nearest bank branch to get started.
With the range of attractive benefits offered by SSY, whether it is saving for your girl's education or marriage expenses, you can count on it to be your dependable financial companion. The ease of access, combined with the tax advantages, attractive interest rates, and flexibility in contributions and withdrawals, makes SSY an ideal choice for parents and guardians.
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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
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