Sukanya Yojana: This small saving SSY scheme will make your daughter millionaire or maybe crorepati at 21 - Check what experts suggest

Sukanya Scheme: At a time when stock market returns are nosediving, people are moving towards government-backed small saving schemes. Though the Narendra Modi government has slashed small saving scheme interest rates for the April to June 2020 quarter, there are some schemes that are still lucrative. Sukanya Samriddhi Yojana or Sukanya Yojana is one such scheme where you can fix your return till your daughter turns 21 years. The Sukanya Yojana chat suggests that either of the parents of a girl child or both, can invest in this scheme for 15 years (in the changed rules, earlier it was 14 years) if you start investing in Sukanya Samriddhi Yojana account immediately after the birth of your daughter. According to tax and investment experts, after Provident Fund or EPF, Sukanya Yojna interest rate of 7.6 per cent is highest. Hence, for those small saving scheme investors who want highest returns along with tax-saving investment options, then one should invest the entire Rs 1.5 lakh Section 80C annual tax exemption limit into this Sukanya Yojana account. This will not only give highest returns, but it will also ensure a guaranteed return once your daughter turns 21.

Speaking on Sukanya Scheme Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "Sukanya Yojana account can be opened in any of the banks operating in India. Currently, the Sukanya Scheme is fetching 7.6 per cent interest per annum, which is still much higher than other small savings schemes like PPF, NPS, tax-saving bank fixed deposits, etc." Jhaveri went on to add that Sukanya Yojana demands disciplined investment as one can't withdraw money till its daughter turns 18 years of age (subject to some exemptions). Even after 18 years of the girl child, only 50 per cent of the account balance can be withdrawn for the higher studies of the girl child.

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Elaborating upon the benefits of Sukanya Samriddhi Yojana account Balwant Jain, a Mumbai-based tax and investment expert said, "In Sukanya Samriddhi Yojana, the interest rate remains same throughout the investment year as Sukanya Yojana account fetches interest rate available at the time of account opening for the entire investment period. So, if someone opens Sukanya Samriddhi Yojana account in April to June 2020 quarter, he or she will continue to get 7.6 per cent Sukanya Yojana interest rate 2020 throughout the investment period even when the Sukanya Samriddhi Yojana interest rate further goes down."

Elaborating upon the returns one can get while making investment in Sukanya Samriddhi Yojana Jhaveri said, "Since, Sukanaya Yojana is fetching highest return after EPF or PF, it's advisable to those parents who have a girl child and have low risk appetite to invest their 1.5 lakh annual investment limit under Section 80C of the Income Tax into the SSY account." 

Following the above investment strategy, if someone invests Rs 12,500 per month or Rs 1.5 lakh per annum in Sukanya Samriddhi Yojana Account, the Sukanya Samriddhi Yojana Calculator suggests that one will be able to grow Rs 63,97,855 when one's daughter will turn 21 years of age. If both the parents does the same for their girl child then both parents will be able to grow Rs 1,27,95, 710 or Rs 1.27 crore when their daughter turns 21 years. Now, its up to the parents whether they want their daughter to become a millionaire or a crorepati at the age of 21. 

Source: Sukanya Samriddhi Yojana Calculaor HDFC Bank

However, one has to be aware that income tax exemption limit in SSY isd only Rs 1.5 lakh per annum. So, either both parents will have to share the income tax exemption or both will have to share the tax exemption available in SSY under Section 80C.