The Sukanya Samriddhi account, which gives government-guaranteed, tax-free returns, is a popular savings mechanism in India for parents with girls. However, creating a Sukanya Samriddhi Yojana (SSY) account simply may not be enough to secure your daughter’s future for a variety of reasons.
Sukanya Samriddhi has a long-term duration
The Sukanya Samriddhi Yojana is of 21 years duration and it is evident that equities investments are the greatest strategy to earn long-term inflation-beating returns. Unless you are a person who knows how to spend and keep your money. It is recommended that allocate more cash to equity funds rather than depending only on debt investments for goals that are more than ten years away.
Sukanya Samriddhi Account is not investor-friendly
The Sukanya Samriddhi Yojana account has several limitations and restrictions that make it less beneficial to investors. The money in your account can only be used for school and marriage expenditures.
Sukanya Samriddhi’s account has a longer Lock-in period
Sukanya Samriddhi Yojana has a lengthy dedication period for investment. Sukanya Samriddhi Yojana matures 21 years after the account is opened. Only half of the funding is available for higher study until the girl reaches the age of 18.
Deposits are limited to the first 15 years in Sukanya Samriddhi Account:
Another unusual limitation is that, despite the account’s 21-year lifespan, deposits can only be made for the first 15 years.
Sukanya Samriddhi withdrawal and maturity policies
When a girl reaches the age of 18, her guardians can take up to 50% of the account balance in a fiscal year. According to the Department of Posts regulations, withdrawals can be made in a single transaction or in installments, with a maximum of one withdrawal per year and a maximum of five years.
The dynamic interest rate on the Sukanya Samriddhi account
The Sukanya Samriddhi Yojana (SSY) currently has an interest rate of 8%. This Sukanya Samriddhi Yojana interest rate keeps on changing on a quarterly basis. According to reports, this may not be adequate to amount to the rising inflation connected with aspirations such as school and marriage fees. Sukanya Samriddhi Yojana is a comprehensive investment approach. As a result, when compared to mutual funds, it does not give a return that outperforms inflation.