The Sukanya Samriddhi Yojana (SSY) is a popular savings scheme that many parents opt for to secure their daughter’s future. While most parents are familiar with the benefits of the scheme, such as tax savings and high-interest returns, they often overlook the crucial aspects of SSY maturity and how to best utilize the funds for their daughter’s education and marriage. This article explains when SSY matures, how much can be withdrawn, and strategies to optimize the maturity amount.
Understanding Sukanya Samriddhi Yojana (SSY) Maturity
An SSY account matures 21 years from the date of opening or earlier if your daughter gets married after turning 18. Contributions to the account, however, are required only for the first 15 years. Once the 15-year deposit period is over, the account continues to earn interest until it reaches maturity, even if no additional deposits are made.
Example:
If you open an SSY account when your daughter is 5 years old, you can contribute for 15 years until she turns 20. After that, no further deposits are allowed. However, the account will continue to grow with accrued interest until your daughter turns 26. If she gets married before turning 26 (but after turning 18), the account will mature at the time of her marriage.
How Much Can You Withdraw Before Maturity?
While the full balance can be withdrawn only upon maturity, partial withdrawals are allowed under certain conditions:
- Partial Withdrawals for Education:
You can withdraw up to 50% of the account balance for your daughter’s education. This withdrawal is permitted after she turns 18 or completes her 10th standard—whichever comes earlier. - Flexible Withdrawal Options:
The 50% withdrawal can be made either as a lump sum or in annual installments for up to five years. For instance, you can use this option to fund her education expenses for classes 11 and 12, as well as her undergraduate studies.
Important Note:
There’s a common misconception that withdrawals are allowed only after your daughter turns 18. In reality, the government’s notification states that eligibility is based on either age (18 years) or the completion of the 10th standard, whichever happens first.
Maximizing Your Daughter’s Future Goals with Sukanya Samriddhi Yojana
To make the most of SSY, it’s essential to plan strategically. While the scheme offers guaranteed returns and tax benefits, it should not be the only tool in your financial plan. Here’s how you can optimize its benefits:
1. Don’t Rely Solely on SSY
SSY is a debt-oriented investment. While it’s excellent for stable returns, it may not be enough to keep up with rising education costs or inflation. Consider complementing SSY with equity investments to ensure your savings grow faster and meet future expenses.
2. Diversify for Liquidity
SSY is an illiquid investment, meaning withdrawals are restricted. To maintain financial flexibility, allocate at least 25% of your debt portfolio to liquid debt funds. These funds can provide quick access to cash during emergencies or when rebalancing your portfolio during market fluctuations.
3. Plan Withdrawals for Education Expenses
The partial withdrawal option can cover expenses for higher education, such as classes 11 and 12, and the initial years of college. By the time your daughter completes her third year of graduation, she will likely reach 21, and the account will mature. Use the maturity amount to fund later educational needs, such as post-graduation or professional courses.
4. Strategize Contributions
Since contributions are allowed only for the first 15 years, plan your investments wisely. After the contribution period ends, explore other options like mutual funds or PPF to continue saving for your daughter’s goals.
5. Balance SSY with Other Investments
Education and marriage expenses can be significant. Decide how much of these costs will be funded through SSY and how much will come from other investments. Relying too heavily on SSY without considering its withdrawal rules may lead to financial challenges.
Upshot
Sukanya Samriddhi Yojana is a powerful tool for securing your daughter’s future, offering tax benefits and guaranteed returns. However, it should not be your sole investment. By understanding the maturity rules, planning withdrawals effectively, and diversifying your portfolio, you can maximize the benefits of SSY while ensuring financial flexibility. Smart planning and a balanced approach will help you achieve your daughter’s education and marriage goals seamlessly.
Take charge of your financial planning today, and make the most of what SSY has to offer!
Also Read : Best Investment Strategies for Your Child’s Higher Education
