How to open an Sukanya Samriddhi Scheme Account

Can be opened in any post office or designated branches of PSU banks with a minimum investment of `1,000. The maximum investment in a financial year is `1.5 lakh and deposits can be made for 14 years after opening the account. A parent can open an account for a maximum of two daughters, but the combined investment in the two accounts cannot exceed `1.5 lakh a year. The account matures when the girl turns 21, though up to 50% of the corpus can be withdrawn after she is 18 or gets married.

 

Should you invest in Sukanya Samriddhi Scheme ?

You invest in the PPF for 15 years and then do as you please with the maturity amount. Some buy a house while others spend on children's marriage or education. The instrument itself does not offer a goal. On the other hand, the SSY nudges a parent to save for specific goals--the daughter's education and marriage. But experts also doubt if the government will be able to monitor the usage of the funds.

However, since this is a debt based scheme, the SSY won't be able to generate very high returns. If a couple starts putting away `1.5 lakh a year in the SSY when the child is 10, the corpus would grow to `28.89 lakh in 11 years, by the time she is 21.If the girl is 5 years old and they save for 14 years, the investment would grow to `42.88 lakh by the time she is 19.

This might appear attractive by today's standards but it will not be enough to pay her college fees in the year 2031. The interest rate too would not be as high as it is right now. This is why experts advise that the SSY should be used in combination with other investments, such as equity funds, for saving for a child's future goals. A foreign degree can easily cost upwards of `25 lakh at today's prices.

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