Recent article on Mint highlights Why we should not rely entirely on Sukanya Samriddhi to save for children. Few points from the article. While the interest rates are high on Sukanya Samriddhi Account, it’s not the best product to save for children, at least, not the only product that you should rely on. “As the individual is saving for the long term, equities are the best option for such long-term investments,” said Mrin Agarwal, founder, Finsafe India Pvt. Ltd, and co-founder of Womantra.
As the individual is saving for the long term, equities are the best option for such long-term investments,
When a family starts saving for education or marriage of the girl child, they can start investing a small portion in SSA and a major chunk in equities. Invest in equity oriented mutual funds as well as Sukanya samriddhi to get better returns for your children. Sukanya samriddhi Scheme returns on tax free income.SSY is a completely exempt (EEE) investment hence the principal amount invested, the interest earned as well as the maturity amount are all tax exempt. We can withdraw funds only to fund your daughter’s education and marriage expenses or to fulfill a medical emergency by submitting written proof.
For ELSS mutual funds long term capital gains will be taxed at the rate of 10% without the indexation benefit after one year of investment. After 3 years, it doesn’t have any restriction from redeem the mutual funds investment. It provides better flexibility on withdrawal of investment.
SUKANYA SAMRIDDHI SCHEME PROVIDES FIXED RETURNS OF 7.6%. ELSS MUTUAL FUNDS PROVIDE HIGHER RETURNS BASED ON MARKET CONDITION.
In case you are investing in SUKANYA samriddhi only for tax savings, it is not only option. You can invest in ELSS mutual funds for section 80C tax saving. ELSS mutual funds invests in equity instrument and tax saving option as well.
HIGHER RETURNS AND HIGH FLEXIBILITY, ELSS IS THE SCHEME FOR YOU.
FIXED RETURN AND LOW RISK, SUKANYA SAMRIDDHI SCHEME FOR YOU.
Invest 40% of your investment in Sukanya SAMRIDDHI(SS) and 60% in ELSS mutual funds for better return in long term. Investors must keep in mind the withdrawal conditions. A family can withdraw money after the girl child turns 18 or passes the tenth standard in schooling. However, they can withdraw only 50% of the balance available (at the end of the preceding financial year).
ALLOCATE 40% in SS and 60% in Equity for BETTER RETURN AND FLEXIBILITY
How to invest in the Sukanya Samriddhi Yojana :
You can invest in this scheme through your nearby post office or designated branches of participating public and private banks. You will need to submit KYC documents like Passport, Aadhaar Card, etc. along with the required form and initial deposit by cheque/draft.
Sukanya Samriddhi Yojana Account Application form can be downloaded from various sources such as:
- The Reserve Bank of India Website
- The India Post Website
- Individual websites of public sector banks (SBI, PNB, BoB, etc.)
- The websites of participating private sector banks (e.g. ICICI Bank, Axis Bank and HDFC Bank)
List of ELSS mutual funds :
- Axis Long Term Equity Growth Direct Plan
- Aditya Birla Sun Life Tax Relief96 Growth Direct Plan
- ICICI Prudential Long Term Equity Growth Direct Plan
- Mirae Asset Tax Saver Growth Direct Plan
- IDBI Equity Advantage Growth Direct Plan
- Aditya Birla Sun Life Tax Growth Direct Plan
- IDFC Tax Advantage Growth Direct Plan
- L&T Tax Advantage Growth Direct Plan
- HDFC Tax Saver Growth Direct Plan
Select any of the ELSS mutual funds in case you are investing for tax saving. Login to any of mutual fund aggregator platform and start your investment.