How good is Sukanya Samriddhi Yojana? It seems to be giving great returns.
The fact is that as economic growth grows, the interest rate continue to decrease. In every develop country, the interest rates are at a extremely low. At the time that SSY was introduce in January 2019 it was 9.2 percent, but it has dropp to 8. In addition, the economy continues to grow, the rates will continue to decrease.
Additionally, the average inflation rate for education over the last 10 years is 10/12% while general inflation is around 7 percent. It is therefore nearly certain that the Real returns from Sukanya Samriddhi Yojana may be negative.
If one is still looking to invest, then they can open an SSY account and then pre-maturely close it after 5 years since the interest rate for the time is expect to be good and higher than other scheme of debt or bank FD of the government.
To plan a child’s education or marriage, you can consider alternatives to invest in.
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It’s a product of the government. It is possible to invest only. If you have one daughter. You must invest regularly (minimum Rs.250 and a maximum of Rs.150000 during the calendar year) over a period of 15 years starting from day of account opening. The account will be mature at the age of 21. You are able to withdraw 50 percent of the amount once she turns 18 , but in certain circumstances only (for the purpose of education, or for marriage or marriage to her). If she was married before age of 18, you can shut down the account.
As of now, the return currently, the return is 7.1 percent as announce by the government. There are a variety of products available to help you invest if are planning your daughter’s wedding or higher education.
There’s no risk in this one. It’s a straightforward to understand product. With the current interest rate of 7.6 percent p.a with a government-backed and backed by the govt, it is one of the most attractive investment options within the fix income low risk category.
The only condition in this contract is the time lock-in of 21 years and it is use only for girls younger than 10 years old The maximum amount of contribution is limit to 1.5 L per annum.
However, there is always the possibility of returns. Being further reduce by the government, due to the global trend of decreasing rates of interest.
If that occurs then the whole balance at the expense of an investor could begin to earn a lower interest rate, and because of the lock-in time it will be impossible to withdraw the funds early enough and also invest elsewhere.