When Does Sukanya Samriddhi Yojana or SSY Mature? How to Maximize Your Daughter’s education and marriage goals with SSY Maturity?
While many parents register SSY accounts for their daughters’ future education and marriage, few know the maturity rules and how to use them most effectively.
I go into more detail on when the SSY will mature in this post, as well as how to use it prudently and strategically to support your daughter’s goals in school and marriage.
Do you have a daughter that is younger than ten years old? If so, you ought to think about starting a Sukanya Samriddhi Yojana (SSY) for her. The government-backed SSY savings plan provides guaranteed returns, tax breaks, and competitive interest rates (with a quarterly interest rate modification). It is among the greatest debt investment choices for the costs of your daughter’s school and marriage.
However, are you aware of the maturity date of your SSY account and the final payout amount? I will cover all the information you require about SSY maturity in this article, including when it occurs, how much you can withdraw, and how to spend it prudently.
When Does Sukanya Samriddhi Yojana or SSY Mature?
The SSY account will mature 21 years after it is opened, or, if your daughter marries after turning 18, 21 years after that date. But your contribution obligations are limited to 15 years. After that, even if you don’t make any more deposits, the SSY account will continue to generate interest until it matures.
Let’s say your youngster is five years old. You have the chance to contribute in this case for a total of fifteen years. This implies that you can contribute a maximum of Rs. 1,50,000 annually until your daughter turns 20. Nevertheless, you will be unable to contribute any more after she turns 20. But it’s crucial to remember that the account will mature.
How Much Can You Withdraw from SSY?
When the account matures, you can take the full amount out. On the other hand, you have the following choice if you require money prior to the maturity time.
For the daughter’s education, withdrawals up to a maximum of 50% of the balance in the account at the end of the fiscal year before to the application year for withdrawal are permitted. Additionally, your daughter must complete the tenth standard or become eighteen years old, whichever comes first, in order to be eligible for this withdrawal (Government Notification – Dated December 12, 2019).
This implies that you may additionally take out 50% of the remaining amount to cover her 11th grade schooling costs. You can take out a one-time payment in full or in installments When the account matures, you can take the full amount out.
Many of us, nevertheless, believe that the daughter can only make this kind of retreat after she turns eighteen. That is not how things are. The letter states that the daughter passed the 10th standard or reached the age of 18, whichever is earlier.
How to Maximize Your Daughter’s Future with SSY Maturity
Don’t depend on this one item to help your daughter achieve her aspirations for a marriage and an education. Your daughter should include SSY in her debt-reduction and marriage objectives. To combat the inflation in education, equity is a MUST. Therefore, having both debt and equity is essential.
Don’t invest all of the money in SSY if you need to support both goals monthly at a cost of about Rs. 12,500 (or Rs. 1,50,000) annually. This product isn’t very liquid. Therefore, allocating about 25% of your debt portfolio to debt funds is preferable. This will come in useful when you rebalance your asset allocation during the decline in the equity market. Therefore, you have to allocate a tiny amount to debt funds in order to maintain liquidity.
You noted that after she finishes her tenth grade, she can withdraw 50% of her funds. Therefore, this can be included in her expenses for her eleventh, twelfth, first, second, and third years of graduation. Following that, this option becomes limited to a maximum of five installments. However, your daughter may become 21 years old by the time she completes the fourth year of graduation (10th – 16 Years, 11th – 17 Years, 12th – 18 Years, Graduation 1st Year – 19 Years, Graduation 2nd Year – 20 Years, and Graduation 3rd Year – 21 Years). Therefore, money from SSY maturity may be used to pay for the remainder of her graduation and post-graduate expenses.
Only fifteen years are allotted for contributions. You are no longer able to make contributions to the account after that (despite the fact that the maturity occurs either 21 years after the account’s opening date or 19 years after her marriage). You therefore need to be well-versed in where to fund or invest after this restriction.
It really counts how much of these years’ education and marriage-related costs are paid for by SSY and how much is covered by your other investments. Your daughter’s aspirations for school and marriage may be hampered if you do not plan carefully and rely too much on SSY because withdrawal is governed by tight regulations.