Planning girl childs education with Sukanya Samriddhi Yojana

Government of India in December 2014 launched Sukanya Samriddhi Yojana. With this it allowed people to save and invest for their girl child’s education and marriage. The tenure of the deposit can be up to 21 years from the date of account opening, but the maximum period up to which deposits can be made is 15 years from the date of account opening. It enjoys the status of EEE (Exempt-Exempt-Exempt) and also is eligible for deduction under section 80C of Income Tax Act.

Said that, how can you plan your girl child’s education with the help of Sukanya Samriddhi Yojana? First you need to understand how much corpus you need to accumulate. Say for instance, today the cost of education is Rs. 10 Lakhs and you would be requiring the amount after 15 years. Assuming 7 per cent inflation you would require Rs. 27.6 Lakhs after 15 years. So, Rs. 27.6 Lakhs is the corpus required and you need to accumulate it for your girl child’s education.

At present the interest rate of Sukanya Samriddhi Yojana is 8.5 per cent. So, taking that into consideration you presently need to invest Rs. 90,000 per annum up to 15 years to accumulate the corpus. However, this won’t be the ideal way to go about it. Rather it is better to invest 60 per cent of the amount which in our case would be Rs. 54,000 every year in Sukanya Samriddhi Yojana and remaining 40 per cent i.e. Rs. 31,600 every year in large cap mutual funds. As the rates on Sukanya Samriddhi Yojana are revised every year, it is important to review your corpus annually. You can also consider investing 40 per cent in index funds instead of large cap funds.