Sukanya Samriddhi Yojana account gives 8.2% per annum. As per rules, the account matures in 21 years (from the date of account opening, and not at the girl’s age of 21). Also, you can only make investments for the first 15 years. For the remaining 6 years, you can’t invest more, but your corpus keeps earning interest. And the maximum you can invest in a year is Rs 1.5 lakh.
How much corpus can you create using Sukanya Samriddhi Account after 21 years?
- Rs 25,000 yearly – Maturity amount is Rs 11.97 lakh
- Rs 50,000 yearly – Maturity amount is Rs 23.94 lakh
- Rs 75,000 yearly – Maturity amount is Rs 35.91 lakh
- Rs 1.00 lakh yearly – Maturity amount is Rs 47.88 lakh
- Rs 1.25 lakh yearly – Maturity amount is Rs 59.85 lakh
- Rs 1.50 lakh yearly – Maturity amount is Rs 71.82 lakh
Would these amounts be enough for your daughter? It depends on each parent’s view. But mind you, these are figures after 21 years.
But even nowadays, good professional courses in India easily cost about Rs 20-25 lakh. And if you inflation-adjust these figures for the next 15-20 years, then the amount required for similar education would be a much bigger number.
So chances are that the amount accumulated via Sukanya may not be enough. Also, there is a debatable Sukanya rule which allows withdrawal up to 50% of this corpus for higher education.
Solution?
It’s actually simple, and many of you already do it.
If your daughter is still young and you still have 10+ years before her higher education expenses begin, then you need to invest some money in equities.
Sukanya, no doubt, is a solid product. But it’s a debt product which currently offers 8.2%. And many educational courses witness much higher inflation, at least in the pre-AI era. So to generate inflation-beating returns, you need to have some allocation to equities.
How much you should allocate between equity funds and Sukanya for your daughter’s future depends on your risk profile. If you aren’t conservative, then a higher allocation to equity is better, assuming your daughter is young and you have several years before her higher education starts.
A few suggestions:
If you are ultra-conservative, then just stick with 100% in Sukanya and PPF.
If you only want to take limited risk, then have 60-75% in Sukanya and/or PPF and the remaining 25-40% in equity funds.
If you are moderately aggressive or more, then 75% or more can be put into equity funds.