tax saving – Stable Investor

Tax Saving on Health Insurance (Section 80D) – Detailed Guide for FY 2018-19 AY 2019-20

by Dev AshishMarch 6, 2019March 6, 2019 2 Comments

Health insurance is like an umbrella – something that you don’t need every day; but once in a while when it rains, it really saves the day for you. On all other days, you won’t miss it. But when it rains and if you don’t have it, you will feel its need.

A good health insurance policy helps to protect your financial savings and makes you better prepared for medical emergencies and expenses.

And besides the obvious medical coverage, health insurance plans also provide tax benefits to you.

Luckily, under Section 80D of the Income Tax Act, you get tax benefits for expenses towards health insurance premiums, preventive health checkup and other medical expenses.

Since most of you will not be hospitalized ever (I hope so!), you would be more interested in the tax benefits on the medical insurance premiums. And yes, indeed the premium paid towards health insurance is tax deductible under section 80D of the Income Tax Act, 1961.

Let’s move on and understand the tax benefits on health insurance in a bit more detail.

What is Section 80D that gives Tax Benefits on Health & Medical Insurance?

Even if tax benefits weren’t there, even then buying health insurance is a sensible decision.

Why would you want to pay big hospital bills when you can buy medical insurance by paying a small premium to cover that risk.

Imagine not buying health insurance and saving Rs 10,000 for 3-4 years and then getting hospitalized with a big bill of Rs 5 lakh. All small savings you made by ‘not buying’ health insurance is screwed up with a medical bill several times larger.

Unfortunately, most Indians still don’t see it like that.

They feel its an unnecessary expense and waste of money. Luckily, our governments have offered additional freebies in form of tax benefits to push people to buy health insurance.

And this benefit is offered via the Section 80D of the Income Tax Act, 1961 which relates to the tax deductions on medical insurance.

Section 80D specifically provides deduction in taxable income to the extent of the premiums paid on the purchase of health insurance or medical insurance or mediclaim products.

It even includes the premiums paid for the health insurance of your parents, children and spouse (wife/ husband).

And it doesn’t matter whether you purchase health insurance through a person or go for an online health insurance cover which are gaining popularity these days. You will get tax benefits in either case.

Also, the tax benefits under Section 80D are over and above the benefits under other sections like Section 80C.

Who is eligible for Tax Benefits under Section 80D?

If you are paying premiums for health or medical insurance purchased for the following, you will get tax benefits under section 80D:

Yourself
Your spouse
Dependent children
Parents

What about other family members?

Like, let’s say your brothers, sisters, father-in-law, mother-in-law, uncles, aunts, cousins, etc.?

Health insurance premium paid for any other person is not eligible for tax deduction. But you can ofcourse include other family members in the health insurance coverage if you wish to. It is just that the premium paid for them cannot be considered for tax benefits.

Maximum Deduction Limit under Section 80D for FY 2018-19 (AY 2019-20)

There are several different types of deductions that you can be claimed for tax benefits under Section 80D:

Tax deduction on health insurance premiums paid for yourself, spouse & children
Tax deduction on health insurance premiums paid for parents
Tax deduction on medical expenses of super senior citizens
Tax deduction on preventive health check-up expenses

Let’s have a look at each of these in detail:

Tax Deduction on Health Insurance Premiums Paid for Self, Spouse & Children (Family):

If you pay the premium for health insurance taken for you, spouse and children, then you can claim a total deduction of up to Rs 25,000 for FY 2018-19 (AY 2019-20).
If you or spouse is a senior citizen, then you can claim a higher total deduction of up to Rs 50,000 for FY 2018-19 (AY 2019-20). This limit for senior citizen was revised upwards in the past years. Earlier (in FY 2017-18 AY 2018-19), if you or spouse were a senior citizen, then the maximum deduction that could be claimed was up to Rs 30,000. This has now been revised to Rs 50,000.

In addition to the above deduction, you can also get tax deductions for premiums paid for parents.

Tax Deduction on Health Insurance Premium Paid for Parents:

If you pay the premium for medical or health insurance of your parents’, then you can claim deductions as follows:

If both parents are not senior citizens (< 60 years), then you can claim a deduction of up to Rs 25,000 for FY 2018-19 (AY 2019-20)
If even one parent is a senior citizen (>=60 years), then you can claim a deduction of up to Rs 50,000 for FY 2018-19 (AY 2019-20). This limit for senior citizen was revised in the past year. Earlier (in FY 2017-18 AY 2018-19), if your parents were senior citizens, then the maximum deduction that could be claimed was up to Rs 30,000. This has now been revised to Rs 50,000.

It is worth noting that while claiming deductions under Section 80D, you cannot include premiums paid for children who are earning. But you can still claim the benefit for earning spouse and parents.

Tax Deduction on Preventive Health Checkup Expenses:

If you spend money on getting health checkups done during the financial year, then you can also claim a deduction of up to Rs 5000 for preventive health checkup for self, spouse and children under Section 80D.

But this is not an additional benefit but is inclusive within the overall limits discussed above. That is, the total tax benefit for health insurance premium and preventive health checkup is limited to Rs 25,000 (or Rs 50,000), as the case may be. Remember that the limit of Rs 5000 is the maximum total deduction allowed for preventive health check-ups.

Also, this deduction cannot be claimed on a per person basis but as an aggregate option available – so the total deduction allowed cannot be more than Rs 5000.

For example – Suppose you pay a health insurance premium of Rs 21,000 for self, wife and children. In addition, you also get yourself a preventive health checkup that costs Rs 6000. Now, how much tax deduction are you eligible for? You are allowed a maximum deduction of Rs 25,000 under Section 80D. So you get a deduction of Rs 21,000 towards insurance premiums paid; and Rs 4000 for expenses towards preventive health check-up. The deduction towards preventive health check-up has been restricted to Rs 4000 (against your actual expense of Rs 6000) as the overall deduction cannot exceed Rs 25,000 in this case (i.e. Rs 21,000 + Rs 4000).

Side Note – As you cross 35-40, it actually makes sense to get yourself evaluated medically atleast once a year so that any condition/disease in its early stages can be better handled and addressed appropriately. So this tax deduction on preventive health check-up expenses under section 80D also has positive health side effects!

Tax Deduction on Medical Expenses for Uninsured Senior Citizens (>= 60 years) (Section 80D) – You or Parents

If you or any of your parents are a senior citizen, i.e. above 60 years, and have not purchased any health or medical insurance, then you can avail a deduction for any medical expenditure incurred up to Rs 50,000 in FY 2018-19 (AY 2019-20).

Remember, to claim this deduction for actual medical expense, the concerned person must be a senior citizen (you, spouse or parents) and also uninsured (i.e. no premium should have been paid for any health insurance).

Before FY2018-19 and till FY2017-18, this rule was applicable for uninsured ‘very senior’ citizen (above 80 years) and the limit was set at Rs 30,000 per financial year. Now, this benefit is available to younger(!) senior citizens (who are above 60 years) too.

So let me summarize the Income Tax deduction of Health Insurance Premiums in India.

Tax Deductions under Section 80D for Health Insurance (Financial Year 2018-19 or Assessment Year 2019-20)

The table below lists the tax deduction limits applicable to health insurance premiums (for the financial year 2018-2019 or assessment year 2019-2020):

So what will be combined limits on tax deductions for a family with self, spouse, children and parents?

If you, spouse, children and parents are all below 60 years of age, then the total limit is Rs 25,000 + Rs 25,000 = Rs 50,000 under Section 80D
If you, spouse, children are below 60 years; and if even one of your parents is above 60 years of age, then the total limit is Rs 25,000 + Rs 50,000 = Rs 75,000 under Section 80D
If any of you or spouse is above age 60; and if even one of your parents is also above 60 years of age, then the total limit is Rs 50,000 + Rs 50,000 = Rs 1,00,000 Rs 1 lakh under Section 80D

But please do remember that these are maximum limits specified under Section 80D. If the actual premium paid is less than the limits, then the benefit will be limited to the actual premiums paid only.

To further aid the understanding, allow me to share a few examples.

Examples of Medical Insurance Premiums & Section 80D Tax Benefits

Case 1: You (28), Spouse (27), Child (2), Father (58), Mother (56)

You are eligible for Rs 25,000 towards health insurance premium and checkup for self, spouse and child. In addition, you are also eligible for Rs 25,000 towards health insurance premium and checkup for parents. Since no one in the family has attained 60 years of age, the total deduction eligible under Section 80D is Rs 50,000 for the financial year.

Case 2: You (31), Spouse (29), Child (4), Father (63), Mother (58)

You are eligible for Rs 25,000 towards health insurance premium and checkup for self, spouse and child. In addition, you are also eligible for Rs 50,000 towards health insurance premium and checkup for parents (as one of the parent is above 60). Since one of the parents has attained the age of 60, the total deduction eligible under Section 80D is Rs 75,000 for the financial year.

Case 3: You (61), Spouse (55), Father (82), Mother (79)

You are eligible for Rs 50,000 towards health insurance premium and checkup for self and spouse as you are in senior citizen category yourself. In addition, you are also eligible for Rs 50,000 towards health insurance premium and checkup for parents (as one or both the parent are above 60). Since both you and your parents have crossed the age of 60, the total deduction eligible under Section 80D is Rs 1,00,000 or Rs 1 lakh for the financial year.

Sample Calculation of Tax Deductions under Section 80D

Suppose you are aged 38, your wife is 35, son is 8 and daughter is 5 years old.

You have taken a health insurance plan for all for of you that has an annual premium of Rs 23,000. In addition, you had to pay Rs 8000 for preventive health checkup during the financial year.

In addition, your parents aged 66 and 59 are also dependent on you. For insuring their health, you have taken a health cover for them separately for which the premium is Rs 57,000.

So what all tax deductions can be claimed by you for the financial year under Section 80D?

For Self (+ spouse + children) – All of you are under the age of 60. You are eligible for Rs 25,000 towards health insurance premium and checkup for self, spouse and child. Since the premium + health checkup costs exceed the limit (Rs 23,000 + Rs 8000 = Rs 31,000), the benefit available will be limited to Rs 25,000 only.
For Parents – One of the parents is above 60 and hence, senior citizen. Since you are paying medical insurance premium for them, you are eligible for Rs 50,000 towards health insurance premium. Since the premium exceeds the limit (Rs 57,000), the benefit available will be limited to Rs 50,000 only.
Therefore, the total deduction available in this case will be Rs 25,000 + Rs 50,000 = Rs 75,000 only.

I hope this fully explains everything there is about the tax savings that you can do with your health insurance under Section 80D.

So let’s move on…

Tax benefit on Multi-year Health Insurance policy under Section 80D

Many people pay health insurance premiums for several years in one go as there are discounts on offer for multi-year health insurance policies.

If that’s the case, then the tax deduction is allowed proportionately over the years for which the benefit of health insurance is available, subject obviously to the overall limit for each financial year).

So let’s say you are 35 years old (i.e. less than 60 years) and your health insurance policy for 1 year has a premium of Rs 15,000 and that for 2 years us Rs 27,000.

So if you go for the 2-year health insurance plan and pay the premium for two years in one financial year itself, then what will be the tax deductions eligible?

Since current rules state that an individual is allowed to claim a deduction of up to Rs 25,000 in a financial year, you will be allowed to claim the total premium paid, but proportionately, over the 2-year period. This means that you will get a tax deduction of Rs 13,500 each (Rs 27,000 divided by 2) in both the financial years.

More things to know about Section 80D tax benefits

It is not necessary to claim deduction using just one policy. You can claim deductions under multiple policies subject to overall limits of Rs 25,000 or Rs 50,000 as explained earlier.
The group health insurance premium paid by your employer is not eligible for deduction under Section 80D. However, if you pay an additional premium to increase the coverage of the existing group cover, then you can claim the deduction against this additional contribution.
The premiums paid for Critical Illness policies are also eligible for tax benefits under Section 80D.
The premiums paid for Top-Up or Super Top-Up health insurance plans are also eligible for tax benefits under Section 80D.
The premiums of term life insurance plans are not included in Section 80D. But in any case, term insurance premiums are eligible for tax benefits under Section 80C instead. (Related: How much life insurance to buy?)
If you have taken a Critical Illness rider as part of the life insurance policy, then the premium paid for the specific rider is eligible for tax deduction under Section 80D.
Whether you are paying a health insurance premium for the first time or you are paying the renewal premium for continuing your existing health insurance, you can claim deductions in either case.
As mentioned earlier, you cannot get benefits on health premiums paid for your brother or sister. You can also not claim benefits for premiums of your father-in-law and mother-in-law. But your spouse, if paying the premiums from her own taxable income, then the benefits can be claimed by your spouse.

A lot of people get confused between Section 80D and very popular Section 80C of the Income Tax Act. Let’s briefly see what is the major difference between the two.

Difference between Section 80D and Section 80C

Section 80C of the Income Tax Act provides deductions of up to Rs 1.5 lakh per year on money spent on various options like life insurance premiums, EPF (& VPF) contributions, PPF savings, NPS, NSC, tax saving ELSS mutual funds, school fee of children, home loan repayment, etc.

(Read more here on how to save tax using Section 80C.)

On the other hand, Section 80D is, in addition, to limit of Section 80C and is meant exclusively for health insurance premiums paid and preventive health checkup, etc. The tax benefit available under Section 80D varies from Rs 25,000 to Rs 1 lakh subject to certain conditions.

I am sure that by now, you would have a clear idea about how to save taxes using health insurance in India.

But let me remind you that whether you get tax benefits or not, health insurance is extremely important.

It’s a must-have for everyone!

Why would anyone want to be penny-wise-pound-foolish and try their lucks? The medical costs are rising and just one visit to a hospital and hospital bill can set you back by a lot of money which will be much higher than the money you can save by avoiding health insurance.

If you are unlucky and end up in a hospital without health insurance, it can erode your hard-earned savings and plunge you in a financial crisis. So do not test your luck for saving just a few thousands.

Luckily in India, you are getting tax benefits on the health insurance premiums you pay.

So you have an added incentive there. You can maximize your tax savings by using health insurance for yourself, family and parents by paying the premiums.

The Section 80D of the Income Tax Act offers one of the best tax-saving benefits in India of up to Rs 1 lakh deduction specifically for premiums paid on the purchase of health insurance or medical insurance or mediclaim products. Do not ignore this tax benefit for your own good.

Complete Guide – Sukanya Samriddhi Account (with Updated 80C Tax Benefits)

by Dev AshishApril 5, 2015January 23, 2019 15 Comments

A friend recently asked me about the newly launched Sukanya Samriddhi scheme. Though I wanted to tell him that for long term, equity MFs are the best bet, I still refrained from giving him an immediate reply and decided to do a little research.

To be honest, I had been hearing this from all quarters that this scheme was a safe option for investment…something on lines of PPF. But I was not sure myself. So I decided to do my bit.

So here is a small guide, which I think covers most of the aspects and features of Sukanya Samriddhi scheme.

What is Sukanya Samriddhi Account (SSA)?

SSA is a new and supposedly risk-free investment product, launched by the government a few months back. It is an investment scheme, launched especially for the girl child. But tax deductions (benefits), can also be claimed by the parents.

The claimed objective of the scheme is to help parents create a corpus of funds for girl child’s education and marriage. But while researching for this topic online, I read it somewhere that with this scheme, government is trying to send out a social message too that girl child is not a burden. And if planned well in advance (through schemes like SSA), it is possible for parents to secure a girl’s future.

People compare SSA with PPF due to similar structure, interests, etc. But it’s not entirely correct to compare, as PPF is not linked to any specific purpose. Whereas SSA, has a very clearly defined end-purpose of girl’s education and marriage.

But how will the government ensure that funds are being used either for education and marriage of the girl child, is another topic of debate (which I don’t intend to cover) in this post. I just hope that this good intentioned scheme is not used primarily for dowry-accumulation, because if that is the case, then it will be really sad.

Who can open a Sukanya Samriddhi Account (SSA) and for whom?

SSA can only be opened for a girl child who is not more than 10 years of age. But for the first year of its operation, government has given a grace period of one year (valid upto 1^stDec 2015) – this means that account can also be opened for a girl who is born between 2nd December 2003 and 1st December 2004.

Only parents or legal guardian of the girl can open this account. And it has to be opened in the name of the child. Please note that you are only allowed to open one account for one girl child. And a maximum of two accounts can be opened for two girls.

How much money can be deposited?

A minimum of Rs 1000 has to be deposited in SSA, in every financial year. And the upper limit has also been set at Rs 1.5 Lacs. But there is no cap on the number of deposit transaction you can make in a given year.

When the account is opened for the first time, you have to mandatorily deposit a minimum of Rs 1000.

But what if you are not able to deposit any money in a particular year? Or you deposit an amount less than minimum required amount of Rs 1000? Don’t worry. For each defaulted year, a small penalty of Rs 50 has to be paid to regularize the account. But please remember that along with the penalty, you also need to pay the minimum of Rs 1000/- for each defaulted year.

An irregular account can be regularized anytime till the completion of first 14 years.

But there is one small issue with the deposit transactions in SSA. As of now, the deposit can only be made by Cash, Cheque or Demand Draft – But Not Online. For those of us who are so used to doing almost all investment related transactions online, this is a big turn-off. But my guess is that it is only a matter of time before online option is made available.

What are the Interest Rates?

For 2015-16, the interest rate for Sukanya Samriddhi Account has been notified as 9.2%, calculated on a monthly basis but added to the account on yearly basis. This interest income is Tax Free (announced in 2015 Budget).

Previously, the rate offered for SSA was 9.1%. Please note that this rate is not fixed and will be notified every year, just like it is done for PPF.

Currently the PPF gives 8.7% and hence on just interest rate basis, SSA @ 9.2% seems to be a better bet. But since these rates are to be revised every year, we cannot be sure whether SSA will always have a better rate than PPF or not. But my guess is that since SSA is also about a social cause, chances of SSA rates going below PPF seem low, atleast for next few years.

But does it mean that SSA is better than PPF? I will request you not to judge the two products solely on basis of interest rates. There are few more important criterias, which should be taken into account before taking a final call.

What is the Duration of the Scheme?

The scheme matures on completion of 21 years from the date of account opening or as the girl child gets married, whichever is earlier. Please note that the girl attaining the age of 21 years has no relevance to maturity period of this scheme.

Though scheme duration is 21 years, you are only allowed to make deposit contributions for first 14 years. After the 14th year, you cannot make any further contribution, but the account continues to earn interest at the notified rates on balance amount for the rest 7 years (upto 21st year).

A few important things to note here are that in case the account is not closed on maturity (even after 21 years), the balance amount will continue to earn interest as specified for the scheme every year. And in case the marriage of girl takes place before the maturity date (i.e. before completion of 21 years), neither any further operation of this account will be permitted nor any interest will be payable beyond the date of marriage.

When is the money paid out?

SSA matures after 21 years of account opening. But money can also be withdrawn for marriage before this 21-year period. But for that, parents have to give an affidavit confirming that girl is an adult (18+ years) and hence reducing the use of money for child marriage.

I am still not sure how government will ensure that money is being used for marriage or education. Please feel free to share your thoughts on this.

Parents are also allowed to withdraw 50% of the balance amount after the girl reaches 18 years of age. But this can only be done for use in girl’s education. Rest of the money is to be left in the account so that it can be used for the marriage purpose.

What are the Tax Benefits for Sukanya Samriddhi Scheme?

The Budget 2015 put SSA in the EEE (Exempt-Exempt-Exempt) category. This means that contributions to SSA can be claimed as deductions under Section 80C. Yearly interest income (which is anyways added back to the amount in account) is also tax-free. And finally, the total amount at maturity or withdrawal is also tax-free.

But keeping SSA under the purview of 80C has its drawbacks too. Section 80C in itself has a ceiling of Rs 1.5 lacs and is also used by other investment options like PPF, 5-year FDs, Insurance, etc.

So in all probability, if you do invest a full Rs 1.5 lacs in SSA and also have other investment in PPF, 5-year FDs, you wont be able to get the full benefit. And that is because even though your investments which are eligible for deduction are more than Rs 1.5 lacs, the upper cap of Section 80C will restrict your deductions to just Rs 1.5 lacs.

Can there be partial withdrawals?

As already mentioned in one of the above section, you are allowed to withdraw 50% of the balance amount at the end of the preceding financial year. But this can only be done once the girl has attained the age of 18 years. And since the maximum age at which the account can be opened is 10 years, there is practically a complete lock-in period of 8 years.

Can there be premature closures?

Yes. It’s possible. The account can be closed prematurely as the girl completes 18 years of age, and provided she gets married before the withdrawal.

How is the interest calculated on Sukanya Samriddhi account?

The interest calculation for SSA is similar to that of Public Provident Fund (PPF). The interest is calculated monthly, but added back to the account at the end of year.

Sample Calculations

The below table illustrates sample calculations for SSA, where a monthly amount of Rs 5000 is deposited. The account is opened when the girl child reaches of the age of 6 years.

As you can see, contribution of Rs 5000 monthly is only made upto the 14^th year of account opening. But the overall corpus grows to almost Rs 30.79 lacs at the maturity in 21^st year.

Also when the girl child reaches 18 years of age, an amount equal to 50% of preceding year’s balance can be withdrawn. In above example, this amount equals 50% of Rs 12.83 Lacs, i.e. about Rs 6.41 Lacs.

Here is another illustration, which shows the amount accumulated in corpus at the end of 21 years (of account opening), depending on amount of annual investment – from Rs 10,000 to Rs 1.5 Lacs.

Is this the best option available?

I will prefer not to answer this question now and give my views later on in the post. But you need to be understand that if you only consider interest rates for choosing SSA over PPF, then that is not the right thing to do. And its because there are important things like liquidity, lock-ins to compare too. What is the point of saving money if you cannot use it when you need it (lock-in)?

How does it compare with PPF?

Documentation Requirements

Only three documents are required for opening of SSA in girl child’s name. These are mandatorily required and are as follows:

Birth Certificate of the girl child

Identity proof of the parent/guardian

Residence proof of the parent/guardian

You can open SSA in any post office or authorized bank branches.

Other Important Things To Note

As of now, there is no nomination facility available for this scheme. In the event of girl’s death, the account will be closed and the balance will be paid to the parent/guardian of the account holder.

The SSA is transferable anywhere in India if there is a need for the same.

If there are two girls, you can invest Rs 1.5 lacs into each girl’s SSA. But you can only claim tax benefit for a maximum of Rs 1.5 lacs (upper cap of Section 80C)

My Thoughts

The very basis on which Sukanya Samriddhi Scheme is based is to provide adequate funds for a girl’s education and marriage. And considering that account can only be opened upto the age of 10 years, its obvious that investment in this scheme is of long term nature (you can only withdraw when girl turns 18). And with this fact in mind that this scheme is to fund long-term goals, a return of 9.2% does seem to be on the lower side, when compared with what well-diversified mutual funds have delivered in the past.

Even in a small study about long-term returns for lump sum investments in mutual funds, it was found that when investment horizon is in excess of 7 or 10 years, it makes sense to invest in mutual funds, almost irrespective of current market levels. And that too in lump sum, if possible. If not, even regular SIP will beat PPF-type returns.

For someone who is adamant on not taking any risk at all, Sukanya Samriddhi Scheme makes a lot of sense. Not everyone is comfortable investing in equity linked schemes and one should respect that fact. A lot of investors prefer guaranteed returns at the cost of earning lower returns. And as a matter of fact, tax-free return of 9.2%, and that too without risk* is not bad at all for a conservative, low risk-appetite person.

* But the risk of lower returns (9.2%), when compared to that offered by equity MFs (12%+) still remains.

While doing research for this post, I came across a post by Prof. Pattabiraman, where he has raised some genuine concerns. I am enlisting a few of them here and you can read the rest in his post:

You are only allowed to withdraw 50% when the girl child reaches the age of 18. But these days, most children complete their schooling by 17 and hence you don’t want most of the money locked at this stage. Education for a girl child is more empowering than marriage and hence money should be easily accessible when it is needed most for education.

In another post about SSA, he mentions few more relevant points:

You are only allowed to invest for 14 years. But what about the rest of time upto 21 years (assuming you opened SSA when the girl child was born)?? At the end of 14^thyear, you can’t even start investing in equity as the real money-making power of equity investing can only be seen if you invest for decades, and not when 14 years have already passed.

So what should one do?

I think that if you can bear with volatilities of stock market investing and can really stay on course for 15-20 years, then there is no sense in parking money in Sukanya Samriddhi Account. And that is even after considering the tax benefits. You should start doing SIP in well-diversified Mutual Fund. Period. No need to think about anything else.

But if you feel that you are not very comfortable with mutual funds, then you can choose to split money between PPF and MF. Or between SSA, PPF and MF.

You can do 60-40 split between MF & PPF. Or a 40-30-30 split between MF-PPF-SSA.

I suggest PPF even though its returns are lower (8.7%) because of higher liquidity when compared to SSA. I personally feel that we generally neglect liquidity when it comes to financial planning. But it’s a very important factor. And I quote from Prof’s post in italics below:

After 15 financial years, the full PPF corpus is liquid. The idea is to have full liquidity on the entire corpus when [the girl] is about to enter college. Liquidity is more important than returns. Adequate exposure to equity mutual funds will always offset the small ~1% difference in return between Sukanya Samriddhi Account and PPF.

To be honest, SSA is more of a savings scheme and less of a investment vehicle. And there is a difference between Saving and Investing.

If there is anything more that you would like to know, please do let me know. And if you find some other useful information which I might have missed out, please share the same in comments and I will add it to the main post for benefit of other readers.