SSY: Invest for its high and tax-free return with zero credit risk

Only parents of a girl child who do not mind the long lock-in should go for it

The government recently hiked the interest rate on the Sukanya Samriddhi Yojana (SSY) to 8.2 per cent. Along with the Senior Citizens Savings Scheme (SCSS), it now offers the highest return among all small savings instruments.  

High return, no credit risk

SSY’s return of 8.2 per cent is tax-free. SCSS pays a similar rate but it is taxable. “An instrument would have to offer a return of almost 12 per cent to generate an 8.2 per cent post-tax return for an individual in the 30 per cent tax bracket,” says Deepesh Raghaw, a Securities and Exchange Board of India (Sebi)