Sukanya Samriddhi Yojana – Things to Know

To align with the objectives of the ‘Beti Bachao Beti Padhao’ campaign, Prime Minister Narendra Modi launched the Sukanya Samriddhi Yojana (SSY). It is a government-backed small savings scheme that enables parents to secure the financial future of their daughters.

You may open an account with an authorized private or public bank or the post office in the name of your daughter. The tenure is 21 years from the account opening date or until her wedding after she reaches 18 years of age.

How to open a Sukanya Samriddhi Yojana account

You may open a Sukanya Samriddhi account with the post office or any participating bank. Here is the procedure to open an account.

• Visit the nearest post office or bank branch
• Complete the application form with accurate information and attach necessary documents
• Pay the initial deposit between INR 250 and INR 1.50 lakhs as cash, check, or demand draft
• On successful processing of your application, your account is opened, and you are issued a passbook

Sukanya Samriddhi Yojana (SSY) interest rate

Presently, the Sukanya Samriddhi Yojana interest rate is 7.60%, which is compounded annually. The government determines the rate of interest, which is modified every quarter.

The interest is paid until the end of the term or if the girl becomes a Non-Resident Indian (NRI) or a non-citizen. Moreover, if the minimum amount of INR 250 is not deposited into the SSY account within the designated time, the deposit becomes ‘Account in default’.

This amount continues to earn interest at the prevailing rate except if the default results from the demise of the guardian who opened the account.

What are the features of Sukanya Samriddhi Yojana?

• The account can be opened and operated by parents or guardians until the girl is 10 years old. The operation of the account is given to the girl once she reaches the age of 18 years.
• The minimum deposit during the financial year is INR 250 and the maximum is capped at INR 1.5 lakh in multiples of 100.
• Deposits into the account are payable for 15 years; however, the maturity of the scheme is 21 years.
• If you move your residence, you can transfer your account to another participating bank or post office on submission of the relocation; if you do not have any proof, INR 100 is levied as transfer charges.
• You can deposit the desired amount in cash, check, demand draft, or online transfers.

Benefits of Sukanya Samriddhi Yojana

The Sukanya Samriddhi Yojana benefits are discussed below:

Higher returns

Compared to other instruments aimed at the financial security of your daughter, SSY offers a higher rate of interest. Moreover, the interest is compounded annually on the lowest balance between the fifth and last day of the month.

Therefore, with regular deposits and compounding interest, you can accumulate a sizeable corpus on maturity.

Assured maturity benefits

At the time of maturity, the entire accumulated corpus including interest earnings is paid to the girl. Therefore, she can become financially independent and empowered to allow her to make her own life decisions.

Continued interest earnings after maturity

The interest on the SSY account balance continues even after the scheme achieves maturity. The interest is compounded annually until the time the account holder (the girl child) closes the account.

Eligibility criteria for opening an SSY account

• The SSY account can be opened only by parents or legal guardians of the girl child.
• The girl child should be below 10 years at the time of opening the account and it is operational until she attains the age of 21 years.
• Annual deposits can be between INR 250 and INR 1.50 lakhs; no interest is paid on deposits exceeding INR 1.50 lakhs per annum.
• Only one account can be opened for one girl child.
• Every family is allowed to open an account only for two girl children.

What are the documents required to open an SSY account?

When you open an account, you have to fill out the application form with the accurate Sukanya Samriddhi Yojana details and submit the following documents.

• Birth certificate of the child in whose name the account has to be opened.
• Medical certificate if more than one girl child is born in the same pregnancy.
• Residential address and identity proof of the parents or guardian making the deposit.
• Any additional documents required by the bank or post office.

Tax benefits provided under Sukanya Samriddhi Yojana

To encourage parents to invest in the Sukanya Samriddhi Yojana scheme, the government provides the following tax benefits.

• Deposits up to INR 1.50 lakhs per year are exempt under section 80C of the Income Tax Act, 1961.
• Interest compounded annually is also exempt from income tax.
• Maturity or withdrawal proceeds are exempted from taxes.

The process to apply for an SSY account online

Presently, Sukanya Samriddhi Yojana online account opening facility is not available. To open an account, you need to visit the closest branch of an authorized bank or post office and fill the following application form.

After successfully opening the account by completing the application form and submitting the necessary documents, you can provide standing instructions to make Sukanya Samriddhi Yojana online payments to ensure you do not miss making the required deposits.

Banks where you can open an SSY account

What are the rules for premature withdrawal in the SSY account?

The Sukanya Yojana allows premature withdrawal based on the following rules.

If the girl gets married once she reaches the age of 18 years, an application one month before or three months after the marriage must be submitted along with her age proof.

If she becomes a non-citizen or an NRI, the account is deemed as closed and the change must be notified within one month from the change of status

Unfortunately, in case the girl child passes away, the guardian needs to submit the necessary proof to withdraw the available balance in the SSY account.

If the account has been operational for five years or more, and the post office or bank considers it difficult for the account to be continued, an application for premature closure is allowed.

SSY vs. Fixed Deposit (FD)

Frequently Asked Questions (FAQs)

Who can open an SSY scheme account?

Either parent or a legal guardian can open the account on behalf of the girl child aged 10 years and below.

Is the Sukanya Samriddhi Yojana scheme available for NRIs?

Presently, NRIs are not eligible for the SSY scheme.

What happens if the account holder passes away?

In case of the untimely demise of the account holder, the account is closed, and the accumulated amount is transferred to the parent or the legal guardian.

What are the implications if the depositor passes away?

If the guardian or the parent acting as the depositor on behalf of the girl child passes away, the account can be closed, and the amount is given to the girl or the family. Alternatively, the account can be continued by making the required deposits until its maturity and the balance continues to earn interest till the girl attains the age of 21 years.

Can a bank deposit account be converted to an SSY account?

This scheme is aimed to uplift the financial status of girls in the country and conversion of a bank deposit account to an SSY account is presently not allowed.

Are premature withdrawals allowed?

Partial withdrawal of up to 50% is allowed once the girl turns 18 years old. The amount can be utilized towards her higher education or wedding.

How many SSY accounts can you open for your daughter?

Only one account per girl child is allowed. If you have two daughters, you may open separate accounts in each of their names.

Where can you open an SSY account?

Sukanya Samriddhi account can be opened at any post office or a branch of an authorized public or private sector bank.

What happens if you do not make the minimum deposit into the SSY account?

If you fail to deposit the minimum amount of INR 250, the account is deactivated. However, you can revive the account by paying a penalty of INR 50.

Who is allowed to withdraw money from this account?

Only the girl in whose name the account is opened can make withdrawals. However, if she is less than 18 years, her parents or a legal guardian can withdraw the money.

How much can you deposit in the SSY account?

The minimum annual deposit is INR 250, and the maximum amount is capped at INR 1.50 lakhs.

What is the tenure of the Sukanya Samriddhi Yojana scheme?

The deposit period is 15 years during which you need to at least invest INR 250 per annum. The maturity period of these accounts is 21 years.

What are the tax benefits available?

The deposit amount of up to INR 1.50 lakhs per year is tax-exempt under section 80C of the Income Tax Act, 1961. Additionally, the interest earnings and maturity benefits are tax-exempt.