The Sukanya Samriddhi Yojana is an exclusive savings account designed to provide girl children a bright and happy future, free from financial troubles. Launched as part of the "Beti Bachao Beti Padhao" initiative, this scheme offers high-interest rates and various tax benefits.
In this guide, we take a closer look at this scheme – features, interest rates, eligibility, points to watch out for, how to invest, and more.
What is the Sukanya Samriddhi Yojana?
The Sukanya Samriddhi Yojana (SSY) is a small-deposit savings scheme offered exclusively for the parents of girl children. The plan provides a high interest-earning rate, around 8.1%, and offers various tax benefits. The amount invested in this scheme is exempted from income tax calculations under Section 80C of the ITA. Additionally, the returns generated from the plan are also tax-free.
This is an exclusive scheme for girl children who are Indian residents.
The account can be opened any time from the birth of the child till the time she turns 10.
The account can only be opened and operated by the natural guardian (parents) or legal guardian of a girl child below ten years.
As per the scheme rules, the depositor can only operate one account in the name of the girl child.
The parents/guardian of a girl child can only open a maximum of two accounts for two different girl children.
Deposits made in the scheme earn an attractive interest rate ranging from 7.6% to 8.1% depending on market conditions.
The deposits made are tax-exempted under Section 80C of the ITA.
The minimum investment that has to be deposited in a fiscal year is Rs. 250. Earlier, the minimum annual investment was set at Rs. 1000.
The maximum investment that can be made in a financial year is Rs. 1,50,000.
If the minimum amount is not deposited in a particular year, then a penalty of Rs. 50 will be charged.
Period of Operation – The account is kept in operation for 14 years, from the date of opening the account.
Maturity Period – The account matures after 21 years from the opening date or the marriage of the girl child, whichever happens first.
The SSY account is not allowed to be kept active after the marriage of the girl child.
All account holders are issued a special passbook to list the transactions made in the account.
Rules of Withdrawal
Partial withdrawal of 50% of the account balance is permitted after the girl attains 18 years of age. Note that partial withdrawals are only allowed for higher education.
If the girl child is married before the account maturity, the account is terminated, and the entire amount is available for withdrawal.
Depositing Money in a Sukanya Samriddhi Account
Deposits can be made in the form of cash/cheque/DD at the post-office where the account is held. If the account is held at your bank, you can also invest in the SSY account directly from your savings bank account, via online transfers.
Deposits must be made every year for fifteen years since the date of the account opening. Let's say that you open the account when your child turns 5. Then, you have to deposit every year until she reaches the age of 20.
The account matures 21 years after opening. In this case, the account matures when your child turns 26. From the time she turns 20, to the time the account matures (at her 26th year), the amount accumulated in the account continues to earn interest.
Interest Rates of the Sukanya Samriddhi Yojana
The interest rate of the SSY account is fixed by the government, based on quarterly G-sec yields. The interest rates since the launch of the scheme are as follows:
|1st April 2014 to 31st March 2015||9.10%|
|1st April 2015 to 31st March 2016||9.20%|
|1st April 2016 to 30th June 2016||8.60%|
|1st July 2016 to 30th Sep 2016||8.60%|
|1st Oct 2016 to 31st Dec 2016||8.50%|
|1st Jan 2017 to 31st Dec 2017||8.30%|
|1st Jan 2018 to 30th Sep 2018||8.10%|
|1st Oct 2018 to 31st Dec 2018||8.50%|
|1st Jan 2019 to 30th June 2019||8.50%|
|1st July 2019 to 31st Dec 2019||8.40%|
|1st Jan 2020 to 31st March 2020||8.40%|
|1st April 2020 to 30th June 2020||7.60%|
Points to Watch Out For Before Investing in the Sukanya Samriddhi Yojana
SSY is a long-term saving scheme (21 years). You can withdraw partially only after the girl child turns 18. Irrespective of the age of your child, the account matures only after 21 years of opening the account. So, if your child is nine years old, you can only receive the maturity amount after she turns 30.
So, if you're looking for a flexible investment scheme that allows you to withdraw whenever you need cash, the SSY is not the best choice.
How to open a Sukanya Samriddhi savings account?
Opening the SSY account is quite easy and hassle-free. You can open it at any post-office near you or at a bank that offers this scheme.
At a post-office – Request the postmaster for the application form. Fill in the details and submit the required documentation. Pay the initial deposit, and you will be provided with the passbook.
At a bank – Certain banks like SBI, HDFC offer the SSY scheme for parents of girl children. You can either open the account online from your internet banking account or visit your branch for the same. Submit/upload the required documents and pay the initial deposit and you’re done.
FAQs on Sukanya Samriddhi Yojana
Where to open the Sukanya Samriddhi account?
The SSY account can be opened at any post-office in India. Besides post-offices, certain commercial banks like HDFC, SBI, and others also offer this account to eligible customers.
What are the documents required for opening the SSY account?
The account can be opened only by the parent(s)/legal guardian of a girl child. The account is opened in the name of the girl child. During account creation, the parent has to provide the following documents:
Copy of the birth certificate of the girl child
Identity proof of the parent – passport, driving license, Aadhaar card, etc.
Address proof of the parent – passport, driving license, EB bill, water bill, telephone bill, etc.
Can both the mother and father open a separate account in the name of their daughter?
No. Only one account can be opened for each girl child.
How much money can be deposited in the account every year?
The minimum amount that can be deposited in a fiscal year is Rs. 250.
The maximum amount that can be invested in a fiscal year is Rs. 1.5 lakhs.
What happens if I miss depositing the minimum amount in a year?
Accounts, where the minimum balance is not deposited in a year, are treated as irregular accounts. You can regularise an irregular account by paying the penalty fee of Rs. 50 for every missed year, along with the minimum deposit for each missed year.
What happens if I don’t pay the penalty?
In this case, the amount deposited in the account receives regular post-office savings bank interest, which is currently valued at 4% per annum. If excess interest has been paid in the account, it will be reversed.
Can the account be closed prematurely?
Generally, No. However, if the account holder meets an unexpected death, the account is terminated immediately on producing the death certificate. The balance accumulated in the account, along with interest, is paid to the parent/legal guardian.
Can I make partial withdrawals before the girl turns 18?
Only in specific cases. Partial withdrawals are permitted for medical emergencies only after five years of opening the account. You need to provide a request at the post office or bank where the account is held, for partial withdrawals.
What are the rules of partial withdrawal at the age of 18?
Partial withdrawals up to 50% of the amount held in the account are permitted when the girl turns 18, for higher education expenses. For this, you have to provide the following:
A written withdrawal request
Proof of admission in a higher education institute
Note that the partial withdrawal amount is determined based on the actual admission fees, etc.
What is mentioned in the passbook?
The passbook contains the name of the account holder (the girl child), date of account opening, the account holder's address, and the account number on the front page.
You can also find details of the amount deposited in the account and the interest earned mentioned in the inner pages.
Can I transfer the SSY account from one post-office to another?
Yes. The account can be transferred anywhere in India. The transfer is free of cost if you provide documentation supporting the relocation address. If you don’t have any such documentation, you can pay Rs. 100 to the new post-office to transfer the account there.
When will the account mature?
The account matures 21 years from the date of opening or when the girl child gets married, whichever is earlier.
Can I open an SSY account in the name of an NRI girl child?
No. The Sukanya Samriddhi Yojana savings scheme is only for girl children who are Indian residents.
What are the tax benefits of the Sukanya Samriddhi Yojana?
All deposits made in the account are tax-exempted under Section 80C of the ITA. Also, the maturity returns are tax exempted.
How can I receive the account proceeds on maturity?
The amount accumulated in the account along with interest is paid on maturity on furnishing the passbook.
SSY is an Attractive Investment to add to your Portfolio
If you are the parent of a girl child, then the SSY presents an attractive investment option with several benefits: high-interest rates, tax exemptions, and more. However, the long-duration of the scheme is a deterrent for many. So, make sure to consider your child's future requirements and invest wisely.