Sukanya Samridhhi Yojana (SSY) is a government-backed savings scheme in India that was introduced in 2015 by the Ministry of Finance as a part of the “Beti Bachao Beti Padhao” (Save Girl Child, Educate the Girl Child) campaign. Sukanya Samriddhi Yojana Scheme encourages parents to set aside funds for their daughter’s education and wedding expenses as it aims at the betterment of girl children in India.
Moreover, the SSY scheme is ideal as it offers attractive tax advantages and interest rates.
Features of the Sukanya Samriddhi Yojana Scheme
- Minimum Deposit: The minimum deposit to enter the Sukanya Samriddhi Yojana Post Office Scheme is INR 250 and after that multiples of INR 100.
- Maximum Deposit: The maximum limit for deposits in the account is INR 1,50,000 per year.
- Mode of Deposit: Cash, cheque, demand draft, or online transfer of money are various deposit modes available.
- Account Operation: Guardians can operate the account till the girl child reaches the age of 18 years. However, after the girl child attains the age of 18 years, she has to operate the SSY account as a mandate.
- Duration of SSY: The guardians can open the SSY account anytime before the girl child turns 10. The maturity period is 21 years from opening the account or upon her marriage after 18 years of age. However, guardians can deposit the amount only for a period of 15 years and the account shall earn interest till maturity regardless of any additional deposits after 15 years.
- Tax Benefits: Investments are exempt from income tax under section 80C of the Income Tax Act
- If the minimum deposit per financial year is not done, the SSY account will be deactivated. However, it can be revived with a penalty of INR 50 per year along with the minimum amount required for a deposit for that year.
Sukanya Samriddhi Yojana Eligibility
The Sukanya Samridhhi Yojana Scheme eligibility criteria are as below:
- The parents or legal guardians can open the account in the name of the girl child anytime before she attains the age of 10 years
- The girl child has to be a resident Indian
- A family can open up to 2 accounts for two girls. However, in the case of twin girl children or triplets, more than 2 accounts can be opened. But a family can open a maximum of 3 accounts only.
Note: One cannot open multiple Sukanya Samriddhi accounts for the same girl child.
Sukanya Samriddhi Yojana Interest Rate
Sukanya Samriddhi Yojana Interest Rate for Q4 of FY 2023-24 is 8.2% p.a. compounded annually. Previously the interest rate was 7.6% p.a. The interest amount along with the principal amount is paid on the maturity of the SSY account.
The government revises the Sukanya Samriddhi Yojana Interest Rate quarterly.
Sukanya Samriddhi Yojana Tax Benefits
The Sukanya Samridhhi Yojana tax benefits are as below:
The investments made under Sukanya Samriddhi Yojana fall under the EEE (Exempt, Exempt, Exempt) Category.
- This means that contribution up to INR 1.5 lakh is deductible under Section 80C, and
- The interest amount as well as the maturity amount or the withdrawal amount is exempt from tax.
How to open an Account for Sukanya Samriddhi Yojana?
An account can be opened at any of the authorized banks or any post office. The form to open an account is available at all eligible bank branches and post office branches. The guardian can fill out the form and submit the same along with the necessary documents and the deposit fee. SSY accounts become active after the verification process.
Documents required to open Sukanya Samriddhi Account:
- Account Opening Form
- Birth Certificate of Girl Child
- Identity Proof for both Girl Child and parent or Legal Guardian
- Address Proof of depositor
SSY Withdrawal Rules
The following scenarios permit withdrawal:
- Marriage Expenses
- Higher education of a girl child is subject to the condition that she has completed her Xth Grade.
In both cases, the girl child should have attained the age of 18 years.
The account holder can withdraw a maximum of 50% of the account balance in the previous year. Moreover, there are alternatives to withdraw money in a lumpsum manner or 5 instalments as per the requirement.
SSY Closure Rules
Closure on Maturity
The maturity period is when the girl child turns 21 years old or upon her marriage after 18 years. Hence, upon maturity, in exchange for submission of an application along with proof of identity, and citizenship documents, the girl child receives the account balance including the interest amount.
The following scenarios permit pre-mature closure:
- Death of the girl child: In case of an unfortunate event like the death of the girl child, the guardians can receive the account balance along with interest upon producing the death certificate.
- Medical treatment: If a girl child develops a life-threatening illness the amount can be withdrawn for medical expenses.
- Marriage: In case of marriage of the girl child on turning 18 years, a premature closure request can be submitted one month before the marriage or within three months of marriage by submitting the age proof and other relevant documents.
- Death of the Guardian: If the guardian passes away, the girl child can withdraw the amount or can continue the account without depositing any money, she will receive the investment along with interest upon maturity.
- Change of citizenship or residential status: If the girl becomes an NRI, the account shall be deemed closed and a request can be submitted to the relevant place where the account is held for the withdrawal of the funds.
Transfer of SSY Account
One of the major benefits of SSY is the ease of convenience. The of the SSY account from one part of the country to another can be done without any hassle. The only requirement is to fill up the form for transfer of the account and submit it to the concerned post office or bank.
The Sukanya Samriddhi account will turn inactive in case the requirement of the minimum annual deposit of INR 250 is not met. However, to revive the account a penalty of INR 50 along with the minimum deposit amount is to be paid.
The amount deposited in the Sukanya Samriddhi account should not exceed INR 1.5 lakhs per year. However, the total number of deposits made doesn’t matter either in a month or a financial year.
No, currently availing of a loan against the SSY balance is not allowed.
In case of unforeseen death of the depositor, the account is either closed and the accumulated amount is given to the family or girl child. Or, the account is kept running till the maturity period and the deposited amount continues to earn interest till the girl child attains the age of 21 years.
No, the SSY scheme falls under the EEE (Exempt, Exempt, Exempt) category. Hence, the maturity amount (inclusive of interest) is exempt from tax.
Currently, there are no provisions to apply for Sukanya Samriddhi Account online. Hence, the guardian can visit the Post Office or your bank branch and submit the application to open an SSY account.