Sukanya Samriddhi Yojana (SSY): How to Apply, Benefits, Eligibility, Interest Rates, and More – Complete Guide!

What is Sukanya Samriddhi Yojana (SSY)?

Sukanya Samriddhi Yojana (SSY) is launched by the Government of India. It is a savings and investment scheme specifically designed to secure the future of girl children. This scheme was introduced as part of the broader “Beti Bachao Beti Padhao.” 

SSY offers a unique combination of financial security, long-term savings, and tax benefits. The parents or guardians who wish to create a substantial corpus for their daughter’s education and marriage expenses.

Sukanya Samriddhi Yojana: Key Features

Minimum and Maximum Deposit: To open an SSY account, an initial deposit of just ₹250 is needed. Subsequently, you can make additional deposits in multiples of ₹100, with a maximum annual deposit limit of ₹1.5 lakh per fiscal year.

Account Opening Age Limit: Parents or guardians can open an SSY account. They can open in the name of a girl child until she reaches the age of 10.

Number of Accounts: Only one SSY account is allowed per girl child. In special circumstances, such as the birth of twins or triplets, a third account may be opened for the same parent or legal guardian.

Account Opening Locations: SSY accounts can be opened in any post office or authorized bank branches across India.

Purpose of Withdrawal: One of the distinguishing features of SSY is that it allows withdrawals for the girl child’s higher education. Withdrawals can be made when the account holder reaches 18 years of age or after she has completed the 10th standard, whichever is earlier. This provision makes SSY a unique tool for funding quality education.

Premature Closure: An SSY account can be closed prematurely under certain circumstances, such as when the girl child gets married after turning 18.

Nationwide Account Transfer: SSY accounts are transferable from one location to another within India, providing flexibility to families that may relocate.

Maturity Period: The SSY account matures after 21 years from the date of opening, which means the account reaches full maturity when the girl child turns 21. At this point, the funds can be withdrawn, and the account ceases to earn interest.

Tax Benefits: SSY offers several tax benefits, including deductions under Section 80C of the Income Tax Act. The interest earned on the deposited amount is also tax-exempt under Section 10. Additionally, the maturity amount is exempt from income tax.

Interest Rates and Calculations

sukanya samriddhi yojana
National Savings Institute

The interest rate for SSY is revised periodically by the government. As of the 2nd quarter of FY 2023-2024, the SSY interest rate stands at 8% per annum. The interest is compounded annually and calculated on the lowest monthly balance in the account. Click here for more details on the official site.

Benefits of Sukanya Samriddhi Yojana

Affordable Payments: With a minimum deposit requirement of ₹250 per fiscal year, SSY is accessible to families from all income groups, encouraging more significant participation in securing their daughter’s future.

Educational Expenses Covered: The unique provision for withdrawals for the girl child’s higher education is a significant benefit. This flexibility ensures that parents have the financial means to provide quality education to their daughters, empowering them for a brighter future.

Attractive Interest Rates: The SSY scheme offers a high and competitive interest rate of 8% per annum, making it an attractive investment option for long-term goals.

Guaranteed Returns: Being a government-backed scheme, SSY ensures reliable returns upon maturity. This makes it a secure and dependable investment avenue for parents and guardians.

Convenient Transfer: SSY accounts can be easily transferred between post offices and banks across India. This feature allows parents and guardians to manage their investments flexibly, even in case of relocation.

Sukanya Samriddhi Yojana Tax Benefits

SSY provides substantial tax benefits to investors:

Deductions under Section 80C: Deposits made to an SSY account qualify for deductions under Section 80C of the Income Tax Act. It allows for deductions of up to ₹1.5 lakh from the investor’s total taxable income.

Tax-Exempt Interest: The interest earned on the SSY account is completely tax-free. It is under Section 10 of the Income Tax Act.

Maturity Proceeds Exempt from Income Tax: The maturity amount of the SSY account, which is payable to the girl child upon reaching 21 years, is also exempt from income tax. This ensures that the accumulated corpus remains entirely tax-free.

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Sukanya Samriddhi Yojana Interest Rate 2023

As of the 2nd quarter of FY 2023-2024, the SSY interest rate stands at 8% per annum. This competitive interest rate is reviewed and updated by the government periodically.

Eligibility for Sukanya Samriddhi Yojana

The eligibility criteria for opening an SSY account are as follows:

Parents or Legal Guardians: Only parents or legal guardians can open an SSY account in the name of a girl child. The child should be their biological child or adopted child.

Girl Child’s Age: The girl child must be a resident Indian and under 10 years of age at the time of opening the SSY account.

Number of Accounts per Family: In most cases, only one SSY account is allowed per girl child. However, in special situations like the birth of twins or triplets, a third account can be opened for the same parent or legal guardian.

How to Open a Sukanya Samriddhi Yojana Account

sukanya samriddhi yojana

Opening an SSY account is a straightforward process:

At a Post Office:

You can visit your nearest post office and request the SSY account opening form. Fill out the form with the required details. Then, attach the necessary documents. Finally, make the initial deposit. The post office will provide you with a passbook to keep track of your account.

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Through Banks:

Authorized banks also offer SSY account services. Visit the bank branch where you wish to open the account. Then, complete the application form. Provide the necessary documents, and make the initial deposit. The bank will issue a passbook for your SSY account.

Documents Required for Sukanya Samriddhi Yojana

When opening an SSY account, you will need to provide the following documents:

Girl Child’s Birth Certificate: This is required as proof of the child’s age and identity.

Guardian’s Identity and Address Proof: The guardian opening the account must provide their identity and address proof, typically through documents like Aadhar card, passport, voter ID, or driver’s license.

Any Other Required KYC Documents: Depending on the financial institution and their specific requirements, additional Know Your Customer (KYC) documents may be requested.

Scheme forms can be found here

Online Payments for Sukanya Samriddhi Yojana

You can make online payments for your SSY account using the India Post Payments Bank (IPPB) app. The IPPB app allows you to set up standing instructions for recurring payments, making it convenient to ensure regular deposits into the SSY account.

Sukanya Samriddhi Yojana Withdrawal Rules

SSY allows withdrawals for specific purposes, such as the girl child’s higher education expenses. Here are some withdrawal rules:

  • You can withdraw funds when the account holder turns 18 years old or after she has completed 10th standard, whichever is earlier.
  • The withdrawal amount is restricted to a maximum of 50% of the balance standing at the end of the preceding financial year.
  • Withdrawals for the girl child’s marriage can be made after she turns 18 or when she gets married, whichever is earlier. The maximum withdrawal limit is the balance at the end of the preceding financial year.

Sukanya Samriddhi Yojana Closure Rules

An SSY account typically matures after 21 years from the date of opening, at which point the account ceases to earn interest. Here are some key closure rules:

  • Premature closure is allowed in case of the girl child’s marriage once she reaches the age of 18.
  • In the unfortunate event of the guardian’s death, the account can be closed prematurely. The account balance will be paid out, and no further interest will be accrued.

How to Transfer an SSY Account

Transferring an SSY account is a straightforward process, ensuring that your investments remain accessible even if you relocate. Here’s how you can transfer an SSY account:

  • For transferring an SSY account between post offices or from a post office to a bank. Visit the post office or bank where you hold the existing account and request the transfer.
  • Provide proof of the change of residence to the respective institution.
  • The existing SSY account’s balance, including interest, will be transferred to the new location.
  • This transfer facility ensures that your SSY account remains accessible and well-managed, irrespective of your changing location.

Comparing Sukanya Samriddhi Yojana with Other Schemes

To make an informed decision about investing in SSY, you can compare it with other popular investment and savings schemes:

Sukanya Samriddhi Yojana vs. Public Provident Fund (PPF): Both SSY and PPF offer tax benefits under Section 80C of the Income Tax Act. However, SSY is exclusively designed for girl children and has a longer maturity period (21 years). PPF, on the other hand, has a maturity period of 15 years, making SSY a preferred choice for long-term savings for a girl child’s future.

Sukanya Samriddhi Yojana vs. LIC Kanyadan: SSY allows access to funds for the girl child’s higher education and marriage. In contrast, LIC Kanyadan is a life insurance policy specifically designed for a father’s daughter, providing financial protection in case of the father’s absence or unfortunate events.

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Conclusion

Sukanya Samriddhi Yojana is a powerful and government-backed savings and investment scheme. It empowers parents and guardians to secure their daughter’s future financially. It has a strong focus on education and marriage expenses. This scheme offers several advantages, including tax benefits, competitive interest rates, and the flexibility to manage investments conveniently. 

Frequently Asked Questions (FAQs) about Sukanya Samriddhi Yojana

Can NRIs (Non-Resident Indians) open a Sukanya Samriddhi Yojana account for their daughters?

No, NRIs are not eligible to open SSY accounts. This scheme is exclusively for resident Indians.

Is there a penalty for missing the annual deposit in an SSY account?

Yes, there is a penalty for not making the minimum annual deposit (₹250) in an SSY account. The penalty amount is ₹50 per year of default.

Can I open an SSY account for my adopted daughter?

Yes, you can open an SSY account for your adopted daughter, provided she is under 10 years of age at the time of account opening.

What is the penalty for premature closure of an SSY account for reasons other than the girl child’s marriage?

If you choose to close the SSY account prematurely for reasons other than the girl child’s marriage, you will incur a penalty of ₹50, and the account will cease to earn interest.

Can the SSY account be extended beyond the 21-year maturity period?

No, the SSY account cannot be extended beyond the 21-year maturity period. After maturity, it ceases to earn interest.

Is it possible to transfer an SSY account from a bank to a post office or vice versa?

Yes, you can transfer an SSY account from a bank to a post office or from a post office to a bank branch. This transfer can be initiated by submitting a transfer request to the respective institution.

Is the interest rate for SSY accounts the same across all banks and post offices?

No, the interest rate for SSY accounts may vary slightly between banks and post offices. The rates are set by the government and are subject to change on a quarterly basis.

Can a girl child have more than one SSY account in her name?

In most cases, only one SSY account is allowed per girl child. However, if there are exceptional circumstances, such as the birth of twins or triplets, a third account can be opened for the same parent or legal guardian.

Is the SSY account a joint account between the girl child and the guardian/parent?

No, the SSY account is solely in the name of the girl child, with the parent or guardian acting as the depositor and manager of the account.

What happens if the guardian who opened the SSY account passes away?

In the unfortunate event of the guardian’s death, the SSY account can be continued with another legal guardian, and the account balance will be transferred accordingly.

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