A Comprehensive Guide to Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana or SSY is an investment option that parents of a girl child can avail to earn guaranteed returns for a girl's future education and marriage. This government-backed scheme can be availed through leading banks in India or the India Post Office. The current interest rate offered for Sukanya Sammriddhi Yojana account is 8.2% p.a. which is applicable till March 2024 and is reviewed quarterly.

Apart from offering one of the highest interest rates among small savings scheme, SSY investments also qualify for EEE (exempt-exempt-exempt) status. So, the principal amount invested, interest earned and maturity amount are all tax-free.

With a minimum contribution of ₹250, a Sukanya Samriddhi Account can be started at any time after a girl child is born but before she is 10 years old. Currently, Sukanya Samriddhi Yojana (SSY) account can be opened at any India Post office or at leading banks across India. The primary account holder of the SSY account will be the girl child’s parent or guardian with the minor girl child as the joint holder. Under current rules, only a single SSY account is allowed per girl child. Additionally, parents can open a maximum of 2 SSY accounts for 2 girl children.

As per Section 80C of the Income Tax Act of 1961, the parent making SSY investment can avail tax deduction benefit of up to ₹1.5 lakh in a financial year. The maximum investment allowed annually in a Sukanya Samriddhi Yojana Account is ₹1.5 lakh either as a lump sum investment or through multiple transactions.

The SSY account matures and can be closed either when the girl child attains the age of 21 years or marries after she is 18 years old. Sukanya Samriddhi Yojana account also allows partial withdrawal of up to 50% of the account balance to cover the cost of a girl child's higher education after passing 10th standard or attaining the age of 18 years.

Here are some key features of a Sukanya Samriddhi Account that you need to keep in mind before opening one for a girl child:

As SSY is a government-backed scheme, the interest rate of Sukanya Samriddhi investments is decided by the Ministry of Finance, Government of India. The applicable interest rate for Sukanya Samriddhi Deposits is liable to be revised every quarter just like PPF interest rates and other government-backed scheme rates. The current interest rate for Sukanya Samriddhi Yojana is 8.2% p.a. which is applicable till March 2024.

Below table shows the historic interest rates of Sukanya Samriddhi Yojana (SSY):

Here is a list of the required documentation that must be provided while opening a Sukanya Samriddhi Account for a girl child:

• The completely filled out account opening form for the Sukanya Samriddhi Account.
• The girl child's birth certificate / Baal Aadhaar.
• The parent/guardian of girl child must provide copies of Govt. Issued ID proof and applicable address proof.
• PAN card of parent/guardian opening the account on behalf of girl child
• Passport-size photograph of parent/primary caregiver opening Sukanya Samriddhi Account on behalf of girl child

Apart from the above documents, the bank or post office may require submission of additional documents like salary slip of parent/guardian of girl child on a case to case basis.

• The eligibility criteria for Sukanya Samriddhi Account are as follows:
• SSY Account opening is allowed from the date of birth of girl child till she turns 10 years old.
• A girl child is allowed only one Sukanya Samriddhi Yojana account.
• A limitation of 2 girl children may have accounts opened by the legal or natural caregiver.
• Upon presentation of a certificate from qualified medical officials, a third account may only be formed in the case of twin girls in second birth or three girl children from a single birth.
• The parent opening the SSY account on behalf of the girl child must be an Indian citizen and an Indian resident at the time of account opening.

To open an account under the Sukanya Samriddhi Yojana, here are the steps that need to be followed:

Here are some major benefits of the Sukanya Samriddhi Yojana account:

• You can open an SSY account with a deposit as small as ₹250. The maximum deposit allowed for a financial year is up to ₹1.5 lakh
• The deposit tenure is for a period of 15 years. While contributions can be made even after completion of this 15-year period, it is not mandatory
• The rate of interest is quite attractive and currently stands at 7.6% p.a. (till Q3 2022) and the interest is compounded annually.
• You can make a premature withdrawal under certain special or in the case of specific emergency circumstances.
• This account helps you save money for your girl child's future education and marriage requirements.
• Sukanya Samriddhi Yojana account qualifies for EEE (Exempt Exempt Exempt) tax benefit. So investments made, interest earned and maturity amount are all tax-free.

A Sukanya Samriddhi account could become a default account if the required contribution is not made within a fiscal year. By making the requisite payment of ₹250 plus a fine of ₹50 for every year of failure, the account may be reactivated prior to the expiry of the 15-year tenure. The whole deposit, as well as those made before the date of default, will accrue a rate of interest as per the post office savings account if the fine is unpaid.