Sukanya Samriddhi Yojana (SSY) is a savings scheme launched by the Indian government in 2015 as a part of the “Beti Bachao, Beti Padhao” campaign. It is a long-term investment plan designed to encourage parents to save for their girl child’s education and marriage expenses.
Under this scheme, parents or guardians can open an account in the name of their girl child who is under the age of 10 years. The account can be opened at designated banks and post offices across India with a minimum deposit of Rs. 250 and a maximum deposit of Rs. 1.5 lakh per financial year. The account has a maturity period of 21 years from the date of opening, and the interest rate is fixed by the government and revised every quarter.
The SSY scheme offers tax benefits to the account holder under Section 80C of the Income Tax Act, 1961. The interest earned and the maturity amount are also tax-free. The scheme has a lock-in period of 15 years, and partial withdrawals are allowed only after the girl child reaches the age of 18 years.
The scheme is aimed at empowering the girl child and ensuring their education and financial security. It is a popular investment option among parents and guardians who want to secure their girl child’s future.
Let’s get into the details of the scheme and how you can invest the scheme;
Eligibility criteria for Sukanya Samriddhi Yojana
The eligibility criteria for the Sukanya Samriddhi Yojana (SSY) scheme are as follows:
- Age of the Girl Child: The scheme can be availed for a girl child who is under the age of 10 years at the time of account opening.
- Citizenship: The scheme is available to resident Indian citizens only. Non-Resident Indians (NRIs) are not eligible for the scheme.
- Number of Accounts: The scheme can be availed for a maximum of two girl children in a family. In case of twins or triplets, the scheme can be availed for all the girl children.
- Mode of Operation: The account can be opened and operated by the parent or legal guardian of the girl child.
It is important to note that the scheme is specifically designed to promote the education and financial security of the girl child. Therefore, only parents or guardians of a girl child can open and operate an SSY account for their daughter.
Additionally, the scheme is not available for boys or for a girl child who has crossed the age of 10 years at the time of account opening.
Withdrawal criteria for Sukanya Samriddhi Yojana
The Sukanya Samriddhi Yojana (SSY) scheme has certain withdrawal criteria that one needs to keep in mind:
- Partial Withdrawal: Partial withdrawal from the SSY account is allowed after the girl child attains the age of 18 years, but only for the purpose of her higher education or marriage expenses. The withdrawal amount cannot exceed 50% of the account balance at the end of the preceding financial year.
- Complete Withdrawal: The account matures after 21 years from the date of opening. On maturity, the entire amount including the interest is paid to the account holder (girl child).
- Premature Closure: Premature closure of the SSY account is allowed in certain circumstances, such as the death of the account holder (girl child) or if the account holder has been diagnosed with a life-threatening disease. In such cases, the account can be closed without any penalty.
- Penalty for Early Withdrawal: If the account is closed before the maturity period of 21 years, a penalty of Rs. 50 will be charged, and the interest rate applicable will be equivalent to the post office savings account.
It is important to note that withdrawals from the SSY account can only be made by the account holder (girl child) after she attains the age of 18 years. Additionally, withdrawals can only be made for the purpose of higher education or marriage expenses, and proper documentation needs to be submitted for the same.
Benefits or feature of the SSY scheme
There are main benefits or features of the Sukanya Samriddhi Yojana (SSY) scheme, including:
- High Interest Rates: The interest rate for the SSY scheme is fixed by the government and is higher than most other savings schemes in India. The central government has increased SSY interest rate from 7.60 per cent to 8 per cent. However, this SSY interest rate is changeable on quarterly basis but one can expect to get around 7.60 to 8 per cent return if someone begins investing in Sukanya Samriddhi Yojana account after the birth of its girl child.
- Tax Benefits: The SSY scheme offers tax benefits under Section 80C of the Income Tax Act, 1961. The contributions made towards the scheme are eligible for tax deductions up to Rs. 1.5 lakh per financial year. The interest earned and the maturity amount are also tax-free.
- Long-term Investment: The SSY scheme has a long-term maturity period of 21 years, which makes it an ideal investment option for parents or guardians looking to save for their girl child’s education and marriage expenses.
- Affordable Minimum Deposit: The SSY scheme can be opened with a minimum deposit of Rs. 250, which makes it an affordable investment option for parents or guardians.
- Flexible Deposit Options: The SSY scheme allows parents or guardians to make deposits in the account as per their convenience, with a maximum deposit limit of Rs. 1.5 lakh per financial year.
- Empowers the Girl Child: The SSY scheme is specifically designed to empower the girl child by providing financial security for their education and marriage expenses. This scheme encourages parents to invest in their girl child’s future, thereby promoting gender equality and female education.
How can one avail Sukanya Samriddhi Yojana?
To avail the Sukanya Samriddhi Yojana (SSY) scheme, one can follow these steps:
- Find a Bank or Post Office: The SSY scheme can be opened at designated banks and post offices across India. One can find the nearest bank or post office that offers this scheme.
- Gather Required Documents: The following documents are required to open an SSY account:
1.Birth certificate of the girl child
2. Identity proof of the parent or guardian (PAN card, Aadhaar card, voter ID card, passport, etc.)
3. Address proof of the parent or guardian (Aadhaar card, voter ID card, passport, etc.)
- Fill in the Application Form: The SSY account opening application form is available at the bank or post office. Fill in the form with accurate details and attach the required documents.
- Make the First Deposit: The minimum deposit to open an SSY account is Rs. 250. The deposit can be made in cash or cheque.
- Keep the Account Active: To keep the account active, a minimum deposit of Rs. 250 per year is required. The maximum deposit limit per year is Rs. 1.5 lakh.
- Track the Account: One can track the SSY account online or by visiting the bank or post office.
The scheme can only be opened for a girl child who is under 10 years of age but the account can be operated by the parent or legal guardian of the girl child until she reaches the age of 18 years. After the girl child turns 18, she can operate the account on her own.
Know more about the SSY scheme, how the interest in calculated in the scheme, tax benefit of the scheme, past interest rates of the scheme and more here.
Sukanya Samriddhi Yojana vs. Fixed deposits
One of the most commonly asked question is how does this scheme compare to the good old FD? Is the scheme better than traditional FD for the same tenure?
Find the detail comparison between the two here.
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