Table of Content
What is the Sukanya Samriddhi Yojana (SSY)?
Sukanya Samriddhi Yojana (SSY) is a small saving scheme of the Government of India intended solely for a girl child. The scheme is proposed to meet the education and marriage expenses of a girl child.
On 22 January 2015, the Sukanya Samriddhi Yojana scheme was launched by Prime Minister Shri Narendra Modi, As a part of the Government initiative Beti Bachao, Beti Padhao campaign. Sukanya Samriddhi Yojana scheme currently gives an interest rate of 7.6% (for the Apr-July 2020 quarter). The Government renewed the contract by making the Sukanya Samriddhi Account section of the Exempt-Exempt-Exempt (EEE) tax regime.
Sukanya Samriddhi Yojana Eligibility
The following are the eligibility guidelines for opening an SSY Account.
- Who can open a Sukanya Samriddhi account?
Parents or legal guardians of a girl can open the account.
- How many girls can be covered from one family?
- In the name of one girl child, only one account can be opened.
- For a single girl child, multiple Sukanya Samridhhi accounts cannot be opened.
- Just two SSY accounts are allowed for a family that is one for each girl child.
- The important thing is to make sure that the age of the child has to be below 10 years.
- Some minor amendments offered to the Sukanya Samriddhi Scheme rules.
The amended rules build upon the original rules and provide better transparency in many areas including deposits, withdrawals, and closure rules. We will discuss such changes here.
- The SSY account can be opened and served only in the name of a Resident girl child .
- Deposit Rules
Deposits to the account can now be given till the completion of 15 years (earlier 14 years) from the date of opening the account.
- Credit of Interest
The interest shall be calculated on the lowest balance between the 10th and the last day of the month. So essentially, you should deposit on or before the 10th of every month to maximize returns. Won’t impact returns too much though.
- Partial Withdrawal
You can withdraw up to 50% of the account balance at the end of the previous financial year for the higher education of the beneficiary (girl).
- Closure on Maturity
The Account matures on completion 21 years from the date of opening the SSY account. No interest shall be due once the Account completes 21 years. In the old rules, there was not much transparency. Therefore, your daughter needs to withdraw money from the account once the account completes 21 years.
- Personal Finance Plan Take
The new rules provide much accuracy and also have a more practical approach to the needs of a girl child.
Sukanya Samriddhi Yojana Scheme Details
- Where can it be open?
To open the account, you have to fill the Sukanya Samriddhi Account opening form and submit it to any one of the authorized bank branches or a post office.
- Minimum deposit in Sukanya Samriddhi account.
A minimum deposit of ₹ 250 is needed every year. Earlier it was Rs 1,000 per annum.
- Maximum Deposit in Sukanya Samriddhi account.
The maximum amount deposited in a year is ₹ 1.5 lakh per Sukanya Samriddhi account. There is no limit to the number of deposits either in a financial year or in a month.
- What happens in case the minimum amount is not deposited?
If an SSY account holder is incapable of making even the minimum deposit of Rs.250 in a financial year, his/her account will be termed as a ‘Default Account’. Till the maturity date, this default account will get the interest rate as applicable in the scheme.
- What is the maturity period of a Sukanya Sammriddhi Yojna (SSY) account?
The maturity period of Sukanya Sammriddhi Yojna account is 21 years. But, you only have to get deposits for 14 years. The deposited corpus will make an interest between the 14th and 21st year.
Note that an SSY account will be stopped once a girl reaches 21 years of age or gets married, whichever is earlier.
- What if the insured person/account holder passes away?
In the event of the death of the account holder, the account will be closed immediately on the production of a death certificate. The balance in the account will be given, with the interest till the month preceding the month of the premature end of the account, to the guardian of the account holder.
- Can it be closed before maturity?
- Sukanya Samriddhi Account has a compulsory lock-in period of 21 years from the date of opening of the account and the account has to be stopped in case the account holder marries before 21 years of age. The collected corpus in the Sukanya Samriddhi Account can be withdrawn only after the end of the lock-in period of 21 years.
- Though, the administration provides for the premature withdrawal and closing of the Sukanya Samriddhi Account. Sukanya Samriddhi Account can be closed prematurely based on marriage, change of status such as change of citizenship and country of residence, only after maintaining deposits for 5 years.
- Sukanya Samriddhi Account can be prematurely terminated in case the account is generating financial load on the girl child or there is an important medical term or in instances of death of a parent or guardian.
- The partial withdrawal facility on the Sukanya Samriddhi Account can be availed only for specific purposes such as higher education and marriage of the girl, that too when the girl attains the age of 18 years.
How to open an SSY account?
The SSY account can be opened in the name of the girl at any Indian Post office or branch of authorized commercial banks. Either parents or legal guardians of a girl can open the account with a notified bank or post office. The Sukanya Samriddhi Account Form available at the post office or designated bank has to be filled by the guardian or parents.
- Is it available online?
Presently, neither branches of an authorized bank nor post offices allow you to open an SSY account online. But you can set the standing instructions online once the account is opened after the submission of all documents.
- The Documents needed to open an SSY account are
- Birth certificate of the girl child.
- Photo ID proof of applicant parent or legal guardian.
- Address proof of the applicant’s parent or legal guardian.
- Other KYC proofs like PAN, Voter ID.
- Bank passbook.
Process of application
- The Application form can be downloaded from the official website of either RBI, Indian Post, or participating public sector and private banks.
- Fill up the form with essential details of the girl child and a parent or legal guardian. Following are the essential fields to be filled in Sukanya Samriddhi Yojana, scheme form
- Primary Account Holder- Name of Girl Child
- Joint Holder- Name of A parent or legal guardian
- Initial deposit amount
- Cheque/DD Number and Date for the initial deposit
- Date of Birth of girl child along with Birth Certificate details
- Identity of Parent or legal guardian such as Driving License, Aadhaar, etc.
- Present and Permanent Address (as per ID document of the parent or legal guardian)
- Details of other KYC proofs such as PAN, Voter ID card, etc
- Sukanya Yojana interest rates
The Sukanya Samriddhi Yojana interest rate is fixed by the government and is reviewed every quarter. The Sukanya Samriddhi Yojana interest rate FY 2020-21 is 7.6%.
Sukanya Samriddhi Yojana Interest Rate was 8.4%. ( For Financial Year 2019-2020 from January to March 2020).
At first, the interest rate was estimated at 9.1% but later revised to 9.2% in late March 2015 for FY 2015-16. The interest rate has been revised for FY 2016-17 to 8.6%.
The Benefit of Sukanya Samriddhi Yojna
- Tax Saving
This scheme offers tax benefits that one cannot refuse.
- Under Section 80C of Income Tax Act, deposits up to INR 1.5 lakh are eligible for a deduction.
- The interest earned on the deposit is tax-free as the interest is compounded annually.
- Even the amount which is received upon maturity is tax-free.
- Better Interest Rate
The SSY scheme provides a better interest rate than any other small savings schemes.
- Long term maturity
Since Sukanya Samriddhi Yojana is a long-term investment, it benefitted highly from the use of compound interest. As it allows a girl child to use the funds for their higher education or marriage after the maturity period.
- Partial Withdrawal
There is also an option available under the SSY scheme in which one can partially withdraw an accrued amount for marriage expenses or if the daughter requires the funds to pursue higher studies. But the partial withdrawal amount cannot exceed 50 percent of the amount present in the account.