Sukanya Samriddhi Yojana: Everything You Should Know

Sukanya Samriddhi Yojana (SSY) is a scheme that aims to ensure the welfare of the girl child. This government-backed saving scheme was introduced by the Ministry of Finance and launched by Prime Minister Narendra Modi on January 22, 2015, as a part of the ‘Beti Bachao, Beti Padhao’ programme. The primary objective of this scheme is to encourage Indian parents to save for the bright and secure future of their daughters.

You can open a Sukanya Samriddhi account from any post office or authorised bank. These accounts have a tenure of 21 years. Under this scheme, you can make a maximum investment of Rs 1.5 lakh in a financial year and earn 8.2% interest rate (Q4 FY 2023-24).

Furthermore, the Sukanya Samriddhi Yojana offers excellent tax benefits. You can claim a tax deduction of upto Rs.1.5 Lakh rupees on account of investing in the scheme by virtue of Section 80C of the Income Tax Act, 1961. The interest income earned is also exempt from taxes.

Investing in this scheme enables you to accumulate enough funds for your daughter’s higher education and to ensure her financial stability. Here’s a complete guide to Sukanya Samridhi Yojana, its features, eligibility criteria, withdrawal rules and more.

Also Read: Sukanya Samriddhi Yojana: Eligibility, Benefits and More

Features of Sukanya Samriddhi Yojana

The following are features of the Sukanya Samriddhi Yojana and their key benefits:

• Opening an SSY account is easy and convenient. You can visit any post office or authorized bank to open a Sukanya Samriddhi account.
• Sukanya Samriddhi Yojana is a government-backed program, which makes it one of the safest investment options.
  
• A parent or legal guardian can open an account in the name of the girl child aged below 10 years. However, the girl can operate her account on her own after the age of 18.
  
• SSY accounts have a maturity period of 21 years. However, deposits only need to be made for 15 years from the opening date. Partial withdrawals are possible after the account holder turns 18.
  
• You can open an SSY account by making a minimum deposit of Rs. 250. Following that, you can make a minimum contribution of Rs. 250 and a maximum of Rs. 1,50,000 in a financial year.
• Failure to deposit a minimum of Rs. 250 in any financial year will result in a penalty of Rs. 50 per default year.
  
• SSY accounts can be transferred between banks and post offices anywhere in India at no additional charge.
• You can deposit the amount in your SSY account through a demand draft, cheque, cash or online transfer.
  
• Deposits made for SSY are eligible for tax benefits under Section 80C of the Income Tax Act. You can claim a tax benefit of up to Rs. 1.5 lakh annually. The interest income and maturity amount from SSY are also tax-free.
• SSY offers an interest rate of 8.2% per annum at present.

Also Read: Tax Credit and Tax Deductions: Expenses You Can Claim in FY 2022

Eligibility Criteria for Sukanya Samriddhi Yojana 

1. The girl child should not be older than 10 years on the account opening date.
2. The girl child and parent/guardian must be residents of India.
3. The girl child (account holder) can have only one account under the Sukanya Samriddhi Yojana.
4. To open an account, you will have to fill out the application form and submit the birth certificate of the girl child and supporting documents of the parent/guardian.
5. You can open accounts for two daughters only. However, there are exceptions for twins and triplets:
   • Your family is allowed to have SSY accounts for more than two girls if the first girl child was born before the twins/triplets.
   • However, you cannot open a third SSY account for a girl child born after the birth of twins/triplets.

How to Open a Sukanya Samriddhi Account

The process of opening a Sukanya Samriddhi Account is straightforward. Here are the steps:

1. Visit your nearest post office or designated bank and fill out the application form.
2. The primary account will be in the name of your daughter. As a parent/guardian, you will hold the account jointly.
3. You need to submit the following documents with the completed form:
   • Birth certificate of the girl child 
   • ID proof of the parent/guardian such as Aadhaar card, PAN card, voter ID, etc.
   • Address proof such as passport, driving licence, voter ID card, job card issued by NREGA, etc.
   • Photograph of the parent/guardian
4. Make the first deposit by cheque, demand draft or cash. A minimum deposit of Rs. 250 is required. You may deposit up to Rs 1.5 lakh.
5. Once all necessary documents are submitted, the bank or post office will process the application. This could take a few days.
6. Upon completion of verification, you will receive a passbook for your SSY account.

Operating Sukanya Samriddhi Account Online

For now, neither authorized banks nor post offices allow online registrations for SSY accounts. However, you can make deposits online. Here is how you can do it if you opened a Sukanya Samriddhi account with the post office:

1. Deposit money from your regular savings accounts into the IPPB’s (India Post Payments Bank) savings account.
2. Go to your IPPB account and head to the Department of Post (DOP) product page, and select the Sukanya Samriddhi Yojana account option.
3. Provide the credentials for your SSY account, including the account number and customer ID provided by the post office.
4. After you log in, you can transfer money from IPPB to the Sukanya Samriddhi Yojana scheme.
5. You will receive a notification of the transfer on your registered mobile number.

In case you have opened a Sukanya Samriddhi account through the bank, you may make deposits online through their net banking services.

Sukanya Samriddhi Yojana Interest Rate

The interest rate on the Sukanya Samriddhi Yojana scheme is regulated by the Indian government and is reviewed quarterly. The interest rate is 8.2% for the fourth quarter of the financial year 2023-24.

Tax Implications of SSY

The Sukanya Samriddhi Yojana offers the following tax exemptions:

• The contributions to the scheme are tax deductible up to Rs. 1.5 lakh under Section 80C of the Income Tax Act, 1961.
• Interest income derived from SSY is tax-free.
• Once the account matures, the funds can be withdrawn tax-free.

This combination of tax benefits makes the Sukanya Samriddhi Yojana an EEE investment, which stands for Exempt-Exempt-Exempt.

Maturity Period of SSY

A Sukanya Samriddhi Yojana account has a maturity period of 21 years from the account opening date. It means the girl child can withdraw her entire corpus after 21 years from the account opening date. However, you can withdraw funds earlier under certain conditions. Here are the Sukanya Samriddhi Yojana withdrawal rules:

Withdrawal for education

As a means of providing higher education for your daughter, you can withdraw up to 50% of the balance in the account available at the end of the previous financial year. However, withdrawal is only allowed if your daughter (account holder) attains the age of 18 or has passed the 10th standard. 

Furthermore, you will be required to submit a proof, such as confirmation of admission from an educational institution or fee slips showing your financial requirements.

Premature withdrawal

• When the account holder reaches 18 years of age and gets married, she can withdraw the entire amount. However, she needs to apply 30 days before her marriage date or within three months of her marriage date.
• If the account holder changes citizenship or resident status, the account will be considered closed. Upon changing citizenship or resident status, the parent/guardian must notify the bank or post office within a month. Once the status changes, the SSY interest rate will no longer apply. However, until the withdrawal, the standard post office interest rate will remain in effect.
• If the continuation of the account is causing distress to the account holder, the account can be closed prematurely. For this, the parent or account holder (girl child) must produce the supporting documents to the bank/post office and seek their approval. However, it only applies to accounts held for five years or longer.
• Following the account holder’s death, it is necessary to close the account. The balance including interest accrued is transferred to the parent/guardian in such cases.

Final Thoughts

Participation in the Sukanya Samriddhi Yojana scheme helps you ensure the financial well-being of your daughter. This scheme enables you to build a corpus to support your daughter’s education or meet her other financial obligations in the future. SSY is one of the safest investment options, offering attractive interest rates and tax benefits.

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