Table of Contents
Introduction: Sukanya Samriddhi Yojana ( सुकन्या समृद्धि योजना )
Prime Minister Narendra Modi on 22 January 2015 launched Sukanya Samriddhi Yojana under the ‘Beti Bachao Beti Padhao’ campaign. And between 2018 and 2021, Within 3 years only 1.43 crore accounts have been opened under Sukanya Samriddhi Yojana. This is a government-backed savings scheme designed to secure the future of your daughter.
Main objective of the Sukanya Samriddhi Yojana (SSY)
- To create funds for girl child education and marriage expenses.
- In this scheme, the parents or guardians of the girl child can invest regularly, and on maturity, they get back the original investment with interest. An interesting thing is that whatever money you earn in SSY does not have to be taxed.
- That means risk-free, tax-free savings for your daughter! SSY account opening date matures after 21 years. For example, if you opened an SSY account when your daughter was five years old, the account will mature when your daughter turns 26 years old. But yes, some exceptions are necessary for you to withdraw money from the SSY account before maturity.
I will explain this in detail. Investing in SSY also offers better interest rates than bank FDs or other government schemes. From 2021, the interest rate on SSY remained unchanged at 7.6% per annum.
For the quarter of April to June 2023, the interest rate has been 8% per annum. The government keeps changing this interest rate quarterly. So let us know the eligibility criteria to invest in this scheme.
And current Interest rate is 8.2% per annum.
Eligibility criteria for Sukanya Samriddhi Yojana (SSY)
- First, at the time of opening the account, the age of the account holder, i.e., the girl, should be less than 10 years. This means this account can be opened only after 10 years of birth.
- Second, remember that only one account can be created in the name of a girl child. And a maximum of 2 accounts can be opened in a family, one for each girl child. But yes, there is an exception if you have twin daughters after one girl, then you can open an account in SSY for your three children. One more thing, if you have the legal documents for adopting a daughter, then you can also open an account in SSY for her.
Features and benefits of Sukanya Samriddhi Yojana (SSY)
- A minimum of Rs 250 and a maximum of Rs 1.5 lakh per year can be invested in this scheme. Starting from the date of account opening up to 15 years, you need to invest Rs 250 every year in this scheme. And after that, your investment will continue to earn interest till maturity.
- Remember, the date of opening of the maturity of the SSY account is after 21 years. That is, you cannot withdraw money from an SSY account for 21 years.
- In some cases, you can withdraw the amount from the SSY account even before maturity. For example, if your daughter has turned 18 or has passed class 10, you can withdraw up to 50% of the balance at the end of the previous financial year for higher education. Apart from this, the account can also be closed prematurely after the daughter turns 18 for her marriage.
Tax benefits of Sukanya Samriddhi Yojana (SSY)
- The best part is that this investment also gives you tax benefits. SSY not only offers 8% risk-free interest, but this return is also completely tax-free.
- SSY is one of the few special schemes that fall under the investment categories of “Triple EEE,” i.e. Exempt, Exempt, Exempt. The first E means that whatever amount you invest in SSY yearly will be deducted from your taxable income. For example, if you invest Rs 50,000 in the SSY account every year, then under section 80C, Rs 50,000 will be deducted from your taxable income.
- The second E means that whatever interest you earn, there will be no tax on it.
- The third E means that you do not have to pay any tax on the final amount, which will be made on maturity. Now, it is important to understand one thing here. Whether you open an SSY account or not, the maximum tax deduction under Section 80C will be limited to Rs 1.5 lakh.
How to open Sukanya Samriddhi Yojana (SSY) account?
Now, let us know how to open an SSY account to take advantage of this highly lucrative scheme. To apply for SSY, you can use it at any post office or visit some specially designated public or private banks where the government has permitted the scheme. Currently, there is no online process to open an SSY account; one has to visit your bank or post office to open the account. The daughter turns 18 for her marriage.
Let us understand the step-by-step process.
- Visit your nearest bank or post office and fill out Form SSA-1 there. If you want, give this form to RBI, India Post, or download and fill it out from the website of participating private and public banks.
- Along with the form, you have to submit some documents like the birth certificate of your daughter, identity proof of parent or guardian like PAN and Aadhaar card, and proof of address like electricity bill.
- After submitting the documents and forms, you will need to make your first deposit. You can transfer it by cash, cheque, demand draft, or online.
- And that’s it. The post office or bank will process your application open the SSY account, and issue a passbook. Remember that an SSY account can be easily transferred from one post office or bank to another post office or bank. Suppose you are shifting from Delhi to Mumbai; then you can get your SSY account transferred from Delhi to the Mumbai post office or bank.
Let us compare the two most popular government savings schemes in India – PPF and SSY. After all, PPF is also a good risk-free and tax-free investment option.
The biggest difference between PPF and SSY is that anyone can open a PPF account, while an SSY account is only for girl children. However, where SSY currently offers 8% interest per annum, we get 7.10% interest on PPF.
Another difference between PPF and SSY is the withdrawal. While in PPF, you can withdraw the amount after five years, in SSY, you cannot even make a partial withdrawal until your daughter turns 18 or completes 10th standard. Apart from this, you can also take a loan on PPF, which is not possible on SSY.
In terms of other tax benefits, both the schemes have EEE status, and you can avail deductions up to Rs.1.5 lakh.
Banks to Open Sukanya Samriddhi Yojana Account
| 1. HDFC Bank | 2. Axis Bank | 3. Punjab National Bank |
| 4. Canara Bank | 5. Union Bank of India | 6. ICICI Bank |
| 7. Central Bank of India | 8. IDBI Bank | 9. Canara Bank |
| 10. Indian Bank | 11. State Bank of India | 12. Bank of Maharashtra |
| 13. Punjab & Sind Bank | 14. Indian Overseas Bank | 15. UCO Bank |
| 16. Bank of India | 17. Bank of Baroda | |
Conclusion
Sukanya Samriddhi Yojana is a commendable initiative by the Government of India to promote the welfare and education of the girl child. By investing in this scheme, parents can secure their daughter’s future and provide her with the necessary financial support for higher education and marriage. The scheme’s attractive interest rates, tax benefits, and flexibility make it an excellent investment option for parents looking to save for their girl child’s future. So, take advantage of this scheme and give your daughter a head start in life.
It would not be wrong to say that investing in Sukanya Samriddhi Yojana is a smart and financially wise decision to secure your daughter’s future. The scheme comes with a sovereign guarantee, EEE tax-exempt status, and a long lock-in period, all of which ensure that you reap the benefits of compounding on your investment and you make a big corpus for your daughter’s education and marriage.
Find Details : Government Website Details about Sukanya Samruddhi Yojna (SSY)
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FAQs
Who is eligible to open a Sukanya Samriddhi Yojana (SSY) account?
The account can be opened for a girl child below the age of 10 years. Only one account can be opened in the name of a girl child, and a maximum of two accounts are allowed per family, with an exception for twin daughters.
What is the minimum and maximum investment allowed in SSY?
A minimum of Rs. 250 and a maximum of Rs. 1.5 lakh per year can be invested in the scheme.
What is the maturity period of SSY?
The maturity period of an SSY account is 21 years from the date of opening.
What are the tax benefits of investing in SSY?
Investments in SSY are eligible for tax deductions under Section 80C. The interest earned and the maturity amount are also tax-free.
How can I open an SSY account?
To open an SSY account, visit your nearest post office or designated public/private bank. Fill out Form SSA-1 and submit it along with necessary documents like the birth certificate of the girl child, identity proof of parent/guardian, and proof of address.
Can an SSY account be transferred from one post office/bank to another?
Yes, an SSY account can be easily transferred from one post office or bank to another.
What happens if I have legal documents for adopting a daughter?
If you have legal documents for adopting a daughter, you can also open an SSY account in her name.
Can I withdraw money from SSY before maturity?
Yes, partial withdrawals are allowed for higher education after the girl turns 18 or completes 10th standard, and for marriage after she turns 18.
What is the current interest rate for SSY?
The current interest rate for SSY is 8.2% per annum.
