Sukanya Samriddhi Yojna can help provide a bright future for young girls across the country. Here’s how it can help parents and their daughters.

Sukanya Samriddhi Scheme: It is benefits for the girl child

Launched on 21st Jan 2015, the Sukanya Samriddhi Yojana/Scheme (SSY) aims at encouraging parents to secure the future for their daughters. Prime Minister Narendra Modi launched this scheme under the ‘Beti Bachao, Beti Padhao’ campaign.

Sukanya Samriddhi Yojana details states that accounts can be opened anywhere in India and can be transferred to any bank account in India. Accounts can also be opened any time before your daughter child turns 10 years old.

Related: 7 Government schemes to aid economic development and financial stability that you can benefit from

Eligibility Criteria for Sukanya Samriddhi Yojana

  • Only girl children are entitled to have a Sukanya Samriddhi scheme benefits
  • The girl child should be less than 10 years old when opening the account
  • Age proof of the girl child is mandatory

Parents can open a maximum of 2 accounts under this scheme, one for each daughter (if they have two daughters). In case the first or second delivery is twin girls, the scheme allows parents to open a third account, if they have another daughter.

The Sukanya Samriddhi Scheme offers several benefits for girls and their parents:

  • An account under this scheme can be opened with a minimum amount of Rs. 1000
  • After the first deposit, all future deposits can be made in any amount, provided they are multiples of 100
  • A maximum of Rs. 1.5 Lakh can be deposited in the account during one financial year
  • To keep the account functional, a minimum amount of Rs. 1000 is to be deposited every financial year
  • A girl can start operating her account as soon as she turns 10.

The Sukanya Samriddhi account matures after 21 years, from the day the account was opened or when your daughter gets married (whichever comes first).

What are the withdrawals rules associated with Sukanya Samriddhi Yojana?

  • The scheme allows a premature withdrawal if and only if funds are needed for your daughter’s higher education.
  • You can withdraw 50% of the funds from this account as a premature withdrawal.
  • Although the account matures 21 years after it has been opened, deposits in this account are permitted for 14 years from the date of opening the account.

What is the Interest rate offered under Sukanya Samriddhi Yojana?

This scheme offers one of the highest interest rates amongst Government-sponsored savings schemes for a girl child. When first launched, the scheme offered an interest rate of 9.1%. The current rate (July 2022), is 7.6%.

The interest rate on Sukanya Samriddhi Yojana is announced by the Government at the end of every quarter. Calculation of interest is as per the lowest balance in the SSY account between 5th day and end of the month. So ideally one should ensure to get the deposit credited before 5th day of the month. Interest shall be credited in SSY account at the end of the financial year. 

What are the Tax Benefits of Sukanya Samriddhi Yojana?

The Sukanya Samriddhi Scheme is also one of the most tax efficient schemes available.

Deposits made in these accounts will be tax exempted under Section 80C of IT Act, 1961. Even interest earned from this account will be eligible for tax deduction. Additionally, when the account matures, the withdrawal amount will also be exempted from tax.

Related: Child insurance: How to make sure your child gets funds at the right time

Unique features of Sukanya Samriddhi Yojana

One feature of Sukanya Samriddhi Scheme that stands out is that if the account isn’t closed when it matures, the account holder will still get the interest amount. In fact, the account will continue to gain interest until it is closed.
 Another benefit of this scheme is that whatever amount is withdrawn from the account when it matures is directly paid to the account holder, i.e. the girl child in whose name the account is.

Related: How to plan for child education expenses

Points to note before investing in Sukanya Samriddhi Yojana:

  • The account will not earn interest after it has matured.
  • The lock-in period is on the higher side.
  • There’s no surety as to whether the rate of interest will stay the same in the future.

By launching this Sukanya Samriddhi Scheme, the Government of India hopes to improve the future of girls across the country by ensuring they are not seen as burdens for their parents. If planned carefully, you can create a robust fund for your daughter’s education, marriage and future without worrying too much about finances.

Disclaimer: This article is intended for general information purposes only and should not be construed as investment, insurance, tax or legal advice. You are encouraged to separately obtain independent advice when making decisions in these areas.