What is the Sukanya Samriddhi Yojana (SSY)
The Sukanya Samriddhi Yojana is a fixed-income small savings scheme introduced by the Indian government in 2015. This scheme was introduced under the ‘Beti Bachao, Beti Padhao’ campaign to promote the welfare of the girl child. SSY allows parents to save and designate funds for their daughter’s future expenses like educational expenses and marriage. The government revises the SSY interest rate applicable to the saved funds every three months.
Before you start creating an SSY nest egg for your daughter, it is important to understand how SSY accounts operate. Here is a quick overview of the SSY scheme you can review:
SSY Rules
|
Details
|
Account opener
|
Parent/guardian
|
Age of girl child
|
Less than 10 years
|
Maturity date
|
21 years from the date of account opening/the girl child’s marriage (whichever comes first)
|
Years of investment
|
15 years
|
Minimum investment
|
Rs. 250
|
Maximum investment
|
Rs. 1.5 lakh annually
|
Number of accounts per girl child
|
One account
|
Number of accounts per family
|
Two accounts
|
If you are looking for a safe investment option, you can consider fixed deposit. They offer guaranteed returns and a fixed interest rate throughout your investment tenure.
Also read: NREGA
Formula to calculate the interest earned on SSY
SSY interest is calculated based on the lowest balance in the account between the 5th of every month and the end of the month. Interest is credited at the end of each financial year. The interest earned on SSY accounts can be calculated using the following formula:
A = P (1+r/n)^nt
Here,
A is the maturity amount,
P is the principal invested
r is the SSY interest rate
n is the number of times the interest is compounded in a year
t is the number of years
Since SSY interest is compounded annually, calculating the same manually can be a challenge. Instead, you can use a Sukanya Samriddhio Yojana calculator to accurately determine the interest earned on the investment and the maturity amount.
Sukanya Samriddhi Yojana interest rates 2024
Sukanya Samriddhi Yojana interest rates are revised every quarter. The following table showcases historical SSY interest rate trends:
Time period
|
Sukanya Samriddhi Yojana interest rate
|
April to June (Q1 FY 2024-2025)
|
8.2%
|
January to March (Q4 FY 2023-2024)
|
8.2%
|
October to December (Q3 FY 2023-2024)
|
8.0%
|
July to September (Q2 FY 2023-2024)
|
8.0%
|
April to June (Q1 FY 2023-2024)
|
8.0%
|
January to March (Q4 FY 2022-2023)
|
7.6%
|
October to December (Q3 FY 2022-2023)
|
7.6%
|
July to September (Q2 FY 2022-2023)
|
7.6%
|
April to June (Q1 FY 2022-2023)
|
7.6%
|
January to March (Q4 FY 2021-2022)
|
7.6%
|
October to December (Q3 FY 2021-2022)
|
7.6%
|
July to September (Q2 FY 2021-2022)
|
7.6%
|
April to June (Q1 FY 2021-2022)
|
7.6%
|
January to March (Q4 FY 2020-2021)
|
7.6%
|
October to December (Q3 FY 2020-2021)
|
7.6%
|
July to September (Q2 FY 2020-2021)
|
7.6%
|
April to June (Q1 FY 2020-2021)
|
7.6%
|
January to March (Q4 FY 2019-2020)
|
8.4%
|
October to December (Q3 FY 2019-2020)
|
8.4%
|
July to September (Q2 FY 2019-2020)
|
8.4%
|
April to June (Q1 FY 2019-2020)
|
8.5%
|
January to March (Q4 FY 2018-2019)
|
8.5%
|
October to December (Q3 FY 2018-2019)
|
8.5%
|
July to September (Q2 FY 2018-2019)
|
8.1%
|
April to June (Q1 FY 2018-2019)
|
8.1%
|
January to March (Q4 FY 2017-2018)
|
8.1%
|
October to December (Q3 FY 2017-2018)
|
8.3%
|
July to September (Q2 FY 2017-2018)
|
8.3%
|
April to June (Q1 FY 2017-2018)
|
8.4%
|
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Also read: What is NPS National Pension Scheme
Features and benefits of Sukanya Samriddhi Yojana
- Eligible age: SSY accounts can be opened by parents or guardians of a girl child below 10 years of age. This helps parents and guardians plan for the girl child’s future in advance.
- Interest rate: The applicable Sukanya Samriddhi interest rate on the account is revised by the central government quarterly and is generally higher than other safe investment avenues like RDs. Currently, the Sukanya Samriddhi Yojana interest rate for 2024 (April-June quarter) stands at 8.2%.
- Maximum and minimum investment: Parents can secure their daughter’s future with a nominal investment of just Rs. 250. Every year this nominal investment needs to be made to keep the account active. Moreover, parents/guardians can flexibly invest in the scheme since the maximum cap is Rs. 1.5 lakh.
- Tenure: SSY accounts mature after completing 21 years from the date of account opening or upon the girl child’s marriage after the age of 18. This long tenure and consistently high SSY interest rates allow parents to secure their daughter’s future aspirations with a sizable corpus.
- Premature withdrawals: The premature withdrawal clause allows the girl child access to up to 50% of the saved funds when she turns 18. These funds can be used to fund her higher education expenses, helping her achieve her dreams.
- Tax benefits: Apart from high SSY interest rates to grow their savings, parents of a girl child can also enjoy tax benefits on their investment. SSY accounts fall under the EEE category. Therefore, contributions made to an SSY account qualify for tax deductions u/s 80(C).
- Premature closure: An SSY account can be prematurely closed under specific circumstances like the unfortunate demise of the account holder, death of the parent/guardian, or critical illness diagnosis. Similarly, if the girl child attains an NRO/OCI status before maturity, her SSY account will be closed.
What are the documents required to open an SSY account
To open an SSY account and benefit from the Sukanya Samriddhi Yojana interest rate, you need to submit the following documents:
- A duly filled SSY form
- Birth certificate of the girl child
- Passport-sized photos of the parent/guardians of the girl child
- Identity and address proof documents of the parents/guardians
Also read: Ladli Laxmi Yojana
Eligibility criteria for Sukanya Samriddhi Yojana scheme?
Criteria
|
Description
|
Account opener
|
Parent or legal guardian of a girl child
|
Age of girl child (at account opening)
|
Less than 10 years
|
Maturity tenure
|
Until the girl reaches the age of 21 years
|
Minimum investment per year
|
Rs. 250
|
Maximum investment per year
|
Rs. 1.5 lakh
|
Number of accounts per girl child
|
Only one
|
Number of accounts per family
|
Two (exceptions for twins and triplets)
|
Interest rules for premature closure
According to the guidelines of the Sukanya Samriddhi Yojana, premature closures are permitted after 5 years of holding the account under the following circumstances:
- Marriage of the girl child after she turns 18.
- Unfortunate demise of the account holder or the parent/guardian.
- Medical treatment for a life-threatening disease.
- The girl child becomes a non-citizen.
SSY accounts can be closed for other reasons as well. However, SSY interest rates will not apply to the saved funds. Instead, your saved SSY funds will earn the same interest as general post office deposits.
Conclusion
The Sukanya Samriddhi Yojana is a great way for parents to secure the financial future of their daughters. Its high interest rates and triple tax benefits (EEE) make saving tax efficient. Even small, regular contributions over the 15-year period can create a substantial fund for your daughter's education or wedding expenses.
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