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Sukanya Samriddhi Scheme: Definitions, Returns, and More

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Sukanya Samriddhi Scheme: Definitions, Returns, and More

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If you have a daughter below the age of 10, chances are, you’re probably concerned about securing her future all the time. The Sukanya Samriddhi Yojana (SSY), or the Sukanya Samriddhi scheme, can help put your worries to rest. 

This is an initiative launched by the government of India to help parents of girl children secure the future of their daughters. It is a part of the government’s 'Beti Bachao Beti Padhao' campaign. 

Check out everything you need to know about the Sukanya Samriddhi scheme — right from the account opening rules to the returns it offers — so you can make the most of it.

What is the Sukanya Samriddi Yojana (SSY)?

The Sukanya Samriddhi scheme helps parents and guardians of girl children invest for the future of those kids. It encourages parents to build a fund for the future needs of their girl children, such as their education and their wedding. The scheme was launched in 2015, and it has become a highly preferred investment avenue in the years since. 

In this scheme, you need to open an account for your eligible child or children and make regular deposits into the account for a specified period. The deposits will continue to earn interest over the investment tenure, and at maturity, the principal as well as the interest thereon can be withdrawn. 

Opening an SSY account: All you need to know 

You can open an SSY account if you are the parent or guardian of a girl child aged below 10 years. This facility is available in authorised banks as well as in post offices. So, you can choose to open an account either through the post office or through any bank that offers this facility.

Each girl child can only have 1 account in her name. Moreover, the number of accounts is limited to 2 girl children per family. However, if the birth of a single girl child is followed by multiple births, where twins, triplets or more girl children are born together, this rule can be relaxed to allow for more than 2 accounts per family. 

The basic rules to follow to determine eligibility are as follows — 

  • In case of multiple births, either all the girl children born during that birth will be eligible, or they will all be ineligible.
  • If the family’s threshold limit for 2 accounts has not been reached at the time of the multiple births, then all the girl children born during that birth will be eligible.
  • If the family’s threshold limit for 2 accounts has already been reached at the time of the multiple births, then all the girl children born during that birth will be ineligible.

Let’s take a look at some scenarios to understand how this works.

Documents required to open an SSY account

To open an account for your girl child, you need to provide the following documents as a part of the application process. 

  • Birth certificate of the girl child
  • Identity and residential proof of the guardian
  • In case of multiple girl children in a single birth, medical certificate for proof of birth 

Making your deposits: All you need to know 

Once you have opened an account as a part of the Sukanya Samriddhi scheme, you need to make your investment. Here are the key rules and regulations surrounding SSY deposits. 

  • You need to deposit a minimum of Rs. 250 to open the SSY account.
  • The minimum amount of deposit during a financial year is Rs. 250.
  • The maximum amount of deposit during a financial year is Rs. 1.5 lakhs.
  • You can make deposits in multiples of Rs. 50.
  • There is no limit on the number of deposits you can make either in a month or in a year.
  • You can make deposits every year for a period of 15 years from the date of opening the account. 
  • Deposits can be made through cash, cheque, demand draft or online transfer.

Important: Make sure the SSY account does not go into the default category

To keep an account in the Sukanya Samriddhi scheme active, you need to make a minimum deposit of Rs. 250 each year. If you do not do this, the account will be tagged as a defaulted account.

You can revive a defaulted account before the completion of 15 years from the account opening date. To do this, you need to pay Rs. 250 as well as an extra payment of Rs. 50 per year during which the account was considered to be a defaulted one.

Interest on deposit: All you need to know 

The whole point of making any investment is to earn returns on the capital, isn’t it? So, let’s see how this works in the case of the Sukanya Samriddhi scheme. 

The rate of interest applicable to this scheme, as of July 2022, is 7.60% per annum. The interest is compounded annually and calculated on a yearly basis. At the end of each financial year, the interest earned during that year will be credited to the account.

Can you withdraw some of the funds from the account during the investment tenure?

Yes. Partial premature withdrawal is permitted after the girl child has attained 18 years of age or has passed 10th grade. In that case, you can withdraw some of the funds, keeping in kind the following key points —

  • You can withdraw up to 50% of the balance available at the end of the previous FY
  • You can make your withdrawal as a lump sum amount or in instalments
  • You can make only 1 withdrawal per year, for a maximum of 5 years

What happens at maturity?

The Sukanya Samriddhi scheme account will mature after 21 years from the date of opening. At this juncture, you can close the account and withdraw the corpus that has accumulated till date. 

Closure of the account before the completion of 21 years is permitted only in case of the marriage of the girl child, provided she has attained 18 years of age. In such cases too, the account can only be closed within 1 month before or within 3 months after the date of marriage.

Tax benefits of the Sukanya Samriddhi scheme

The amount that you deposit each year in the Sukanya Samriddhi scheme account is eligible for deduction under section 80C of the Income Tax Act, 1961. The maximum amount of deduction you can claim during each financial year is Rs. 1.5 lakhs.

In addition to this, the interest that you earn on your investments is also entirely tax-free.

Frequently Asked Questions

1. What is the benefit of the Sukanya Samriddhi scheme?

The Sukanya Samriddhi scheme helps the parents or guardians secure the financial future of girl children. It helps them build a fund to meet the long term life goals of the girl child, such as their higher education and their wedding.

2. What are Sukanya Samriddhi Yojana rules?

As per the rules of the Sukanya Samriddhi Yojana, only 1 account can be opened per girl child. Additionally, the number of accounts per family is limited to 2 accounts, except in cases of multiple girl children being born together (as in the case of twins, triplets, etc.)

3.What is the maturity  of Sukanya Samriddhi Account?

The Sukanya Samriddhi Scheme has a maturity period of 21 years.

3. What is better FD or Sukanya Samriddhi Yojana?

The Sukanya Samriddhi Scheme offers a higher rate of interest than FDs but is only eligible for a girl child only up to 10 years of age.

4. Is Sukanya Samriddhi return taxable?

Investments made in this scheme fall under section 80C with a maximum cap of Rs 1.5 Lakh. The interest that accumulates through this scheme is  exempted from tax under Section 10 of the Income Tax Act.

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