Sukanya Samriddhi Yojana (SSY) - Eligibility, Benefits, Features, Interest rates & List of Banks for SSY account

Sukanya Samriddhi Yojana (SSY) is a small savings scheme backed by the government for the benefit of girl child. It is a part of the 'Beti Bachao, Beti Padhao' Yojana and account for the scheme can be opened by the parents of a girl child below the age of 10. It can be opened at selected banks or post offices. The time period of Sukanya Samriddhi Account can be of 21 years or until the girl marries after the age of 18 years.

Sukanya Samriddhi Yojana (SSY) Eligibility

• Only parents or legal guardians of a girl child are eligible to open an SSY account.

• The girl child should be below the age of 10 at the time of account opening.

• Only a single account can be opened in the name of a girl child.

• Only two SSY accounts can be opened by a family i.e. one for each girl child.

Note: Sukanya Samriddhi Account is allowed for more than two girls in some exceptional cases which are-

1. If a girl child is born before the birth of twin or triplet girls, or if triplets are born at first, then a third account is allowed in such case.
2. If a girl child is born after the birth of twin or triplet girls, a third SSY account is not allowed in such case.

Benefits of Investing in Sukanya Samriddhi Yojana (SSY)

Sukanya Samriddhi Yojana is introduced as part of the 'Beti Bachao, Beti Padhao' initiative, which provides the following key benefits:

The total deposit in ‘Account under default’ (in case of a minimum amount of Rs 250 has not been deposited), which is not made regular within the prescribed time, would earn interest on the post savings bank account; except if the default is made because of the death of the guardian who opened the Account.

Guaranteed Returns - As SSY scheme is backed by the government, the returns are guaranteed.

Tax Benefit - To encourage more families to invest in SSY, the scheme has also been provided certain tax benefits:

Investments made in the SSY scheme are allowed for deductions under Section 80C (to a maximum cap of Rs 1.5 lakhs).

The interest received from this account which gets compounded annually is also exempted from tax.

The amount received on the maturity or withdrawal are also exempted from income tax.

Flexible Investment - The minimum deposit is Rs 250 for a year and the maximum deposit is Rs 1.5 lakh for a year. This shows that people with different financial backgrounds can invest in the scheme.

Benefit of Compounding - Sukanya Samriddhi Yojana (SSY) is a long-term investment scheme with the benefit of annual compounding. So, even small investments will get compounding returns over the long term.

Suitable Transfer - SSY account can be easily transferred from one bank/post office to another (bank/post office) in case of transfer of parent/guardian operating the Sukanya Samriddhi Account.

Sukanya Samriddhi Yojana (SSY) Deposit Limits

The minimum amount of investment to the Sukanya Samriddhi Account is Rs 250 and the maximum is Rs 1.5 lakh for a financial year. You have to invest at least the minimum amount every year for up to 15 years from the date of opening an account. Thereafter the account will continue to earn interest till maturity.

Sukanya Samriddhi Yojana (SSY) Tenure/Maturity Period

Sukanya Samriddhi Yojana's maturity period is equal to the time the girl child is 21 years of age or upon her marriage after reaching the age of 18 years. However, contributions are needed to be made only for 15 years. Thereafter the account continues to generate interest until maturity even if no deposits are made into it.

Other Key Features of Sukanya Samriddhi Yojana (SSY)

If an SSY account holder is not able to deposit even Rs 250 for a year, his/her account will be considered as a ‘Default Account’. The default account will earn the interest rate till maturity date as applicable in the scheme.

A girl herself can operate her own account after the age of 18 years. When a girl becomes 18 years old, she can operate the SSY after submitting all the necessary documents to the post office/bank where the account is being held.

Premature Closure of SSY Account

Premature closure of an SSY account can only be done by a girl child on reaching the age of 18 years for the purpose of marriage expenses. However, there are some exceptional cases under which the account can be closed and the respective amount can be withdrawn:

Uncertain death of the account holder (Girl)

In case of the unfortunate death of the girl child, the parents or the legal guardian are allowed to claim the final amount and total interest as well. The amount will be given to the nominee of the account instantly. Also, the parents or legal guardian have to provide the relevant documents verifying the death of the account holder.

Inability to continue the account

The Sukanya Samriddhi Account can be closed before maturity if there is any kind of guidelines from the central government regarding the inability of the depositor to continue the account. The closure can also be made if the contribution to the account is causing any kind of financial stress to the depositor. Moreover, proper permission from the concerned authorities must be received for the closure and settlement of the account.

It must be noted that the closing of the account under Sukanya Samriddhi Yojana will only be allowed under extreme cases such as life threatening diseases or health emergencies.

Sukanya Samriddhi Yojana interest rate

The interest rate for the 1st quarter of FY 2021-2022, i.e. 1st April 2021 to 30th June 2021, unchanged to 7.6%.

The interest rate for the 4th quarter of FY 2020-2021, i.e. 1st January, 2021 to 31st March, 2021 was 7.6%.

How to invest in the Sukanya Samriddhi Yojana?

You can invest in this scheme by visiting the nearest post office of your area or designated branches of participating public and private banks. You will have to provide KYC documents like Passport, Aadhaar Card, etc. and initial deposit by cheque/draft.

Investors will have to fill out the Sukanya Samriddhi Yojana (SSY) Application Form, which can be obtained by visiting the nearest post office or the nearest branch of the participating public/private sector bank. The SSY New Account Application Form can also be downloaded online from the following sources:

• The Reserve Bank of India Website
• The India Post Website
• Website of any public sector banks like SBI, PNB, BoB, etc.
• The websites of participating private sector banks (e.g. ICICI Bank, Axis Bank and HDFC Bank).

List of Banks to open the Sukanya Samriddhi Yojana account

You can open a Sukanya Samriddhi Yojana account easily with the nearest branch of the participating bank or a Post Office branch. The participating banks are:

• State Bank of India
• Allahabad Bank
• Andhra Bank
• Punjab and Sind Bank
• Bank of Baroda
• Canara Bank
• Bank of India
• Bank of Maharashtra
• Corporation Bank
• Central Bank of India
• Indian Overseas Bank
• Dena Bank
• Indian Bank
• UCO Bank
• Syndicate Bank
• United Bank of India
• Punjab National Bank
• Union Bank of India
• Oriental Bank of Commerce
• IDBI Bank
• Vijaya Bank
• Axis Bank
• ICICI Bank

How to fill SSY Application Form?

The SSY applicants will have to provide the following information regarding the girl child and the parent/guardian who will be opening the account/making deposits on her behalf:

• Name of Girl Child (Primary Account Holder)
• Name of Parent/Guardian opening the account (Joint Holder)
• Initial deposit amount
• Cheque/DD Number & Date for the first deposit
• Date of Birth of girl child
• Birth Certificate of primary account holder including Certificate number, date of issue, etc.
• ID Details of Parent/Guardian (Driving License, Aadhaar, etc.)
• Your Permanent Address (with proof and ID document of parent/guardian)
• Details of any other KYC Documents like PAN, Voter ID card etc.
• Once the above details are filled out, an applicant will have to sign and submit the form to the account opening authority (Post office or Bank Branch) with the copies of all applicable documents.

Tax Implication of Sukanya Samriddhi Yojana (SSY)

SSY investments are designated as an EEE (Exempt, Exempt, Exempt) investment which means that the principal amount, the interest earned as well as the maturity amount are tax-free. Under existing taxation rules of Sukanya Samriddhi Yojana, the tax exemption benefit on the principal amount is up to Rs 1.5 lakh per annum under Section 80C of the Income Tax Act, 1961.

How to calculate Sukanya Samriddhi Yojana interest?

The interest is calculated on the lowest balance for a particular month. The interest is credited once, at the end of the financial year.

Formula to calculate the interest earned on an SSY account is:

A = P(1+r/n)^nt

Where,

P = Initial Deposit

r = Rate of interest

n = Number of years the interest compounds

t = Number of years

A = Amount at maturity

Since the interest generated on an SSY account is compounded on annually basis, you may find it difficult to calculate the interest. If so, you can use Sukanya Samriddhi Yojana Calculator to calculate the maturity amount upon entering the details, such as probable investment amount per year, the age of the girl child, and the account commencement year. You can easily find such calculator by searching on google.