In India, where securing the future and education of the girl child is of utmost importance, the Sukanya Samriddhi Yojana (SSY) has emerged as a ray of hope for countless families. Launched by the Government of India in 2015, SSY is a small savings scheme designed to promote the welfare and financial security of girl children.
Sukanya Samriddhi Yojana (SSY) was introduced under the Beti Bachao Beti Padhao campaign, which means to ‘Save the Girl Child, Educate the Girl Child.’ This program was rolled out on January 22, 2015, in Panipat, Haryana, SSY aims to address a significant issue concerning girl children in India – education and marriage. It focuses on securing a bright future for girls by assisting parents in building a fund for their child’s education and marriage expenses. SSY achieves this through the Sukanya Samriddhi Account, a specialized savings instrument.
The core objective of SSY is to empower parents or guardians of girl children who are 10 years of age or younger. This scheme offers not only an attractive interest rate but also several tax benefits, making it a compelling choice for securing a girl child’s future.
In this article, we will delve into different facets of the Sukanya Samriddhi Yojana, including its objectives, eligibility criteria, benefits, and the process of opening an account.
Now, let’s take a closer look at the Sukanya Samriddhi Yojana:
Benefits of Investing in Sukanya Samriddhi Account
- Higher Interest Rates: This scheme offers an attractive interest rate of 7.6% for the first quarter of the 2023-24 financial year. This means your money can grow faster than in some other schemes.
- Tax Exemption: By investing in the Sukanya Samriddhi Yojana, you can save on taxes under Section 80C of the Income Tax Act. This means you can invest up to Rs 1.5 lakh each year and not pay taxes on that amount.
- Flexible Investment: You don't need a lot of money to start. You can begin with just Rs 250 in a year and invest up to Rs 1.5 lakh per year. This flexibility lets you invest based on your financial situation.
- Compound Interest: This scheme rewards you for long-term investing. Your money grows through annual compounding, which can lead to significant returns over time.
- Easy Transfers: If you need to move your Sukanya Samriddhi Account from one part of the country to another, you can do so without any hassle. This makes it convenient for you, especially if you relocate.
- Guaranteed Returns: Since this is a government-run scheme, you can be confident about getting guaranteed returns. Your money is secure and will steadily grow over time.
What are the Eligibility Criteria for the SSY (Sukanya Samriddhi Yojana) Account?
- Parents or legal guardians are eligible to open an account for their daughter.
- The girl child should be under 10 years old when opening the account, and it remains operational until she reaches 21.
- You can begin with a minimum initial deposit of ₹250, and you can contribute up to ₹1,50,000 annually with deposits as low as ₹100.
- Each girl child can have only one Sukanya Samriddhi account.
- Each family is allowed a maximum of two accounts, one for each daughter.
- To benefit from Sukanya Samriddhi Yojana, the applicant must be an Indian citizen.
- The account must be in the girl’s name.
- This scheme also allows for accounts to be opened in the name of adopted daughters.
Ways to Invest in Sukanya Samriddhi Yojana 2023
Sukanya Samriddhi Yojana offers a secure way to invest your money for 15 years. Depositing money into your account is easy and can be done through various methods:
1. Cash, Check or Draft
You can deposit money by using cash, checks, or drafts. Simply ensure you mention the name of the person depositing the funds and the account holder’s name. This straightforward method is widely accepted by banks.
When you deposit money through a check or draft, you’ll start earning interest once the payment is cleared.
2. Electronic Transfer:
If your bank or post office supports electronic transfers with a core banking system in place, you can opt for this method. The advantage here is that interest calculations start from the day of the deposit.
If you choose electronic transfer, interest accrual begins right from the day you make the deposit.
Also Read This: 15 Easy Ways To Save Income Tax In 2023-2024
Required Documents for Sukanya Samriddhi Yojana Account
The necessary documents for the Sukanya Samriddhi Yojana are:
- Parent’s Aadhaar Card
- PAN Card
- Identification Proof
- Daughter’s Aadhaar Card
- Birth Certificate
- Address Proof
- Passport-sized Photos
Application Process
To open a Sukanya Samriddhi Yojana (SSY) account, follow these easy steps, whether you want to do it offline or online.
- Get the Form: First, get the application form from either the Indian Post website, the RBI website, the official websites of participating public sector and private banks.
- Fill in the Form: Complete the form with important information about the girl child and a parent or legal guardian. Here's what you need to provide:
- Girl Child’s Name (Primary Account Holder)
- Parent or Legal Guardian’s Name (Joint Holder)
- Initial Deposit Amount
- Cheque/ Demand Draft (DD) Number and Date for the initial deposit
- Girl Child’s Date of Birth and Birth Certificate details
- Parent or Legal Guardian’s Identity Proof (like Driving License, Aadhaar, etc.)
- Current and Permanent Address (matching the parent or legal guardian’s ID document)
- Additional KYC Proof, such as a PAN card or Voter ID card.
Option 1: Open Sukanya Samriddhi Yojana (SSY) account Offline
- Visit a Bank or Post Office: Head to a participating bank or Post Office branch of your choice.
- Fill Out the Form: Complete the application form with all the necessary details. You'll need to provide information about the girl child (Primary Account Holder), a parent or legal guardian (Joint Holder), and some key information.
- Initial Deposit: Make your first deposit in cash, by check, or demand draft. You can deposit any amount between Rs. 250 and Rs. 1.5 lakh.
- Submit Application: Hand over your filled application form along with the initial deposit to the bank or Post Office.
- Processing: The bank or Post Office will process your application and payment.
- Account Activation: Once processed, your Sukanya Samriddhi Yojana account will be activated. They will provide you with a passbook to mark the opening of your account.
Option 2: Open Sukanya Samriddhi Yojana (SSY) account Offline
- Fund Transfer: Begin by transferring funds from your regular bank account to your India Post Payments Bank (IPPB) account.
- Access IPPB App: Open the IPPB app on your smartphone.
- Select SSY Account: Navigate to the "DOP Products" section within the IPPB app and choose the Sukanya Samriddhi Yojana account.
- Enter Account Details: Provide your SSY account number and DOP client ID.
- Set Payment Details: Specify the deposit amount and installment duration.
- Confirmation: Receive confirmation from the IPPB app that the payment setup was successful.
- Notification Alerts: You will be notified each time the app conducts a money transfer.
Also Read: From EPF to ELSS: Section 80C Tax Benefits
Sukanya Samriddhi Yojana Interest Rates
The Sukanya Samriddhi Yojana offers a fixed interest rate set by the government. As of 2023, the interest rate is 8%, subject to periodic reviews. This makes it a reliable choice for saving for your daughter’s future.
Latest Updates: As of 30 December 2023, the government led by Narendra Modi has increased the interest rates on the Sukanya Samriddhi Yojana (SSY) scheme by 20 basis points for the period of January to March 2024, just before the upcoming Lok Sabha polls in 2024. According to a circular from the finance ministry, deposits made under the Sukanya Samriddhi scheme will now earn an interest rate of 8.2%, up from the previous 8%. This move aims to enhance the benefits for investors in the scheme.
| Aspect | Details |
|---|---|
SSY Interest Rate | 8% per annum (as of the 2nd Quarter of FY 2023-24) |
Minimum Investment | Rs. 1,000 per annum |
Maximum Investment | Rs. 1.5 lakh per annum |
Maturity Amount | Maturity value varies based on the invested amount |
Maturity Period | Fixed at 21 years |
Premature Withdrawal | Allows for a premature withdrawal of up to 50% of the investment after the child reaches 18 years |
Maturity Procedure | On maturity, the balance (principal and interest earned) is paid to the girl child upon submission of an application along with documents confirming her citizenship, residence, and identity. |
Below is a table showing the previous interest rates provided by the SSY scheme:
| Time Period | SSY Interest Rate (% annually) |
|---|---|
Jul-Sep 2023 (Q2 FY 2023-24) | 8.0 |
Apr-Jun 2023 (Q1 FY 2023-24) | 8.0 |
Jan-Mar 2023 (Q4 FY 2022-23) | 7.6 |
Oct-Dec 2022 (Q3 FY 2022-23) | 7.6 |
Jul-Sep 2022 (Q2 FY 2022-23) | 7.6 |
Apr-Jun 2022 (Q1 FY 2022-23) | 7.6 |
Jan-Mar 2022 (Q4 FY 2021-22) | 7.6 |
Oct-Dec 2021 (Q3 FY 2021-22) | 7.6 |
Jul-Sep 2021 (Q2 FY 2021-22) | 7.6 |
Apr-Jun 2021 (Q1 FY 2021-22) | 7.6 |
Jan-Mar 2021 (Q4 FY 2020-21) | 7.6 |
Oct-Dec 2020 (Q3 FY 2020-21) | 7.6 |
Jul-Sep 2020 (Q2 FY 2020-21) | 7.6 |
Apr-Jun 2020 (Q1 FY 2020-21) | 7.6 |
Jan-Mar 2020 (Q4 FY 2019-20) | 8.4 |
Oct-Dec 2019 (Q3 FY 2019-20) | 8.4 |
Jul-Sep 2019 (Q2 FY 2019-20) | 8.4 |
Apr-Jun 2019 (Q1 FY 2019-20) | 8.5 |
Jan-Mar 2019 (Q4 FY 2018-19) | 8.5 |
Oct-Dec 2018 (Q3 FY 2018-19) | 8.5 |
Jul-Sep 2018 (Q2 FY 2018-19) | 8.1 |
Apr-Jun 2018 (Q1 FY 2018-19) | 8.1 |
Jan-Mar 2018 (Q4 FY 2017-18) | 8.1 |
Oct-Dec 2017 (Q3 FY 2017-18) | 8.3 |
Jul-Sep 2017 (Q2 FY 2017-18) | 8.3 |
Apr-Jun 2017 (Q1 FY 2017-18) | 8.4 |
Tax Benefits of Sukanya Samriddhi Yojana (SSY)
Sukanya Samriddhi Yojana offers several tax benefits to account holders:
- Under Section 80C of the Income Tax Act, SSY account holders can claim deductions of up to Rs 1,50,000 on their investments.
- The interest earned and accumulated within the SSY account is exempt from taxation.
- When the account matures, withdrawals can be made without any tax deductions, making it a tax-free option.
Therefore, these tax advantages render Sukanya Samriddhi Yojana an E-E-E instrument, signifying that it falls into the category of Exempt-Exempt-Exempt for tax purposes.
Sukanya Samriddhi Yojana Withdrawal Rules
While the scheme typically has a lock-in period of 21 years, there are provisions for partial withdrawals under specific circumstances before maturity. Understanding the rules and conditions for withdrawals is crucial for account holders to make informed financial decisions for purposes such as education, marriage, or unforeseen situations. Here are the withdrawal rules for Sukanya Samriddhi Yojana:
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Withdrawal on Maturity
- Tou can close the account once the 21-year period has ended..
- The girl child needs to submit address proof, ID proof, withdrawal application form, and citizenship documents.
Partial Withdrawal for Education
- The girl child must be 18 years old and have completed the 10th standard.
- Up to 50% of the previous year’s balance from your Sukanya Samriddhi Yojana account can be withdrawn.
- This withdrawal can be taken as a lump sum or in up to 5 installments.
- The money should be utilized for educational costs.
- Supporting documents like fee receipts or admission certificates are required.
Partial Withdrawal for Marriage
- The girl must be 18 years old.
- Withdrawal is allowed one month before or three months after the marriage.
- Need to submit age proof document and proof.
Sukanya Samriddhi Yojana Closure Rules
Closure on Maturity
The Sukanya Samriddhi Account reaches maturity when the girl child turns 21 years old. At this point, the account balance, along with the accrued interest, is disbursed to the child upon submission of an application and the necessary documents to confirm their identity, residence, and citizenship.
Premature Closure
There are two primary conditions under which a Sukanya Samriddhi Account can be terminated before its maturity:
- If the account holder sadly passes away, In this case, the parent or guardian needs to provide a death certificate from the authorities. They will then receive the remaining money in the account, along with the interest earned until the month just before the closure.
- The account can also be closed early if the government believes it’s very difficult for the parent or guardian to keep it open. The government would allow this only in extreme cases like serious illnesses or emergencies.
Key Updates in Sukanya Samriddhi Yojana
Sukanya Samriddhi Yojana has undergone improvements to make it even more accessible and advantageous for Indian families. These changes simplify the scheme, offering greater flexibility in deposits, extending tax benefits to a third daughter, and providing additional closure options.
- Flexible Deposits: In the past, you had to deposit at least Rs 250 every year. Now, if you can't manage that due to any reason, your interest rate won't be affected. In other words, you won't be labeled as a defaulter.
- Tax Benefits for Third Daughter: Initially, you could only open accounts for two daughters, and the third one didn't get tax benefits under section 80C. However, things have changed. Now, even the third daughter's account qualifies for tax benefits.
- More Closure Options: Previously, you could only close a Sukanya Samriddhi account prematurely if a child passed away or if the daughter got married abroad. The new rules allow for more flexibility. You can now close the account if the daughter is seriously ill or if the parents pass away.
- Age for Account Control: In the past, a girl could take control of her account after turning 10 years old. But now, the rules have changed. Any girl can manage her Sukanya Samriddhi account after she turns 18, which is when she becomes an adult.
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Conclusion
Sukanya Samriddhi Yojana (SSY) is a special savings scheme in India that helps parents secure their daughter’s future. It offers attractive interest rates, tax benefits, and flexibility in deposits. You can open an account for your daughter if she’s under 10 years old, and it matures when she turns 21. The scheme also allows for partial withdrawals for education and marriage. Plus, it provides tax exemptions, making it a smart choice for your child’s financial well-being. So, if you have a young daughter, consider SSY to ensure a bright and secure future for her.
