Developed as part of the government’s ‘Beti Bachao, Beti Padhao’ campaign, Sukanya Samriddhi Yojana or SSY is a welfare scheme designed for the girl child. Investing in this child insurance plan allows parents or legal guardians to ensure financial security for a girl child aged ten years or below. Under the Sukanya Samriddhi Yojana, an account in the name of the girl can be opened across any of the private and public sector banks for 21 years. The tenure of investment under SSY is 21 years, starting from the account’s opening date.
What is Sukanya Samriddhi Yojana?
Sukanya Samriddhi Yojana is a saving scheme by the Government of India, which is aimed at the betterment of girl children in India. It is launched to help parents build a fund for the higher education and other expenses of their girl child.
Sukanya Samriddhi Yojana also referred to as SSY, is a deposit scheme made especially for the girl child. This scheme was introduced to ensure a financially secure future for the girl child.
Through regular deposits, you can create a sufficient corpus as the years pass by, which can later be used for meeting your child’s life goals.
It is one of the multiple schemes that the Government introduced under its Beti Bachao Beti Padhao Yojana launched in the year 2015 by Prime Minister Narendra Modi. ‘Dhanlakshmi Scheme’, and ‘Ladli Scheme’ were some of the other schemes launched.
Sukanya Samriddhi Yojana- Interest Rates
The rate of interest that you will receive in your Sukanya Samriddhi Yojana account currently stands at 7.6% p.a. This interest rate is applicable from 1st April 2020. This is lower than the previous rate which was 8.4%.
However, if you have deposited between 12th December 2019 to 31st March 2020 then you will earn 8.4% p.a.
- Interest is payable to you yearly
- Interest is credited at the end of every financial year only
- The interest rate is decided by the government and changes every quarter
- No interest will be provided if the girl becomes an NRI
Here is a table that shows the interest rates offered by the SSY scheme since its inception:
| YEAR | RATE |
|---|---|
| April 2020 – Present | 7.6% p.a. |
| 1 January 2019 – 31 March 2019 | 8.5% p.a. |
| 1 October 2018 – 31 December 2018 | 8.5% p.a. |
| 1 July 2018 – 30 September 2018 | 8.1% p.a. |
| 1 April 2018 – 30 June 2018 | 8.1% p.a. |
| 1 January 2018 – 31 March 2018 | 8.1% p.a. |
| 1 July 2017 – 31 December 2017 | 8.3% p.a. |
| 1 October 2016 – 31 December 2016 | 8.5% p.a. |
| 1 July 2016 – 30 September 2016 | 8.6% p.a. |
| 1 April 2016 – 30 June 2016 | 8.6% p.a. |
| 1 April 2015 – March 31 2016 | 9.2% p.a. |
| 3 December 2014 – March 31 2015 | 9.1% p.a. |
How to Calculate Interest on Sukanya Samriddhi Yojana Scheme?
To determine the required corpus, we need to consider the interest that will be added. You can use the below formula to calculate your interest in Sukanya Samriddhi Yojana Scheme.
I = P(1+R/100) ^N
I = Interest
P= Principle Invested
R= Rate of Return
N= Number of Years
It is essential to understand the interest rate and the compounding frequency associated with the Sukanya Samriddhi Yojana scheme. To calculate the interest on the scheme, follow these steps:
Determine The Deposit Amount
The scheme allows a minimum annual deposit of ₹250 and a maximum of ₹1,50,000. Choose an amount within this range that suits your financial capabilities.
Calculate The Interest For The First Year
To calculate the interest for the first year, multiply the deposit amount by the annual interest rate. For example, if you deposited ₹50,000, the interest for the first year would be ₹50,000 * 0.076 = ₹3,800.
Calculate The Total Amount After The First Year
Add the deposit amount and the interest earned for the first year. In this case, the total amount would be ₹50,000 + ₹3,800 = ₹53,800.
Repeat The Process For Subsequent Years
Repeat the calculation process for each year until the desired period is reached or until the account matures, which is 21 years from the date of opening the account. Keep track of the yearly interest earned and the total amount accumulated.
The compound interest on the SSY account is calculated every year. If you do not want to calculate manually, you can check the Sukanya Samriddhi Yojana Calculator available online.
What is Sukanya Samriddhi Yojana Calculator?
Sukanya Samriddhi Yojana allows you to deposit regularly in the account and create a corpus that will be useful for your girl child. This investment is very safe as it is backed by the government and has a surety of returns.
Since it is safe, you can calculate an estimated amount that you can receive once the scheme matures. For this, you can use the Sukanya Samriddhi Yojana Calculator.
The SSY calculator operates on a straightforward principle of compounding interest. It considers the compound interest accrued on the initial investment and subsequent contributions made annually until the completion of the scheme’s tenure. By using the calculator, one can gain insights into the potential growth of their savings and make informed decisions accordingly.
Factors Considered by the Calculator:
Initial Deposit
The calculator takes into account the amount deposited at the beginning of the scheme.
Annual Contribution
The calculator factors in the yearly contributions made toward the account.
Duration
The scheme matures after completing 21 years from the date of opening the account. However, partial withdrawals can be made once the girl child reaches the age of 18.
Interest Rate
The calculator uses the prevailing interest rate, which is revised by the government on a quarterly basis. The interest is compounded annually and credited to the account.
How does Sukanya Samriddhi Yojana Account Work?
As parents, you can invest a minimum of Rs 1,000 and up to Rs 1.5 lakhs every year into your daughter’s account under the Sukanya Samriddhi Yojana. These deposits can be made only for the first 15 years after opening the account, after which the funds in the account would grow from the accumulated compound interest. The accumulated amount can help your daughter to achieve her dreams of higher education, starting a new venture or other major life goals.
To open a Sukanya Samriddhi Yojana account, the girl child should be below 10 years of age. Parents or legal guardians can open the account in any authorized post office or designated public or private sector bank. The account requires essential documents such as the birth certificate of the girl child, proof of identity and address of the parents/guardians, and a few passport-sized photographs.
Deposits
The account can be opened with a minimum initial deposit of ₹250, and subsequent deposits can be made in multiples of ₹100. The maximum annual deposit allowed is ₹1.5 lakh. Contributions can be made for a period of 15 years from the account opening date.
Tenure And Maturity
The account has a tenure of 21 years from the date of opening or until the girl child’s marriage, whichever is earlier. Upon maturity, the account holder receives the accumulated amount along with the accrued interest.
Interest Rate
The interest rate for Sukanya Samriddhi Yojana is revised quarterly by the Government of India. Historically, the interest rates have been attractive and higher than most other small savings schemes. The interest is compounded annually and credited to the account.
Tax Benefits
Contributions made to the Sukanya Samriddhi Yojana account are eligible for tax benefits under Section 80C of the Income Tax Act, 1961. Additionally, the interest earned and the maturity amount are tax-free, making it an attractive investment option.
Eligibility Criteria for Sukanya Samriddhi Yojana
The scheme allows parents or legal guardians to open an account under the Sukanya Samriddhi Yojana for a girl child from her birth until she attains the age of 10 years. The account can be opened at any time within this period.
Citizenship
Sukanya Samriddhi Yojana is available only to Indian citizens. Non-Resident Indians (NRIs) cannot open an account under this system. However, if a girl child becomes an NRI after opening the account, she can continue to operate the account until its maturity.
Number Of Accounts
Only one account is allowed per girl child under the Sukanya Samriddhi Yojana. In the case of multiple girl children, parents can open separate accounts for each of them, subject to meeting the age criteria.
Parental Consent
The scheme requires the consent of the parent or legal guardian to open an account on behalf of the girl child. The parent or guardian will act as the account operator until the girl child reaches the age of 18 years.
Account Closure
The account under Sukanya Samriddhi Yojana can be closed before maturity if the girl child gets married after attaining the age of 18 years. In such cases, the account can be closed by submitting the necessary documents to the bank or post office where the account is held.
Benefits of Sukanya Samriddhi Yojana
High Interest
Sukanya Samriddhi Account provides a higher rate of interest than other Savings Plans that offer financial security for the girl child. Each financial year, the government declares the applicable interest rate for that year, while the interest on your investments is compounded yearly. By maturity, the assets under your Sukanya Samriddhi Yojana account will increase manifold – thanks to the power of compounding.
Significant Tax Savings
Your contributions towards the Sukanya Samriddhi Yojana for your daughter’s future are eligible for tax deductions under Section 80C of the Income Tax Act 1961. Thus, you can claim tax deductions up to Rs 1.5 lakh invested in the scheme. Moreover, tax-saving benefits are also available on the interest earned and the amount received upon maturity or withdrawals. The Sukanya Samriddhi Yojana is under the authority of the Department of Revenue (DOR) and is one of the more popular investment schemes that come with the exempt-exempt-exempt (EEE) status.
Guaranteed Maturity Benefits
Upon maturity, your account balance under the Sukanya Samriddhi Yojana, including the accumulated interest, will be paid directly to the girl child (or policyholder). Thus, the scheme essentially helps your daughter becomes financially independent and empowered once she is mature enough to make life decisions on her own. Another benefit of investing under the Sukanya Samriddhi Yojana is that your accumulated savings continue to accrue compounding interest even after maturity until it is finally closed by the account holder.
Tax Benefits of Sukanya Samriddhi Yojana
If you have an account under SSY then you are eligible to avail of tax benefits on deposits. Let’s take a look at the tax benefits provided by Sukanya Samriddhi Yojana.
- Since an SSY account is a type of investment, it is eligible for deductions provided u/s 80C of the Income Tax Act. You can avail of a deduction of up to Rs 1,50,000.
- The compound interest that is accumulated in your deposit account is also exempt from tax.
- The withdrawals are also tax-free. Thus, once your account matures you can withdraw the amount without deduction.
Thus, all these tax benefits make Sukanya Samriddhi Yojana an E-E-E instrument. That is, Exempt-Exempt-Exempt.
Key Features of Sukanya Samriddhi Yojana (SSY)
Sukanya Samriddhi Yojana was introduced to help the parents of the girl child build a corpus for her that could help in achieving goals such as education and marriage. Consider the below features of the SSY account:
| Features | Details |
|---|---|
| DEPOSIT LIMIT | – Minimum Deposit: Rs 250 (Initial Deposit), Further deposits in multiples of 50 – Maximum Deposit: Rs 1,50,000 |
| ACCOUNT HOLDER | – If the girl child is below the age of 10 years, then the account will be handled by the parent/guardian of the girl. – A Girl can take control of the a/c once she turns 18 |
| MATURITY | 21 years after opening the account. You have to deposit for at least 15 years |
| DOCUMENTS REQUIRED | – Birth Certificate of the girl child – Form-1 – PAN/AADHAR of the Parent/Guardian |
| DEPOSITS | Deposits can be made through the following: – online transfer/NEFT – demand draft – cash – cheque |
How to Open Sukanya Samriddhi Yojana?
You can open a Sukanya Samriddhi Account by visiting any of the following:
- Banks
- Post office
Here are the steps you can follow to open your Sukanya Samriddhi Account
- Visit your Bank or nearest post office
- Fill out the application form for the Sukanya Samriddhi Yojana. This is known as FORM SSA-1. You will be provided with this form by the bank or the post office you visit.
- You can also download the form and fill it out beforehand.
- After filling out this form, you need to submit the necessary documents. These include:
a) Birth certificate of the girl child for which you want to open the account.
b) Identity Proof of the parent/guardian: AADHAR card, PAN card, Voter ID, etc.
c) Address Proof: License, Telephone bill, etc. - Pay your first deposit. You must deposit a minimum amount of Rs 250. You can deposit up to Rs 1.5 lakhs
- After submitting all the documents, the bank will take some days to process your application.
- After verification, your SSY account will be opened. You will be issued a passbook
How to Open Sukanya Samriddhi Yojana Account in Post Office?
You can open your SSY account in a Post Office or a bank.
Visit your nearest Post Office (PO):
- Fill out the account opening form provided by the Post Office Savings Bank
- Attach your ID proof, Address proof, and other related documents with the application form
- Deposit the sum (it should be more than Rs 250)
- Wait for the processing of the application
- After processing your account will be opened and you will be issued the passbook
How to Submit Documents for Sukanya Samriddhi Yojana?
Before your Sukanya Samriddhi Account can be opened, you need to submit some documents to validate your identity. As of now, you cannot submit these documents online, so you have to visit your nearest bank or post office to do the same.
Here are the documents you require:
For the Girl Child
- Birth certificate
- Form SSA-1
For the Parent
- Identity Proof: PAN Card, AADHAR card
- Address Proof: Driving License, Telephone bill, electricity bill
Though only these documents are required, the relevant bank can ask you for proof of other documents as well.
How to Pay for Sukanya Samriddhi Yojana Online?
One of the convenient aspects of the scheme is the ability to make online payments for deposits, making it easier for account holders to contribute towards their child’s future. We will guide you through the process of paying for Sukanya Samriddhi Yojana online.
Step 1: Ensure You Have An Active Sukanya Samriddhi Yojana Account
It is important to have an active Sukanya Samriddhi Yojana account for the girl child. This account can be opened at any designated bank or post office authorized to offer the scheme.
Step 2: Register For Internet Banking Or Mobile Banking
To make online payments for Sukanya Samriddhi Yojana, you need to have Internet banking or mobile banking facilities activated for your bank account. If you haven’t registered for these services, visit your bank’s website or contact the bank branch to complete the registration process. Most banks provide easy online registration options for their customers.
Step 3: Log In To Your Bank’s Internet Banking Portal Or Mobile Banking App
Once you have registered for Internet banking or mobile banking, visit your bank’s official website or open the mobile banking app on your smartphone. Enter your login credentials, such as username and password, to access your account.
Step 4: Locate The Bill Payment Or Fund Transfer Option
After logging in, navigate to the section where you can make bill payments or transfer funds. This option might be labeled differently across different banking platforms, so look for terms like “Payments,” “Transfer,” or “Bill Pay.”
Step 5: Add Sukanya Samriddhi Yojana As A Payee
Within the bill payment or fund transfer section, search for the option to add a new payee or beneficiary. Here, you will need to provide the necessary details of your Sukanya Samriddhi Yojana account, such as the account number and the name of the bank or post office where the account is held. Ensure that you enter the correct details to avoid any payment issues.
Step 6: Verify The Added Payee
Once you have added Sukanya Samriddhi Yojana as a payee, your bank might require you to verify the details. This could be done through an OTP (One-Time Password) sent to your registered mobile number or any other authentication method specified by your bank. Follow the instructions provided by your bank to complete the verification process.
Step 7: Initiate The Payment
Once the payee has been successfully added and verified, you can proceed with initiating the payment. Enter the desired amount you wish to deposit into the Sukanya Samriddhi Yojana account. Review the payment details and ensure they are accurate before confirming the transaction.
Step 8: Acknowledgment And Confirmation
After initiating the payment, you will receive an acknowledgment or confirmation of the transaction. This confirmation may include a transaction reference number, which you should keep for future reference. It is advisable to take a screenshot or note down the details for record-keeping purposes.
What Happens if You Pay Less or Excess Amount for Sukanya Samriddhi Yojana?
SSY offers attractive interest rates and tax benefits, making it an attractive investment option for parents and guardians. However, it is crucial to understand the implications of paying less or excess amounts into the Sukanya Samriddhi Yojana account.
Let us explore what happens if you pay less or more than the prescribed amount for Sukanya Samriddhi Yojana.
Paying Less Amount
If you pay less than the required amount for a particular financial year, it may lead to the following consequences:
a. Defaulting on minimum deposit
The minimum deposit for Sukanya Samriddhi Yojana is ₹250 per financial year. Failure to make this minimum deposit may result in the account being classified as “inactive.” To reactivate the account, you will have to pay a penalty of ₹50 per year, along with the minimum deposit amount for each year of default.
b. Reduced maturity amount
The overall maturity amount of the Sukanya Samriddhi Yojana account depends on the cumulative deposits made over the years. Paying less than the prescribed amount will naturally reduce the maturity amount. This can affect the financial goals and aspirations you have set for your child’s future.
c. Missed tax benefits
One of the key advantages of the Sukanya Samriddhi Yojana is the income tax exemption on contributions made under Section 80C of the Income Tax Act. However, if you pay less than the specified amount, you may miss out on the full tax benefits available.
Paying Excess Amount
While it is advisable to make regular contributions to the Sukanya Samriddhi Yojana, paying an excessive amount may have the following implications:
a. No additional interest
The interest rate offered on the Sukanya Samriddhi Yojanais determined by the government and is subject to change from time to time. Deposits made above the prescribed amount do not earn any additional interest. Therefore, contributing more than required will not yield any extra financial benefits in terms of interest.
b. Utilization restrictions
The primary objective of the Sukanya Samriddhi Yojana is to secure the girl child’s future education and marriage expenses. While excess payments do not have any negative consequences, they may limit your ability to invest in other financial instruments or meet other financial goals.
c. No tax benefits on the excess amount
While contributions up to ₹1.5 lakhs per financial year are eligible for tax benefits under Section 80C, any amount in excess of this limit will not qualify for additional tax deductions. It is important to note the maximum allowable limit to ensure you optimize your tax planning effectively.
Withdrawal Rules for Sukanya Samriddhi Yojana
Sukanya Samriddhi Yojana Account has a maturity period of 21 years from the date of opening. But you are allowed to withdraw from your funds if conditions are met. Here are some of the rules regarding when and how much can you withdraw your funds.
- The girl child can withdraw the whole corpus created after the maturity of the account including the interest earned. This withdrawal is without any tax restriction.
- The withdrawal will only be allowed after you fill out the withdrawal form and submit all the necessary documents such as
- Identity Proof
- Address Proof
Withdrawal for Education
- You can withdraw for academic purposes if your child reaches the age of 18 years or completed the 10th standard education. For this, you need to submit the appropriate documents related to admission such as
- Confirmed admission offers from the college/university
- Copy of fee slip
- The maximum amount that you can withdraw is capped at 50% of the amount available as of the previous year.
Rules for Premature Withdrawal from Sukanya Samriddhi Yojana
While the primary objective of SSY is to encourage long-term savings, there may be situations where premature withdrawal becomes necessary. However, it is crucial to understand the rules and regulations surrounding premature withdrawals from Sukanya Samriddhi Yojana to avoid any penalties or loss of benefits. Here are the key points to consider:
Lock-In Period
Sukanya Samriddhi Yojana has a lock-in period of 21 years from the date of opening the account. Therefore, premature withdrawals are generally not permitted before the account reaches maturity. However, there are certain exceptional circumstances in which early withdrawals may be allowed.
Education Needs
One of the permitted grounds for premature withdrawal is to meet the higher education expenses of the account holder. This withdrawal can only be made when the girl child has attained the age of 18 years or has passed the 10th standard, whichever is earlier. The withdrawal amount is limited to a maximum of 50% of the balance at the end of the preceding financial year.
Medical Expenses
In the case of life-threatening diseases or severe medical emergencies, premature withdrawal can be made. The withdrawal amount is restricted to the extent of the actual medical expenses incurred, as certified by the medical authority or hospital. Proper documentation and proof of medical need are essential in such cases.
Death Of The Account Holder
In the unfortunate event of the death of the account holder, premature closure is permitted, and the entire balance, along with accrued interest, is paid to the nominee or the legal heir. The account must be closed within a month of the account holder’s death, and the nominee must provide the necessary documentation to claim the funds.
Account Transfer
In situations where the account holder needs to relocate due to the girl child’s marriage or change of address, the account can be transferred from one post office or authorized bank to another. This transfer does not count as a premature withdrawal, and the funds remain intact, allowing the account to continue until maturity.
Penalty And Interest Adjustment
In case of premature withdrawal, the interest on the withdrawn amount will be adjusted at the rate applicable to the Post Office Savings Account. Additionally, a penalty of 1.5% will be levied on the whole deposit amount for any premature closure or withdrawal.
It is essential to note that premature withdrawals from Sukanya Samriddhi Yojana should be a last resort and exercised only when genuinely necessary. The scheme aims to promote long-term savings for the girl child’s future, and any premature withdrawal may lead to a substantial loss of benefits, including interest and tax advantages. Therefore, it is advisable to consider alternative sources of funding before resorting to early withdrawals.
How to Transfer Sukanya Samriddhi Yojana Account?
You can transfer your Sukanya Samriddhi Yojana Account from Post Office to a Bank. This process can be performed by the guardian or the parent itself. Here’s how you transfer your account.
- Visit the Post Office in which you have your SSY account and inform the executive about transferring your account
- Fill out the transfer application and submit the following documents
- ID proof
- Passbook
- KYC (Know Your Customer) documents
- Move to the bank you want to open the SSY account with
- Self-Attest the KYC documents and the form and submit them to the bank
- You will be provided with a new passbook after the verification and processing of the documents
Details of Sukanya Samriddhi Yojana Account Passbook
A passbook is issued to you after all the formalities have been taken care of and your account has been opened. The passbook is a small booklet issued by the bank or a post office that contains a record of all the transactions that you have done through your account. It contains the following details.
- Your deposits to the account
- withdrawals from your account
- interest generated
Apart from this it also contains your personal information such as your name and account number and opening date.
Empower your Daughter through Sukanya Samriddhi Yojana
Sukanya Samriddhi Yojana provides one of the best investment opportunities for you to build up a sufficient corpus for your daughter when she turns 18 years old. The Sukanya Samriddhi Yojana comes with a sovereign guarantee, while its EEE status implies that it provides several benefits to both the parent and the girl’s children. Thus, you can invest a portion of your savings towards the Sukanya Samriddhi Yojana to earn compounding benefits on your contributions so that your daughter can financially support her dreams of higher education and marriage despite inflationary pressures.
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