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As part of the Beti Bachao Beti Padhao campaign, Prime Minister Narendra Modi launched a scheme called ‘Sukanya Samriddhi Yojana (SSY)’, the campaign literally translates to ‘Girl Child Prosperity Scheme’ in line with the above objectives. Here are highlights of the Sukanya Samriddhi Yojana.
|Investment value||Minimum value – Rs.250 and Maximum value – Rs.1.5 lakh per annum|
|Current yearly interest rate||7.6% per annum|
|Maturity value||Would vary depending upon the value invested|
|Maturity duration||21 years from the date of investment|
In order to majorly address the issue of the declining child sex ratio in our country, the Government of India launched a social campaign on January 22, 2015. The Beti Bachao Beti Padhao (BBBP) campaign sends the message ‘Save girls, educate the girl child’. This is a national initiative jointly run by the Ministry of Women and Child Development, the Ministry of Health and Family Welfare, and the Ministry of Human Resource Development.
BBBP aims at achieving the following:
SSY aims at tackling a major problem associated with the girl child – education and marriage. It is focused on securing a bright future for the girl child in India by facilitating the parents of a girl child in building a fund for the proper education and carefree marriage expenses of their child. SSY has introduced the Sukanya Samriddhi Account for this very purpose.
|Particulars||Provisions as per the SSY Rules 2016|
|Who would be the beneficiary of the SSY account||Any girl child who is a resident Indian, from the time of opening the account, till the time of maturity/closure|
|Who can open the account?||Parents or legal guardians of a girl child who has not attained the age of 10 years, can open the account|
|Who can deposit and operate the account?|| Either the guardian or the girl child (if she has attained the age of 10 years) may deposit the amount and operate the account |
The account shall be mandatorily operated by the girl child after she attains the age of 18 years.
|Number of accounts|| Only one account per girl child |
Accounts can be opened for a maximum of two girl children in one family, (including adopted children)
Accounts for more than two girl children are allowed in case of more than two girls being born in the first order of birth, or in a scenario of one girl child in the first order of birth, and twins or more than twins in the second-order of birth
|Where can an SSA account be opened?||In any post office or authorized branch of commercial banks|
|Documents required to open the Account|| Birth certificate of the girl child |
Identity and residential proof of the guardian
Medical certificate for proof of birth of multiple girl children on a single order of birth
Any other documents as required by the post office or banks
|When can an SSA account be opened?||Any time between the birth of the girl child till the time she attains the age of 10 years|
|Deposit threshold and tenure|| Minimum of Rs 250 (this amount was previously Rs 1,000), and a maximum of Rs 1,50,000 in every financial year, up to 15 years|
Multiples of Rs 100, subject to the above cap
|Mode of Deposit||Through cash, cheque, demand draft or online transfer|
|Interest on deposits|| The rate of interest for the 2nd quarter of FY 2021-2022 i.e. 1 July 2021 to 30 September 2021 is 7.6% p.a. |
The entire deposit in ‘Account under default’ (where a minimum amount of Rs 250 has not been deposited), which is not regularised within the prescribed time, would earn interest on the post savings bank account; except if the default is due to the death of the guardian who opened the Account
No interest is payable after the completion of tenure of the SSY, i.e after 21 years from account opening
No interest accrues after the girl child becomes a non-citizen or a non-resident of India
|Consequences of excess or short deposit|| Excess – Any deposit above the maximum cap will not earn any interest and can be withdrawn anytime by the depositor |
Shortage – Account shall be considered as ‘Account under default’ if no minimum deposit is made in a financial year, and can be regularised within 15 years of Account opening on payment of a penalty of Rs 50 per default year
|Tenure of SSA||21 years from the account opening date|
|Rules pertaining to the closure of SSA||Closure on maturity|
Account matures after completion of tenure of 21 years and the balance in the SSA, including interest, is paid to the child on submitting an application and proof of identity, residence, and citizenship documents
Premature Closure Allowed only in the following situations:
Reasons of intended marriage after a girl child attains the age of 18 years, an application can be submitted between one month prior to marriage and 3 months after marriage along with her age proof documents
Death of the girl child on the production of the death certificate the balance in the SSA will be paid to the guardian
Deemed closure in case of a change in the status of girl child i.e., girl child either becomes a non-resident or a non-citizen of India. Such a status change shall be communicated by the girl child or her guardian within one month of the status change
After completion of 5 years from the opening of an SSA, if the post office or bank is satisfied that the operation or the continuation of the SSA is causing undue hardship to the girl child (such as the death of the guardian, medical reasons of the girl child), the girl child or guardian may order for premature closure
For any other reasons, if the SSA is to be closed anytime after the opening of this account, it will be permitted, but the entire deposit would only earn an interest rate applicable to the post office savings bank
|Withdrawal|| This is allowed for purposes of higher education if the girl child has either attained 18 years or completed 10th standard of the school, for meeting the actual fee or other charges required at the time of admission |
Documentary proof by way of a confirmed offer of admission in an educational institution, or a fee slip shall accompany the application for withdrawal
Withdrawal has a maximum cap of 50% of the balance in the SSA at the end of the preceding financial year. This can be made in either one lump sum or in 5 instalments
|Transfer of balance of the SSA||Balance in the SSA can be transferred anywhere in India – from or to post offices, from or to banks, and between post offices and banks free of cost. This can be done upon furnishing proof of a change of residence of either the guardian or the girl child. Under any other circumstance, such a transfer can be made by paying a fee of Rs 100.|
In order to encourage investments in SSY, the SSA has also been provided with certain tax benefits:
You can open a Sukanya Samriddhi Yojana (SSY) account with a participating bank or a Post Office branch. You need to follow the below procedure to open the account.
Sukanya Samriddhi Yojana comes under the Ministry of Women and Child Development.
Contributions made towards Sukanya Samridhhi Yojana can be considered for income tax deduction under Section 80C of the Income Tax Act, 1961.
Here is how the Post Office account opening form looks like:
In order to fill the form, you can follow these steps:
As of now, there is no way you can apply for or open a Sukanya Samriddhi Yojana account online.
You can open a Sukanya Samriddhi Yojana account either with a participating bank or a Post Office branch. You can visit the respective banks’ website to find the links for appying for the SSY. The participating banks are:
You have to download the IPPB app on your smartphone to make online payments towards your SSY account. Through this app, you can set standing instructions so that a specified amount will be transferred online to your SSY account. Here is the step-by-step procedure:
Step 1: Transfer money from your bank account to the IPPB account.
Step 2: On the IPPB app, go to DOP Products and choose the Sukanya Samriddhi Yojana account.
Step 3: Enter your SSY account number and the DOP customer ID.
Step 4: Choose the amount you would like to pay and the instalment duration.
Step 5: IPPB will notify you of the success of setting up the payment routine.
Step 6: Each time the app makes the money transfer, you will be notified of the same.
Sukanya Samriddhi Yojana was launched by Prime Minister Narendra Modi on 22 January 2015 in Panipat, Haryana.
You can open an SSY account at any of the participating banks. It is more convenient for you to open the SSY account with the bank where you already hold a savings account if it is one of the participating banks. The participating banks are:
You have to walk down to the Post Office or a bank branch where you have submitted the SSY application to submit the documents and proofs. You need to submit a physical copy of the following documents:
The interest for the SSY account is calculated on the lowest balance for the calendar month, i.e. between the fifth day of the month and the end of the month. The interest will be credited once, at the end of each financial year.
Generally, you can use the below formula to calculate the interest earned on an SSY account:
A = P(1+r/n)^nt
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 accrued on an SSY account is compounded on a yearly basis, it may not be a simple task to manually calculate the interest. Instead, you can use our Sukanya Samriddhi Yojana Calculator to arrive at 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 deposit money in an SSY account either once per financial year or in smaller, regular instalments. However, you need to make a minimum payment of Rs.250 per financial year to keep the account active and running and follow this criterion for a minimum payment period of 15 years.
If you choose to make deposits in instalments, the interval between the instalments can be anything as per your convenience. There is no restriction on the number of deposits you can make in a month or in a financial year.
You must submit the duly filled withdrawal form along with the SSY account passbook to the bank or Post Office branch where the account is maintained.
In order to claim or withdraw prematurely, you need to satisfy some conditions, such as for marriage expenses or for the higher education of the girl child.
Upon maturity of the account, the amount will be paid to the girl child holding the account.
In another case, you may prematurely close the account and claim the deposit amount only after completing five years of account opening, for the following reasons:
Only one account can be opened per girl child, either in Post Office or in any bank. This account can be opened for a maximum of two girl children in a family. Only in the case of twins or triplets girls’ birth, more than two accounts can be opened in a family.
Only the girl child, in whose name the account is opened, can withdraw the money from her SSY account upon maturity. The guardian can withdraw the money if the girl child has not attained the age of 18 years.
You can invest any amount from Rs.250 up to Rs.1.5 lakh per financial year in the SSY account.
The SSY account must be opened from the time of girl childbirth but before the girl child attains the age of 10 years.
In order to transfer SSY account from Post Office (PO) to a bank, follow these instructions:
The payment period for SSY accounts is 15 years, while the maturity period of the account is a minimum of 21 years.
PPF is a government-backed retirement saving scheme whereas, SSY is a government-backed small savings scheme dedicated to girl child development. Both accounts provide tax benefits. While a PPF account can be opened by anybody, an SSY account can only be opened in the name of a girl child before she attains the age of 10 years. PPF balance can be liquidated to a certain extent, while the same may not be true for the SSY account.
Both schemes are designed for different purposes and therefore, picking a better option between the two schemes is tough. Here is a table that gives a comparative picture of both schemes.
|Parameters||Public Provident Fund (PPF)||Sukanya Samriddhi Yojana (SSY)|
|Minimum Deposit per Financial Year||Rs.500||Rs.250|
|Maximum Deposit per Financial Year||Rs.1.5 lakh||Rs.1.5 lakh|
|Eligibility Criteria||Any single adult who is a resident Indian||Girl child below the age of 10 years|
|Maturity Period||15 years||21 years|
|Payment Period||15 years||15 years|
|Interest Rate||7.1% p.a. (Q2 of FY 2021-22); Compounded yearly||7.6% p.a. (Q2 of FY 2021-22); Compounded yearly|
|Tax Benefits||EEE benefit||EEE benefit|
|Premature Withdrawal||Upon completing five financial years||Upon the girl child attaining 18 years|
The maturity amount of an SSY account depends on the contributions you make every year. Further, you can prematurely withdraw 50% of the deposit amount once the girl child attains 18 years of age either for educational purpose or for marriage expenses.
A passbook will be issued upon opening the SSY account with a bank or Post Office. You can visit the bank or PO branch where the account is held and get the updated information regarding the account balance printed on the passbook.
Not all banks allow you to access SSY account details online. Check if the bank your account is held with provides this service. If it does, request the bank executive to provide login ID and password to access your SSY account online.
The minimum amount required to open an account under SSY scheme is Rs.250.
Life Insurance Corporation (LIC) is known for providing life insurance products to its customers. One of its products, LIC Kanyadan, is comparable with the benefits offered by SSY. Both the schemes offer financial protection for girl children and look to cover education and marriage expenses for them.
One thing to note here is that an SSY account can only be accessed by the girl child once she attains 18 years of age, while LIC Kanyadan does not provide access to the girl child at all until the father’s death.
Here are a few more differences between the LIC Kanyadan scheme and SSY.
|Parameters||LIC Kanyadan Scheme||SSY|
|Account/Policy Ownership||Policy is to be purchased in the name of the father of the girl child||Account is to be opened in the name of the girl child, maintained by the guardian until she reaches 18 years of age|
|Eligible Nationality||Any father of a girl child||Resident Indians only|
|Age Eligibility||Father: 18 years to 50 years Daughter: minimum of 1 year||Before the girl child attains 10 years of age|
|Loan Facility||Can be availed after making premium payments for three consecutive years||Not available|
|Premium/Deposit Limit||No maximum limit||Minimum Rs.250 up to Rs.1.5 lakh per fiscal year|
|Maturity Amount||Minimum Rs.1 lakh with no maximum limit||Based on the deposits made|
Prime Minister Narendra Modi introduced Sukanya Samriddhi Yojana.
No, the maturity amount from the SSY account is not taxable, its exempt from tax.
You can claim deduction under Section 80C upto a maximum of Rs.150000 for the amount deposited in the SSY account.
Sukanya Samriddhi Scheme is a dedicated scheme for the empowerment of and the secured future of the girl child. Every parent must consider investing in this scheme as it also doubles as a good tax-saving instrument.