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. It was launched on 22 January 2015 in Panipat, Haryana.
|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.
Opening SSY account
Only one SSY account for a girl child can be opened. SSY accounts can be opened in any post office or authorized branch of commercial banks. It can be opened any time between the birth of the girl child till the time she attains the age of 10 years.
Beneficiary of SSY
Any girl child who is a resident Indian is a beneficiary under SSY from the time of opening the account till the time of maturity/closure.
Deposits under SSY
The guardian can deposit the amount and operate the account till the girl child attains the age of 18. The SSY account shall be mandatorily operated by the girl child after she attains the age of 18 years. The minimum deposit amount for an SSY account is Rs.250 (this amount was previously Rs.1,000), thereafter in multiples of Rs. 50, and the maximum is Rs.1,50,000 in every financial year, up to 15 years. Deposits can be made through cash, cheque, demand draft or online transfer.
Interest on deposits
The rate of interest for the 4th quarter of FY 2022-2023 i.e. 1 January 2023 to 31 March 2023 is 7.6% p.a. The entire deposit in ‘Account under default’ (where a minimum amount of Rs.250 per year has not been deposited), which is not regularised within the prescribed time, would earn interest till the maturity date of the account. ‘Account under default’ can be regularised within 15 years of Account opening on payment of a penalty of Rs.50 per default year.
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. Any deposit made above the maximum cap, i.e. Rs.1,50,000 per year will not earn any interest and can be withdrawn anytime by the depositor
Maturity period of SSY
The maturity period of SSY is 21 years from the account opening or upon her marriage after attaining 18 years. However, contributions have to be made for only 15 years. Thereafter, the SSY account will continue to earn interest until maturity even when no deposits are made into it.
In order to encourage investments in SSY, the SSA has also been provided with certain tax benefits:
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.
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 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:
Here is how the SSY account opening form looks like:
In order to fill the form, you can follow these steps:
You can open a Sukanya Samriddhi Yojana account either with a participating bank or a Post Office branch. It is more convenient for you to open an SSY account with the bank where you already hold a savings account if it is one of the participating banks. You can visit the respective banks’ websites to download the SSY Account Opening Application Form. You need to fill the form and submit it to the participating bank to open the SSY account. 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:
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.
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 marriage expenses or for the higher education of the girl child when she has attained 18 years.
Withdrawal can also be made from the account up to 50% of the balance available at the end of the previous F.Y. when the girl is above 18 years or has passed 10th standard to meet education expenses, such as fees or other such charges. A documentary proof by way of a confirmed offer of admission in an educational institution, or a fee slip shall accompany the application for withdrawal.
Maximum one withdrawal can be made in a year, in a lump sum or in 5 instalments, subject to the ceiling specified and to the actual requirement of fee/other charges.
Closure on maturity
Account matures after completion of 21 years of the girl child and the balance in the SSY, including interest, is paid to the child on submitting an application and proof of identity, residence, and citizenship documents.
Premature closure is allowed only in the following situations:
In order to transfer SSY account from Post Office (PO) to a bank, follow these instructions:
The balance in the SSY 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.
Public Provident Fund (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 20221-232); Compounded yearly||7.6% p.a. (Q4 of FY 2022-23); Compounded yearly|
|Tax Benefits||EEE benefit||EEE benefit|
|Premature Withdrawal||Upon completing seven five financial years||Upon the girl child attaining 18 years for marriage or higher education|
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|
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.
As of now, there is no way you can apply for or open a Sukanya Samriddhi Yojana account online.
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.
Only one account can be opened per girl child, either in the 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.
The payment period for SSY accounts is 15 years, while the maturity period of the account is a minimum of 21 years.
You can invest any amount from Rs.250 up to Rs.1.5 lakh per financial year in the SSY account.
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.
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.
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.