Sukanya Samriddhi Yojana (SSY): Interest Rate 2023, Eligibility, Taxation

Sukanya Samriddhi Yojana ( सुकन्या समृद्धि योजना ) is a government-backed small savings scheme for the benefit of girl child. It is a part of the Beti Bachao, Beti Padhao Yojana and can be opened by the parents of a girl child below the age of 10. SSY account can be opened at designated banks or post offices. Sukanya Samriddhi Account has a tenure of 21 years or until the girl child marries after the age of 18. The SSY scheme comes with a higher interest rate along with several tax benefits. Read the complete article to know more Sukanya Samriddhi Yojana details.

Sukanya Samriddhi Yojana Interest Rates 2023

SSY Interest Rates are declared by the government quarterly. For Q1 (April – June) FY 2023-24, the interest rates have been set at 8% p.a.

Click here to check the historical Sukanya Samriddhi Yojana (SSY) interest rates.

Sukanya Samriddhi Yojana Eligibility

• Only parents or legal guardians of a girl child can open an SSY account
• The girl child has to be below the age of 10 at the time of account opening
• Only one account can be opened in the name of a girl child
• Only two SSY accounts are allowed for a family i.e. one for each girl child

Note: Sukanya Samriddhi Account can be opened for more than two girls in some special cases which are-

• 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 can be opened
• If a girl child is born after the birth of twin or triplet girls, a third SSY account cannot be opened

Aadhaar and PAN Now Mandatory for SSY Account

• As per the latest notification issued by the Finance Ministry, it is mandatory to provide your Aadhaar number and PAN to open a new SSY account. If you have not been assigned an Aadhaar yet, you need to provide proof of application of enrollment for Aadhaar or enrollment ID at the time of opening the account and furnish the Aadhaar number to the Accounts Office within 6 months from the date of account opening.
• In case you already have an existing Sukanya Samriddhi Yojana account and have not submitted your Aadhaar number, you need to submit the same within a period of 6 months with effect from 1st April 2023. Moreover, in case you have not submitted your PAN at the time of account opening, you need to submit the same within a period of 2 months from the date of happening of any of the following events, whichever is earliest, namely:

– The balance at any point of time in the account is more than Rs. 50,000

–  The aggregate of all credits in the account in any financial year exceeds Rs. 1 lakh

–  The aggregate of all withdrawals and transfers in a month from the account exceeds Rs. 10,000

• In case you fail to submit Aadhaar within the specified period of 6 months and PAN within the specified period of 2 months your account will become inoperational till the time Aadhaar number and/or PAN is submitted to the accounts office

Note: We have taken this information from The Gazette of India. To know more, click on https://egazette.nic.in/WriteReadData/2023/244822.pdf

Benefits of Investing in Sukanya Samriddhi Yojana 

Sukanya Samriddhi Yojana introduced as part of the Beti Bachao, Beti Padhao Yojana initiative, provides investors with a range of benefits. Some of the key Sukanya Samriddhi Yojana benefits are as follows:

High Interest Rate- SSY offers a higher fixed rate of return (currently 8% per annum for Q1 FY (2023-24) as compared to other government-backed tax saving schemes such as PPF.

Guaranteed Returns- Since SSY is a government-backed scheme, it provides guaranteed returns.

Tax Benefit- SSY provides tax deduction benefits under Section 80C up to Rs. 1.5 lakh annually.

Flexible Investment- One can make a minimum deposit of Rs. 250 in a year and a maximum deposit of Rs. 1.5 lakh in a year. This ensures people with different financial standing can invest in the SSY scheme.

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

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

Sukanya Samriddhi Yojana Deposit Limits

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

Sukanya Samriddhi Yojana Tenure/Maturity Period

Post Office Sukanya Samriddhi Yojana has a tenure equal to the time the girl child is 21 years of age or upon her marriage after attaining the age of 18 years. However, contributions only need to be made for 15 years. Thereafter the SSY account continues to earn interest until maturity even if no deposits are made into it.

Other Key Features of Sukanya Samriddhi Yojana 

• If an SSY account holder is unable to make even the minimum deposit of Rs. 250 in a financial year, his/her account will be termed as a ‘Default Account’. Till the maturity date, this default account will earn the interest rate as applicable in the scheme. The defaulted account can, however, also be revived prior to the completion of 15 years of account opening by paying at least Rs. 250 + Rs. 50 for each defaulted year.
• A girl child can operate her own account after the age of 18 years. Once she is 18 years old, she is eligible for operating the SSY after submitting all the necessary documents to the post office/bank where the account is being held.
• Withdrawal can also be made from the account up to 50% of the balance available at the end of the previous F.Y. once the girl is above 18 years of age or has passed 10th standard to meet expenses relating to higher education such as fee or other such charges. Maximum one withdrawal can be made in a year, in lump sum or in instalments, for a maximum of 5 years, subject to the ceiling specified and to the actual requirement of fee/other charges.

Also Read: Sukanya Samriddhi Yojana V/S Public Provident Fund

Premature Closure of Sukanya Samriddhi Yojana Account

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

Closure of SSY Account due to Untimely Death of the Accountholder

In case the registered girl child unfortunately dies, the parents or the legal guardian are eligible to claim the final amount on the account and accrued interest as well. The amount will be handed over to the nominee of the account immediately. Also, the parents or legal guardians are required to submit the relevant documents verifying the death of the account holder duly attested by the concerned authorities.

Closure of SSY Account due to Inability in Continuing the Account

The Sukanya Samriddhi Account can be prematurely closed if there is any kind of direction from the central government regarding the inability of the depository to carry forward the account. The closure can also be processed in case the contribution towards the account is causing any kind of financial stress to the depositor. Moreover, proper permission from the competent authorities must be generated to process the closure and settlement of the account.

It is to be noted that the closing of the account under Sukanya Samriddhi Yojana will only be catered under extreme cases such as life-threatening diseases or medical emergencies.

How to Invest in Sukanya Samriddhi Yojana

You can invest in the Sukanya Samriddhi Yojana scheme through your nearby post office or designated branches of participating public and private banks. You will need to submit KYC documents like Passport, Aadhaar Card, etc. along with the required form 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 a nearby post office or participating public/private sector bank. Alternatively, you can also download the SSY New Account Application Form from the following sources:

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

While there are multiple sources for downloading the SSY application form, the fields in the form will be the same regardless of source.

How to Fill SSY Application Form

The SSY Application Form requires applicants to provide some key data regarding the girl child in whose name the investment will be made under the Beti Bachao, Beti Padhao Yojana. Details of the parent/guardian who will be opening the account/making deposits on her behalf are also required. The following are the key fields that are featured in the SSY Application Form:

• Name of Girl Child (Primary Account Holder)
• Name of Parent/Guardian opening the account (Joint Holder)
• Initial deposit amount
• Cheque/DD Number and Date (used for an initial deposit)
• Date of Birth of girl child
• Birth Certificate details of primary account holder (Certificate number, date of issue, etc.)
• ID Details of Parent/Guardian (Driving License, Aadhaar, etc.)
• Present and Permanent Address (as per ID document of parent/guardian)
• Details of any other KYC Documents (PAN, Voter ID card, etc.)

Once the above details have been filled out, the Sukanya Samriddhi Yojana form needs to be signed and submitted with the account opening authority (Post office/Bank Branch) along with copies of all applicable documents.

Tax Implication of Sukanya Samriddhi Yojana (SSY)

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

Transfer of Sukanya Samriddhi Yojana Account

One of the key benefits of the SSY Account is the fact that it is easily transferable from one part of India to another. Under existing rules, you can transfer this tax-saving deposit account for benefit of girl child from one India Post Office to another or from one designated bank branch to another with ease.

To initiate the transfer of your SSY account from a post office, you will have to fill out and submit the transfer request form with the Post Master of the India Post Office where your account is currently located. Similar transfer forms are available online as well as offline in case you want to transfer the deposit from one designated bank branch to another.

Similar Blog: Kanyashree Prakalpa Yojana

Sukanya Samriddhi Yojana Calculator

The benefit of any investment can only be determined based on how much the investment grows over time. The following is a sample calculation showing the high returns you can get by making contributions to the Sukanya Samriddhi Yojana.

Let’s assume the following example:

The girl child is born in 2020 and the parents start the SSY account for her in the same year. The account will finally mature after 21 years where the girl child will get the complete maturity amount.

• Annual investments = Rs. 1 lakh
• Investment Period = 15 years
• Total amount invested at the end of 15 years = Rs. 15 lakh
• SSY Interest rate for 1 year= 7.6%
• Interest at the end of 21 years= Rs. 3,10,454.12
• Maturity Value at the end of 21 years= Rs. 43,95,380.96

The table below shows the amortization schedule of the Sukanya Samriddhi Yojana as you may see in an SSY calculator.

Read more on Sukanya Samriddhi Yojana Calculator

Sukanya Samriddhi Yojana Interest Rates: Historical

FAQs

Q. Can I take a loan against the balance in the SSY account?
Ans. No. The facility of loan against SSY account balance is not currently available. You can avail the option of loan against PPF instead.

Q. Is premature closure of the Sukanya Samriddhi Yojana Account allowed?
Ans. Yes. Premature closure of the Sukanya account is allowed in certain cases. This may include compassionate grounds due to terminal illness, the unexpected demise of the primary account holder, etc. However, the decision to allow such closure is on a case to case basis.

Q. Can I continue investing in SSY if my daughter and I move to another country?
Ans. The SSY account will have to be closed if the girl child becomes an NRI or loses her Indian citizenship.

Q. What is the penalty if I miss my SSY account minimum annual payment?
Ans. There will be a penalty of Rs. 50 if the minimum amount of Rs. 250 is not deposited in the account during a financial year.

Q. Can I invest in Sukanya Samriddhi Yojana online?

At present, you can download the Sukanya Samriddhi Yojana form online. However, the application form and investment needs to be made at a nearby post office or designated branches of participating public/private banks

Q. Is there tax on SSY account interest?
Ans. No. SSY is a completely exempt (EEE) investment hence the principal amount invested, the interest earned as well as the maturity amount are all tax-exempt.

Also Read: Top 10 Government Girl Child Schemes in India