Sukanya Samriddhi Yojana (SSY) – Complete Guide

Sukanya Samriddhi Yojana (SSY), a government-backed initiative falling under the purview of the Ministry of Finance, is a strategic small-deposit scheme specifically designed to address the financial requirements of the girl child. This article aims to provide a comprehensive and pragmatic insight into the features and benefits of SSY.

What is Sukanya Samriddhi Yojana (SSY)?

The Sukanya Samriddhi Yojana, initiated in 2015 as part of the Government of India’s “Beti Bachao Beti Padhao” campaign, is a strategic endeavour to champion the education of girl children. This visionary scheme seeks to establish a savings fund for the girl child, with the accrued interest upon maturity enjoying exemption from income tax under Section 80C of the Income Tax Act.

Individuals can avail themselves of the benefits of Sukanya Samriddhi Yojana by opening accounts through various channels, including Post Offices, public sector banks, and select private sector banks such as HDFC Bank, ICICI Bank, and Axis Bank.

Operated jointly by the Ministry of Women and Child Development, the Ministry of Human Resource Development, and the Ministry of Health and Family Welfare, this scheme aligns with the overarching goals of the Beti Bachao Beti Padhao campaign. The SSY scheme, beyond its financial aspect, is intricately woven into the fabric of broader social objectives.

The core objectives of Sukanya Samriddhi Yojana are multi-faceted. Firstly, it strives to ensure the protection and survival of girls, recognising their vulnerability in certain societal contexts. Secondly, the scheme actively promotes increased participation of girls in the realm of education and beyond, fostering an environment where they can thrive. Lastly, it plays a pivotal role in mitigating the pervasive issues of sex determination and gender discrimination against children, thus contributing to the larger societal shift towards gender equality.

It advocates for financial prudence, educational empowerment, and social reform, which is why Sukanya Samriddhi Yojana emerges as a holistic initiative that secures the financial future of the girl child and contributes significantly to the broader vision of creating an equitable and empowered society.

Sukanya Samriddhi Yojana: Key Features

Let’s go through the main features of the scheme one by one;

Opening an SSY Account

A Sukanya Samriddhi Yojana (SSY) account, designed to secure the financial future of girl children, can be opened at any post office or authorised commercial bank branch. The window for initiating an account spans from the birth of the girl child up to the age of 10 years.

Beneficiary Eligibility

The SSY caters to resident Indian girl children as its beneficiaries, commencing from the time of opening the account until maturity or closure.

Deposits and Operation

Guardians can make deposits and manage the account until the girl child reaches the age of 18. Following this, the account transitions to mandatory operation by the girl child. The minimum deposit amount is Rs. 250, down from the previous Rs. 1,000, with subsequent deposits in multiples of Rs. 50. The maximum annual deposit is capped at Rs. 1,50,000 for up to 15 years. Deposits can be made through cash, cheque, demand draft, or online transfer.

Interest on Deposits

The current interest rate for the second quarter of FY 2023-2024 (July 1, 2023, to September 30, 2023) stands at 8% per annum. In the event of an ‘Account under default’ (failure to deposit the minimum Rs. 250 annually), interest accrues until the account’s maturity, provided the default is rectified within 15 years by paying a penalty of Rs. 50 per default year.

Interest ceases after the 21-year tenure from account opening. Non-citizenship or non-residency of the girl child also terminates interest accrual. Deposits exceeding the Rs. 1,50,000 annual cap do not earn interest and can be withdrawn at the depositor’s discretion.

Maturity Period

The maturity period for SSY spans 21 years from the account opening or upon the girl child’s marriage post her 18th birthday. Contributions, however, need only be made for 15 years. Even after this period, the SSY account continues to accrue interest until maturity, irrespective of further deposits.

Sukanya Samriddhi Yojana fosters financial security and embodies a commitment to the holistic development of girl children, aligning with the broader vision of empowering the nation’s future.

Eligibility for Sukanya Samriddhi Yojana

To avail of the benefits of the Sukanya Samriddhi Yojana (SSY), certain eligibility criteria must be met:

• Parent or Legal Guardian’s Role: The parent or legal guardian has the authority to open a Sukanya Samriddhi Yojana account on behalf of a girl child. This option is available until the girl child attains the age of 10 years.
• Resident Indian Status: The girl child for whom the SSY account is opened must be a resident Indian.
• Family Limits: A family is permitted to open a maximum of two Sukanya Samriddhi Yojana accounts, catering to the financial well-being of two girl children within the family.
• Special Provision for Twins: In the case of twin girls (two female children born in the same delivery), a third SSY account can be opened. This unique provision acknowledges the special circumstances of having twins.

The scheme promotes savings and encourages the holistic development of the girl child, aligning with the broader objectives of empowerment and education under the Beti Bachao Beti Padhao initiative.

Benefits of Sukanya Samriddhi Yojana

There are multiple benefits of this scheme. They are as follows:

• Affordable Payments: The minimum account balance required for maintaining a Sukanya Samriddhi Yojana account is Rs. 250 per fiscal year. Deposits can range up to Rs. 1.5 lakh per fiscal year, ensuring accessibility for individuals across all economic strata. Even if a payment is missed in a year, a nominal penalty of Rs. 50 is levied on the minimum payment of Rs. 250, allowing the account to continue.
• Educational Expenses Covered: Account holders can withdraw 50% of the balance from the previous financial year’s end to cover educational expenses for the girl child. This withdrawal is contingent upon providing proof of admission.
• Attractive Interest Rates: Sukanya Samriddhi Yojana accounts offer competitive interest rates, currently set at 8% per annum.
• Guaranteed Returns: Being a government-backed scheme, Sukanya Samriddhi Yojana provides assurance of returns upon maturity.
• Convenient Transfer: Account holders enjoy the flexibility of transferring Sukanya Samriddhi Yojana accounts seamlessly between banks and post offices anywhere in India.

Tax Benefits Under SSY

To encourage investments in Sukanya Samriddhi Yojana (SSY), the scheme offers significant tax benefits:

• Section 80C Deductions: Investments made in the SSY scheme qualify for deductions under Section 80C of the Income Tax Act. The eligible deduction amount is subject to a maximum cap of Rs 1.5 lakh.
• Tax-Exempt Interest: The interest that accrues on the Sukanya Samriddhi Yojana account, compounded annually, is exempt from tax. This exemption falls under Section 10 of the Income Tax Act.
• Tax-Free Proceeds: The proceeds received upon maturity or withdrawal from the SSY account are also exempt from income tax. This ensures that the accumulated savings and interest are not subject to taxation, providing a tax-free financial benefit to the account holder.

These tax benefits enhance the attractiveness of Sukanya Samriddhi Yojana as an investment option, aligning with the broader goal of securing the financial future of girl children in India.

Sukanya Samriddhi Yojana: Interest Rate 2023

The interest rate for Sukanya Samriddhi Yojana is changed and determined quarterly. In the table below, we have compiled the rates in the last few years for your reference:

Calculation of Sukanya Samriddhi Yojana Interest

The interest for the Sukanya Samriddhi Yojana (SSY) account is calculated based on the lowest balance for the calendar month, specifically between the fifth day of the month and the end of the month. Interest is credited once, at the end of each financial year.

The formula commonly used for calculating interest on an SSY account is:

A = P(1+r/n)^nt

Here:

• P is the initial deposit.
• R is the rate of interest.
• N is the number of times the interest compounds per year.
• T is the number of years.
• A is the amount at maturity.

As the interest on an SSY account is compounded annually, manual calculations may be complex. Alternatively, a Sukanya Samriddhi Yojana Calculator can be used for accurate results. The calculator can determine the maturity amount by inputting the probable annual investment amount, the girl child’s age, and the account commencement year.

Opening a Sukanya Samriddhi Yojana Account in a Post Office

To open a Sukanya Samriddhi Yojana (SSY) account in a Post Office, you can follow these steps:

• Go to the Post Office branch where you wish to open the SSY account.
• Obtain the Sukanya Samriddhi Yojana application form (Form-1) from the Post Office.
• Complete the form with accurate and relevant details.
• Attach the necessary supporting documents, which may include proof of identity, address, and the birth certificate of the girl child.
• Pay the initial deposit for the SSY account. This can be done in cash, by cheque, or through a demand draft.
• The deposit amount can range from Rs. 250 up to Rs. 1.5 lakh.
• Submit the application form and the deposit to the Post Office.
• The Post Office will process your application and verify the provided details.
• Upon successful processing, your Sukanya Samriddhi Yojana account will be officially opened.
• The Post Office will issue a passbook for the SSY account, marking the initiation of the account.

Filling The SSY Application Form

To fill out the Sukanya Samriddhi Yojana (SSY) application form, follow these steps:

• Under ‘To The Postmaster/Manager,’ provide the Post Office or bank branch details along with the postal address.
• Paste the applicant(s) photograph to the right of the form.
• Next to ‘I/We,’ mention the applicant’s name and specify Sukanya Samriddhi Yojana in the following space.
• Enter the deposit amount in both numerical and written formats.
• Tick the mode of payment, specifying whether it is cash, cheque, or demand draft.
• If paying by cheque or DD, provide the number and date details.
• Enter the name and date of birth of the girl child (depositor).
• Enter the name, date of birth, Aadhaar number, and PAN number of the guardian.
• Provide the address and contact details of the guardian.
• Mention the type of account.
• Provide details of the birth certificate of the depositor.
• Enter the details of the KYC documents attached to the application.
• Sign the form and print the name.
• Enter the nomination details.
• If the applicant is illiterate, get the signatures of two witnesses.
• Conclude the form by adding the date, place, and signature at the end of the nomination section.

Opening a Sukanya Samriddhi Yojana Account through Banks

To open a Sukanya Samriddhi Yojana (SSY) account through banks, follow these steps:

• Select a participating bank from the list where you wish to open the SSY account. Ensure it is convenient for you and is part of the list of authorised banks.
• Visit the official website of the chosen bank and download the Sukanya Samriddhi Yojana Account Opening Application Form.
• Complete the application form with accurate and relevant details. This may include the depositor’s and guardian’s information, as well as the mode of payment.
• Submit the filled application form along with any required supporting documents to the selected bank branch.
• Pay the initial deposit for the SSY account. The deposit amount can range from Rs. 250 up to Rs. 1.5 lakh.
• The bank will verify the details provided and process your application.
• Once the application is approved, your Sukanya Samriddhi Yojana account will be officially opened.
• The bank will provide a passbook for the SSY account, marking the commencement of the account.

Participating Banks:

The participating banks for Sukanya Samriddhi Yojana are

• Axis Bank
• ICICI Bank
• State Bank of India
• Punjab National Bank
• Bank of Baroda
• Union Bank of India
• Canara Bank
• Bank of India
• Indian Bank
• Syndicate Bank
• UCO Bank
• Vijaya Bank
• Allahabad Bank
• Andhra Bank
• Punjab and Sind Bank
• Bank of Maharashtra
• Corporation Bank
• Central Bank of India
• Indian Overseas Bank
• Dena Bank
• United Bank of India
• Oriental Bank of Commerce
• IDBI Bank

Documents Required for Sukanya Samriddhi Yojana

To complete the Sukanya Samriddhi Yojana (SSY) application process, you need to submit physical copies of the following documents at the post office or bank branch where you submitted the SSY application:

• Provide a copy of the birth certificate of the girl child as proof of her age.
• Submit copies of identity and address proofs of the guardian. This could include documents such as an Aadhaar card, Voter ID, Passport, etc.
• If applying for proof of birth of multiple girl children on a single order of birth, provide a medical certificate.
• Include any other KYC documents as required by the post office or banks. This may vary, and commonly accepted documents include an Aadhaar card, a Voters ID, etc.
• Submit any additional documents that the post office or banks may specifically require.

Ensure that all the submitted documents are clear, legible, and valid. This step is crucial to the verification process and the successful opening of the Sukanya Samriddhi Yojana account for the girl child.

Sukanya Samriddhi Yojana Online Payment

To make online payments towards your Sukanya Samriddhi Yojana (SSY) account, you can use the India Post Payments Bank (IPPB) app on your smartphone. Here’s a step-by-step procedure for making online payments:

• Step 1: Transfer money from your bank account to your IPPB account.
• Step 2: Download the IPPB app on your smartphone and log in.
• Step 3: In the IPPB app, navigate to ‘DOP Products.’
• Step 4: Select the Sukanya Samriddhi Yojana account from the list of DOP products.
• Step 5: Enter your SSY account number and the DOP customer ID associated with your SSY account.
• Step 6: Choose the amount you want to pay and specify the instalment duration.
• Step 7: IPPB will notify you of the successful setup of the payment routine.
• Step 8: Each time the app initiates a money transfer, you will receive notifications confirming the transaction.

Sukanya Samriddhi Yojana Withdrawal Rules

To make a withdrawal from the Sukanya Samriddhi Yojana (SSY) account, you must follow these rules:

• Submission of Withdrawal Form

Submit the duly filled withdrawal form along with the SSY account passbook to the bank or Post Office branch where the account is maintained.

• Conditions for Premature Withdrawal
  • Premature withdrawals can be made under specific conditions, such as:
    • Marriage expenses of the girl child.
    • Higher education expenses when the girl child has attained 18 years.
• Withdrawal for Education Expenses: Withdrawal can be made up to 50% of the balance available at the end of the previous financial year when the girl is above 18 years or has passed the 10th standard. The withdrawal is intended for meeting education expenses, such as fees or other charges. A documentary proof, like a confirmed offer of admission to an educational institution or a fee slip, must accompany the withdrawal application.
• Frequency and Limitations: A maximum of one withdrawal can be made in a year. The withdrawal can be made in a lump sum or up to 5 instalments, subject to the specified ceiling and the actual requirement of fees or other charges.

Sukanya Samriddhi Yojana Closure Rules

There are different rules for different situations, let’s go through them.

Closure on Maturity

The Sukanya Samriddhi Yojana (SSY) account matures after the completion of 21 years of the girl child. The balance in the SSY, including interest, is paid to the child upon submitting an application and providing proof of identity, residence, and citizenship documents.

Premature Closure

Premature closure is allowed under specific circumstances:

• Intended Marriage: If the girl child intends to marry after attaining the age of 18 years, an application for premature closure can be submitted between one month prior to the marriage and three months after the marriage. Age proof documents should accompany the application.
• Death of the Girl Child: In the unfortunate event of the death of the girl child, on the production of the death certificate, the balance in the SSY, along with interest, will be paid to the guardian.
• Medical Treatment: Premature closure is permitted for medical treatment in case of life-threatening diseases of the girl child or in the event of the death of the guardian.
• Change in Status of Girl Child: Deemed closure occurs in case of a change in the status of the girl child, i.e., if she becomes a non-resident or a non-citizen of India. This change in status should be communicated by the girl child or her guardian within one month of the status change.
• Undue Hardship: After completion of 5 years from the opening of an SSY, if the post office or bank is satisfied that the operation or continuation of the SSY is causing undue hardship to the girl child (such as the death of the guardian, medical reasons of the girl child), premature closure may be allowed.
• Any Other Reasons: For any other reasons, if the SSY is to be closed at any time after the opening of the account, it will be permitted, but the entire deposit will only earn an interest rate applicable to the post office savings bank.

Transferring Sukanya Samriddhi Account from Post Office to Bank

To transfer a Sukanya Samriddhi Yojana (SSY) account from a post office to a bank, follow these steps:

• Go to the post office branch where the SSY account is currently held. The girl child need not visit; the guardian can complete the process.
• Inform the PO executive about your intention to transfer the SSY account.
• Submit the duly filled account transfer form, passbook, and KYC documents to the PO executive. The executive will discontinue the account based on your request.
• Visit the bank branch where you wish to maintain the SSY account.
• Submit the self-attested KYC documents and any other paperwork provided by the PO executive while requesting to maintain the account with them.
• The bank executive will process your request, and a new passbook will be provided once the transfer is complete.
• The balance in the SSY account can be transferred anywhere in India – between post offices, from or to banks – free of cost, upon furnishing proof of a change of residence of either the guardian or the girl child. In other circumstances, a transfer fee of Rs. 100 may apply.

Sukanya Samriddhi Yojana vs. Public Provident Fund (PPF)

Here’s a comparative overview of Sukanya Samriddhi Yojana (SSY) and Public Provident Fund (PPF):

Note:

• EEE benefit refers to tax exemption at the time of investment, accumulation, and withdrawal.
• Premature withdrawal conditions may vary, and specific criteria must be met.

Both Sukanya Samriddhi Yojana and Public Provident Fund have their unique features and serve different purposes. The choice between the two would depend on the financial goals, the age of the account holder, and the specific requirements of the investor.

Sukanya Samriddhi Yojana vs. LIC Kanyadan Scheme

When comparing Sukanya Samriddhi Yojana (SSY) with LIC Kanyadan Scheme, there are notable differences in terms of ownership, eligibility, age criteria, and other features:

Additional Notes:

• In LIC Kanyadan, the father owns the policy, while in SSY, the account is in the name of the girl child, and the guardian manages it until she turns 18.
• LIC Kanyadan has no nationality restriction for the father, while SSY is for resident Indians only.
• SSY has a specific age eligibility criterion, i.e., the account must be opened before the girl child turns 10 years old.
• A loan facility is available in LIC Kanyadan after three consecutive premium payments, whereas SSY does not offer a loan facility.
• The maturity amount in LIC Kanyadan has no minimum limit, whereas in SSY, it is based on the deposits made.

Parents must carefully evaluate the features and conditions of both schemes based on their financial goals and preferences before choosing the most suitable option for securing the future of their girl child.

FAQs on Sukanya Samriddhi Yojana