Sukanya Samriddhi Yojana (SSY): Interest Rate and other details

Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme in India aimed at securing the financial future of a girl child. In order to majorly address the issue of the declining child sex ratio in our country, the Goverment of India launched a social campaign on 22 January 2015, "Beti Bachao, Beti Padhao" to encourage parents to build a fund for the future education and marriage expenses of their 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.

What is the Sukanya Samriddhi Yojana (SSY)

Key Features :

Eligibility to Open Account -

• The account can be opened by the guardian of a girl child who is below 10 years of age.
• Only one account per girl child is allowed.
• A family can open up to two accounts for two girls.

Documentation Required -

• Birth certificate of the girl child.
• Identity proof of the guardian (e.g., Aadhaar card, PAN card).
• Address proof of the guardian (e.g., utility bills, Aadhaar card).

Account Opening -

• The account can be opened at any post office or authorized branches of commercial banks.
• Fill out the SSY account opening form.
• Submit the required documents along with the initial deposit.

Deposits -

• The minimum deposit required is ₹250.
• The maximum deposit limit is ₹1.5 lakh per financial year.
• Deposits can be made in multiples of ₹100.
• The deposits can be made for a maximum period of 15 years from the date of account opening.

Interest Rate -

• The interest rate is determined by the government and is subject to change quarterly.
• For the quarter ending March 2024, the interest rate is 7.6% per annum (subject to change).

Duration -

• The account matures after 21 years from the date of opening.
• Partial withdrawals are allowed after the girl reaches 18 years of age for her higher education or marriage, up to 50% of the account balance at the end of the preceding financial year.

Tax Benefits -

• Deposits made under SSY qualify for tax deduction under Section 80C of the Income Tax Act.
• The interest earned and the maturity amount are also tax-free.

Premature Closure -

Allowed only in cases of the death of the account holder, life-threatening diseases, or if the girl child becomes a non-citizen or non-resident of India.

Benefits:

High Interest Rate -

SSY offers one of the highest interest rates among small savings schemes.

Tax Savings -

Contributions, interest earned, and maturity amount are tax-free.

Secure Investment -

Being a government-backed scheme, it is a safe and secure investment option.

Limitations:

Limited Liquidity -

The long lock-in period and restrictions on withdrawals make it less liquid compared to other investment options.

Eligibility Constraints -

Only applicable for girl children below 10 years of age.

Conclusion: Sukanya Samriddhi Yojana is a beneficial scheme for parents looking to secure the future of their girl child through disciplined savings. It offers attractive returns and tax benefits, making it an ideal choice for long-term financial planning for the child's education and marriage.