Post Office Sukanya Samriddhi Yojana: Eligibility & Tax Benefits

One of the few government-backed schemes tailored towards the empowerment of girl children is the Sukanya Samriddhi Yojana. If you have a girl child, you can open an SSY account by visiting the nearest post office. Here’s everything you need to know about this unique savings scheme. 

What is the Sukanya Samriddhi Yojana (SSY)?

The Sukanya Samriddhi Yojana (SSY) was announced on January 22, 2015 by the Indian Government as part of the Beti Bachao Beti Padhao (BBBP) initiative. The primary objective of the SSY scheme is to encourage parents of girl children to save up for their future. Once the account matures, the corpus can be used by the girl child to fund her higher education or to take care of her marriage expenses. The Sukanya Samriddhi Yojana empowers girl children by making them financially independent. 

Sukanya Samriddhi Yojana Age Limit and Maturity Period

The Sukanya Samriddhi Yojana has clearly specified the age limit for opening an account. Parents of a girl child can open an SSY account with a post office or a notified Scheduled Commercial Bank (SCB) at any time before the child turns 10 years of age. 

The Sukanya Samriddhi account matures when the girl child attains 21 years of age. Upon maturity, the corpus ceases to earn interest and can be withdrawn by the account holder. Alternatively, the funds in the account can be accessed by the girl if she gets married after attaining 18 years of age. 

Benefits of Sukanya Samriddhi Yojana

The Sukanya Samriddhi Yojana offers a host of benefits for both the parents and the girl child. Here’s a quick overview of some key advantages of this scheme. 

• Low Minimum Deposit 

The minimum deposit for Sukanya Samriddhi accounts is just ₹250 per financial year. A nominal penalty of ₹50 will be levied if you fail to make the minimum deposit during a financial year. The maximum amount you can deposit during any particular financial year is ₹1.5 lakh.

• Premature Withdrawal Facility 

The Sukanya Samriddhi Yojana has a premature withdrawal facility, where you can withdraw up to 50% of the previous financial year’s balance to meet the educational expenses of your girl child. That said, it is mandatory to produce proof of admission to avail this facility. 

• Guaranteed Safety and Returns 

With the Sukanya Samriddhi Yojana, the returns are guaranteed and there’s no default risk since the scheme is backed by the Government of India. 

• Account Transfer Facility 

You can transfer a post office Sukanya Samriddhi Yojana account to a Scheduled Commercial Bank and vice versa at any point in time. 

Tax Benefits of Sukanya Samriddhi Yojana

To make the savings scheme more attractive, the Government of India has bestowed the Sukanya Samriddhi Yojana with several tax benefits:

• Any deposit you make towards an SSY account during a financial year can be claimed as a deduction under section 80C of the Income Tax Act, 1961. The maximum amount that you can claim, however, is restricted to ₹1.5 lakh per financial year. 
• Any interest that the funds in the Sukanya Samriddhi account accrues is completely tax-exempt as per Section 10 of the Income Tax Act. 
• The funds withdrawn from the account on maturity or otherwise are also fully tax-exempt.

Sukanya Samriddhi Yojana Interest Rate

The Government of India notifies the interest rate for the scheme on a quarterly basis. As of the 2nd Quarter (July to September) of the financial year 2023-2024, the interest rate has been notified as 8% per annum, which is far higher than most traditional savings and deposit schemes.

Calculation of Sukanya Samriddhi Yojana Interest

The interest is calculated on the lowest balance in the Sukanya Samriddhi account in a month. For the purpose of interest calculation, the balance in the account between the fifth and last days of the month is considered. 

Although the interest is calculated each month, it is only credited at the end of every financial year. Additionally, the interest is compounded annually as well. If you wish to accurately determine the amount of interest your investment in an SSY account is likely to accumulate, it is advisable to use a Sukanya Samriddhi Yojana calculator. All you need to do is enter a few details such as the amount of annual investment, the child’s age and the account opening year. The tool will give you an estimate of the returns instantly. 

Sukanya Samriddhi Yojana Eligibility

There are certain criteria that need to be satisfied to be eligible for opening a Sukanya Samriddhi Yojana account. Here’s a quick glimpse of the eligibility criteria:

• You must be the parent or the legal guardian of the girl child.
• The girl child must be an Indian resident and below 10 years old. 
• You can open only one account per girl child. 
• You can open a maximum of two SSY accounts per family, except in the case of triplet girl children, where a third account can be opened. 

How to Invest in Sukanya Samriddhi Yojana (SSY)?

To invest in Sukanya Samriddhi Yojana, you need to first open an account with a post office or a notified Scheduled Commercial Bank (SCB). The process you need to follow to open an account is listed below:

• Step 1: Visit the nearest branch of a post office or a notified bank. 
• Step 2: Request for a Sukanya Samriddhi Account opening form (Form-1). 
• Step 3: Fill out and submit the form along with all the necessary documentary evidence. 
• Step 4: Make the first deposit. You can choose to make the payment via cash, demand draft or cheque. 

That’s it. Once you make the first deposit, the bank or post office will process your account opening request and you will receive a passbook containing the details of the newly opened account.

Documents Required for Sukanya Samriddhi Yojana

The list of documents you need to submit to open a Sukanya Samriddhi Yojana account with a bank or a post office is as follows:

• A copy of the girl child’s birth certificate
• A copy of the parent or legal guardian’s identity and address proof 
• In the case of the birth of multiple girl children via a single pregnancy, a medical certificate from a competent doctor certifying the same 

Note: The bank or the post office may request you to submit further documentary evidence in addition to the documents mentioned above. 

Sukanya Samriddhi Yojana Closure Rules

The Sukanya Samriddhi Yojana account is usually closed on maturity. However, it may also be closed prematurely as long as certain conditions are fulfilled. Here’s a closer look at the account closure rules.

Account Closure On Maturity 

The Sukanya Samriddhi Account matures once the girl child attains 21 years of age. At this point, the account holder can submit an application for closure and withdraw the entire balance in the account.

Premature Account Closure

The account can be prematurely closed only if any of the below-mentioned conditions are satisfied:

• If the girl child is undergoing medical treatment for a life-threatening disease. 
• If the girl child dies at any point in time before the account matures. 
• If the residential status of the girl child changes from resident to non-resident. 
• If the girl child intends to get married after attaining 18 years of age, a premature account closure request can be made anytime during one month before the proposed marriage and 3 months post her marriage. 
• If the account issuing authority is of the view that the continuation of the account would cause hardship to the girl child. 

Note: If the SSY account is prematurely closed for any reason other than the ones listed above, the deposit will earn interest at a rate applicable to a regular post office savings account. 

Conclusion

The Sukanya Samriddhi Yojana is a good step towards ensuring the financial independence of girl children. Thanks to the host of benefits it offers, the scheme has already become one of the most popular savings schemes in the country. 

FAQs