Sukanya Samriddhi Yojana (SSY) is a small deposit scheme for the girl child launched as a part of the ‘Beti Bachao Beti Padhao’ campaign. It is currently 8.1 per cent and provides an income-tax benefit under section 80 C of the Income Tax Act,1961. Even the returns are tax-free in the scheme.

A Sukanya Samriddhi Account can be opened any time after the birth of a girl till she turns 10, with a minimum deposit of Rs 250 (Earlier it was Rs 1,000). In subsequent years, a minimum of Rs 250 and a maximum of Rs 1.5 lakh can be deposited during the ongoing financial year.

The account can be opened in any post office or authorised branches of commercial banks.

The account will remain operative for 21 years from the date of its opening or till the marriage of the girl after she turns 18.

To meet the requirement of her higher education expenses, partial withdrawal of 50 per cent of the balance is allowed after she turns 18.

What are the rules for opening Sukanya Samriddhi Account?

The account can be opened by the natural or legal guardian in the name of the girl from her birth till she turns 10.

A depositor may open and operate only one account in the name of the girl child under these rules. One can’t open two accounts for one girl.

The birth certificate of the girl in whose name the account is opened should be submitted by the guardian at the time of the opening of the account in the post office or bank, along with other documents relating to identity and residence proof of the depositor.

How much can be deposited in the account?
The account can be opened with an initial deposit of Rs 250and thereafter, any amount in multiples of Rs 100 can be deposited, subject to the condition that a minimum of Rs 250 will be deposited in a financial year, but the total money deposited in an account on a single occasion or on multiple occasions will not exceed Rs 1,50,000 in a financial year.

Deposits in the account can be made till the completion of 15 years, from the date of the opening of the account. For a 9-year-old, deposits have to continue until the child turns 24. Between ages 24 and 30 (when the account matures), the account keeps earning interest on the balance.

An irregular account where the minimum amount has not been deposited may be regularised on payment of a penalty of Rs 50 per year, along with the minimum specified subscription for the year (s) of default. If the penalty is not paid, the entire deposit, including those made before the date of default, will receive interest at post office savings bank account rate, which is currently 4%. If excess interest has been paid, it will be reversed.

What is the mode of deposit?
The deposit in the account can be made in cash or by cheque or demand draft and an endorsement on the back of such instrument has to be made and signed by the depositor, indicating the name of the account holder and the account number in which the deposit is to be credited.

Deposits may also be made through electronic means (e-transfers) in the concerned post office or banks if there is CBS (core banking solutions) availability in them.

In case the deposit is made by cheque or demand draft, the date of encashment of the cheque or demand draft is the date of credit to the account, while for e-transfer, it is the date of deposit.

How is the interest rate on deposits calculated?
The government fixes interest rates on a quarterly basis based on the G-sec yields. The interest rate spread that the Sukanya Samriddhi Yojana enjoys over the G-sec rate of comparable maturity is 75 basis points.

The interest rate since its launch is as follows:

Interest rate for the period Interest rate
From April 1, 2014 9.1%
From April 1, 2015 9.2%
From April 1, 2016 -June 30, 2016 8.6%
From July 1, 2016-September 30, 2016 8.6%
From October 1, 2016-December 31, 2016 8.5%
From July 1, 2017- December 31, 2017 8.3%
From January 1, 2018 – March 31, 2018 8.1%
From April 1, 2018 -June 30, 2018 8.1%
From July 1, 2018 -September 30, 2018 8.1%
From October 1, 2018 – December 31, 2018 8.5%
From January 1, 2019 – March 31, 2019 8.5%

Interest at the rate, to be notified by the government, compounded yearly will be credited to the account.

In case the account holder opts for monthly interest, the same will be calculated on the balance in the account on completed thousands, in the balance which will be paid to the account holder and the remaining amount in fraction of thousand will continue to earn interest at the prevailing rate. For monthly interest, only the amount in thousands (rounded off) will be considered, the balance will continue earning interest at the prevailing rate.

The interest will be calculated for the calendar month on the lowest balance in an account on the deposits made between the close of the 10th day and the end of the month.

How does the account operate?
The account is opened and operated by the natural or legal guardian of the girl child in her name till she turns 10.

When she turns 10, the girl child can operate the account herself, however, deposit in the account may be made by the guardian or any other person or authority.

Under what circumstances can the account be closed prematurely?
In the event of death of the account holder, the account will be closed immediately on the production of a death certificate issued by the competent authority, and the balance in the account will be paid, along with the interest till the month preceding the month of the premature closure of the account, to the guardian of the account holder.

In any other case, a request for the premature closure of an Sukanya Samriddhi Yojana account can be put forward after the completion of five years of the account opening. This too will be allowed, as per the rules, on extreme compassionate grounds such as medical support in life-threatening diseases. Still, if the account has to be closed for another reason, it will be allowed, but the entire deposit will only get interested of a Post Office Savings Bank account.

What all is recorded in the passbook?
When an account is opened, the depositor is given a passbook bearing the date of birth of the girl child, date of opening of the account, account number, name and address of the account holder and the amount deposited.

The passbook will be presented to the post office or bank, as the case may be, at the time of depositing money in the account and receiving payment of interest, and also at the time of final closure of the account on maturity.

Can the account be transferred?
Yes, the account can be transferred anywhere in India if the girl child in whose name the account has been opened shifts to a place other than the city or locality where the account stands.

The transfer is free of cost on furnishing the proof of shifting of residence of either the parent/guardian or account holder. If no such proof is submitted then the applicant has to pay Rs 100 to the post office or the bank to which the transfer is made.

The transfer can happen electronically if the post office or bank has access to CBS.

What are the rules for partial withdrawal?
To meet the financial requirements of the account holder for the purpose of higher education and marriage, withdrawal of up to 50 per cent of the balance at the credit of the account at the end of preceding financial year is allowed. However, the withdrawal will be allowed only when the account holder turns 18.

For this, not just a written application, but documentary proof in the form of a confirmed admission offer in an educational institution or a fee slip from such institution clarifying that such financial requirement, is required. Further, the withdrawal amount will be restricted to the actual demand of fee and other charges required at the time of admission as shown in the offer of admission or the relevant fee slip issued by the institution.

When will the account mature?
The account matures on the completion of 21 years from the date of opening or whenever the girl child gets married, whichever is earlier, subject to the following:

*It is also provided that where the marriage of the account holder takes place before the completion of such period of 21 years, the operation of the account will not be permitted beyond the date of her marriage.

*Provided further that where the account is closed before the completion of 21 years, the account holder will have to give an affidavit to the effect that she is not below 18 as on the date of closing of the account. On maturity, the balance, including the interest outstanding in the account, will be payable to the account holder on the production of withdrawal slip along with the passbook.

Can the account be opened in the name of an NRI girl child?
A girl child is eligible for an Sukanya Samriddhi Yojana account only if she is a resident Indian citizen when the account is opened and remains so until the maturity or the closure of the account.

Non-resident Indians can no longer open an SSY account. In fact, if you or your child’s residential status changes to non-resident or she takes up another country’s citizenship during the term of the scheme, no interest shall be paid from the date of citizenship or residential status changes and the account will be considered closed.

What are the tax benefits available in the scheme?
Currently, Sukanya Samriddhi Yojana offers the highest tax-free return with a sovereign guarantee and comes with the exempt-exempt-exempt (EEE) status. The annual deposit (contributions) qualifies for Section 80C benefit and the maturity benefits are non-taxable.

How To Apply With Procedure:

(i) Fill up the form

(ii) Submit the documents along with photos

(iii) Deposit cash (Minimum of Rs 1,000)

(iv) After opening the account, one can make deposits by cash, cheque or demand draft.