Sukanya Samriddhi Yojana is the best government backed scheme which has best tax saving option to secure your daughter’s future. Launched by the Modi government in the Year 2015, through this scheme,  Parents can even save money for marriages of their two daughters with the help of this scheme. 

What is the Sukanya Samriddhi Yojana (SSY)?

SSY aims at tackling a  major problem associated with the girl child – education and marriage. It is focused on securing a bright future for the girl child in India by facilitating the parents of a girl child in building a fund for the proper education and a carefree marriage expenses of their child. SSY has introduced the Sukanya Samriddhi Account for this very purpose.

Sukanya Samriddhi Yojana Interest Rates 2021

Sukanya Samriddhi Yojana Interest Rates are declared by the government quarterly. For Q1 (April-June) FY 2021-22, the interest rates have been set at 7.6% p.a.

Sukanya Samriddhi Yojana (SSY) Interest Rates: Historical

Time Period Interest Rate (% annually)
April to June (Q1 FY 2021-22) 7.6
Jan to March 2021 (Q4 FY 2020-21) 7.6
Oct to Dec 2020 (Q3 FY 2020-21) 7.6
Jul to Sep 2020 (Q2 FY 2020-21) 7.6
Apr to Jun 2020 (Q1 FY 2020-21) 7.6
Jan to March (Q4 FY 2019-20) 8.4
Oct to Dec 2019 (Q3 FY 2019-20) 8.4
Jul to Sep 2019 (Q2 FY 2019-20) 8.4
Apr to Jun 2019 (Q1 FY 2019-20) 8.5
Jan to March 2019 (Q4 FY 2018-19) 8.5
Oct to Dec 2018 (Q3 FY 2018-19)

Who can open SSY account?

  • Anyone who is a resident of India can open SSY for their girl child.
  • The age limit of a girl child for the opening of the SSY account is up to 10 years from the birth date of the child.
  • After attaining 18 years of age, the girl can hold the account independently. One can deposit between Rs 250 and Rs 1.5 lakh in SSY account per financial year.
  • One can deposit money up to 15 years from the opening of the account.
  • One can open two or maximum of three SSY accounts if firstborn or second borns are twin girl children.

Benefits of Investing in Sukanya Samriddhi Yojana (SSY)

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 benefits of this scheme are as follows:

High Interest Rate- SSY offers a higher fixed rate of return (currently 7.6% per annum for Q1 FY 2020-21) 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 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 (SSY) 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.

What are the tax benefits provided to SSY?

In order to encourage investments in SSY, the SSA has also been provided with certain tax benefits:

  • Investments made in the SSY scheme are eligible for deductions under Section 80C, subject to a maximum cap of Rs 1.5 lakhs
  • The interest that accrues against this account which gets compounded annually is also exempt from tax
  • . The proceeds received upon maturity/withdrawal are also exempt from income tax

How to open a Sukanya Samriddhi Yojana Account?

You can open a Sukanya Samriddhi Yojana (SSY) account with a participating bank or a Post Office branch. You need to follow the below procedure to open the account.

  1. Visit the bank or Post Office branch where you would like to open the account.
  2. Fill up the application form with relevant details and provide supporting documents.
  3. Pay the first deposit in the form of cash, cheque, or demand draft. The amount can be anything from Rs.250 up to Rs.1.5 lakh.
  4. The bank or Post Office will process your application and payment.
  5. Upon processing, your SSY account will be opened. A passbook will be issued for this account marking the initiation of the account.

Here’s how Sukanta Samriddhi Yojana offers highest tax-free return on investment:

  • The investment amount in Sukanya Samriddhi Account (SSA) qualifies for tax deduction under Section 80C whereas its interest and withdrawals/maturity are tax-free.
  • Being a small savings scheme, SSA is also covered by the sovereign guarantee, the highest form of capital protection that an investor can get.
  • Sahil Arora, Director and Group Head, Investments, Paisabazaar.com. says- “It’s current interest of 7.6% p.a. (compounded annually) is also the highest among all small savings schemes. Hence, SSA is certainly the best option for those preferring fixed income instruments covered by the sovereign guarantee for creating investment corpora for their girl children.”
  • The only flip side of SSA is its lack of income certainty and long lock-in period. Unlike bank fixed deposits, the interest rate offered on SSA is not fixed.
  • “As with other small savings schemes, the interest rate of SSA is reviewed by the Ministry of Finance in accordance with the government bond yields. Hence, the interest rate of SSA can remain static or move up or down in the next quarters depending on the movement of the government bond yields” adds Arora.
  • According to Mrin Agarwal, Founder & Director, Finsafe – “SSY is a must-buy for girl child as it gives the highest tax-free fixed return. The scheme can be used to plan for girl child education as 50% of the corpus can be withdrawn at the age of 18yrs. If the account is opened when the child is below 5 years, then the scheme would compound over a long duration thus being useful for giving the girl child a corpus at marriage.”