Sukanya Samriddhi Yojana: All You Need to Know!

What is Sukanya Samriddhi Yojana?

Sukanya Samriddhi Yojana is a savings programme designed by the Government of India to improve the lives of girls. With the help of this programme, parents can accumulate money for their daughter's future marriage and educational costs. Sukanya Samriddhi Yojana scheme is often known as SSY. It is one of the best savings schemes in India. It is one of the many deposit programmes the government implemented under its “Beti Bachao Beti Padhao Abhiyan”, unveiled in 2015. These programmes were put in place to give girls the assurance of a bright financial future. Parents of a girl child may open an account in her name at any private or public sector bank for 21 years under the Sukanya Yojana. The investment period under the SSY is 21 years, beginning on the day the account was opened. The current Sukanya Samriddhi Yojana interest rate is 8% p.a. (Q1 of FY 2023-24); Compounded yearly. Here is a table explaining all the vital information about SSY:

Sukanya Yojna Details

Criteria	Details
SSY Interest Rate	8% p.a. (Q1 of FY 2023-24); Compounded yearly
Minimum Deposit	₹250 – The raise in deposit needs to be in multiples of the 50s.
Maximum Deposit	₹1,50,000
Account Holder	The girl's parent or legal guardian will control the account if the girl is under the age of 10. Once a girl becomes 18, she can operate the account herself.
Required Documents	Form 1, birth certificate of the baby girl, and PAN or Aadhar card of parents or guardian.
Maturity Amount	It will be based on the deposited or invested amount.
Medium of Deposit	Demand draft/cheque/NEFT/cash
Maturity Period	21 Years or till the girl gets married. The deposits need to be made for at least 15 years.

How Does the Sukanya Samriddhi Account Operates?

Under the Sukanya Samriddhi Yojana, as parents, you can contribute a maximum of ₹1.5 lakhs annually to your daughter's account. These deposits are only permitted for the first 15 years after account formation. Afterwards, the balance will increase as a result of compound interest. Once your daughter becomes an adult, the accumulated funds will be able to support her aspirations for a better education, a business, or marriage.

What is the Eligibility for Sukanya Samriddhi Yojana?

The following are the requirements for Sukanya Samriddhi Yojana account eligibility:

• A family may open up to two accounts for two girls.

• A third or fourth SSY account may be formed if there are twin or triplet girls.

• Until age 10, a girl child's parent or legal guardian may open an SSY account on her behalf.

• The girl needs to be an Indian resident.

What are the Documents Required to Enrol in Sukanya Samriddhi Yojana?

• Birth certificate of the girl child.

• A medical certificate in case of twins, triplets, or multiple births.

• Duly filled form for the SSY account opening.

• Address and ID proof of the depositor.

• Other documents requested by the bank or post office.

What are the Advantages of the SSY Scheme?

There are various benefits of SSY. Some of them are as follows:-

1. Guaranteed Benefits on Maturity

   The Sukanya Samriddhi Yojana plan guarantees a full account balance, including any accrued interest, to the girl child upon maturity. It provides financial independence and empowerment to the daughter. Moreover, compound interest continues to accrue even after maturity until the account is closed.

2. Considerable Tax Savings

   The tax deduction is available under Section 80C of the Income Tax Act of 1961 for investment in SSY. A maximum of ₹1.5 lakhs is deductible. Interest payments and maturity/withdrawal amounts are also tax exempted.

3. Higher Interest Rates & Compound Interest

   Sukanya Samriddhi Yojana's interest rate is higher than other savings plans for the girl child. It’s a great way to secure the financial future of a girl child. Government declares an interest rate yearly, and it is compounded annually. The investment will grow exponentially by maturity with the power of compounding.

How to Open a Sukanya Samriddhi Account?

1. You can open your SSY account in either bank or post office. The processes for creating your Sukanya Samriddhi account are listed below.

2. Drop by the bank or post office closest to you.

3. Complete the Sukanya Samriddhi Yojana application form. Its formal name is FORM SSA-1. The bank or post office you go to will give you this paperwork. You can also complete this form by downloading it from the government website.

4. After completing this form, you must submit the required paperwork (the documents mentioned earlier in this article).

5. Pay the initial instalment. A minimum deposit of 250 is required. Deposits are limited to ₹1.5 lakh.

6. The bank will need a few days to process your application after receiving your supporting documentation.

7. Your SSY account will be opened following verification. A passbook will be given to you.

What are the Withdrawal Rules of the SSY Account?

The following rules are applicable at the time of withdrawal from an SSY account:-

• The girl child can withdraw the entire amount in the account, including any interest earned once the account’s term ends. She will need to submit her birth certificate, Id proof and address proof.

• If a girl is 18 years old and has completed grade 10, she can withdraw funds for higher education where she can pay for her admission and other fees using the funds.

• When requesting a withdrawal, you must present supporting documentation such as acceptance to the university or college and tuition receipt.

• 50% of the available money from the prior year is the maximum that can be withdrawn. The cash may be withdrawn in full or in 5 equal instalments.

You Can Open Your SSY Account in the Following Banks:

Here’s a list of banks offering SSY accounts:

• State Bank of India

• Punjab and Sind Bank

• Bank of Baroda

• Canara Bank

• Bank of India

• Bank of Maharashtra

• Central Bank of India

• Indian Overseas Bank

• Indian Bank

• UCO Bank

• Punjab National Bank

• Union Bank of India

• IDBI Bank

• Axis Bank

• ICICI Bank

Is There Any Alternative to SSY?

SSY may be the top pick for many due to its best-in-class interest rates. But there are alternatives such as RD, PPF, and Freo Savings. These options offer similar maturity periods, tax benefits, and deposit rules but with added flexibility and liquidity. Take Freo Save, for example. It is a digital savings account that offers a competitive interest rate of up to 7% and is a zero-balance account with no paperwork or criteria to be fulfilled for the withdrawal of funds. Each of these options has its advantages, and the right one for you depends on your approach as an investor.

Other Important FAQs

1. How to Calculate Interest on Sukanya Samriddhi Yojana Scheme?

To determine your interest in the SSY Scheme, follow the formula below.

I = P(1+R/100) ^N

I = Interest, P = Principal, R stands for return rate, and N is for the number of years.

2. How many years need to pay for Sukanya Samriddhi Yojana?

The maturity term for SSY is either upon her marriage after becoming 18 years old or 21 years from the account opening. However, only 15 years’ worth of deposits are required. After that, even if no additional deposits are made, the SSY account will continue to accrue interest until it matures.

3. Who is eligible for Sukanya Samriddhi Yojana?

A girl child’s parents or guardians may open a Sukanya Samriddhi Yojana account in her name at any time before turning 10 years old. Each girl child is only permitted one account.

4. What are the disadvantages of Sukanya Samriddhi Yojana?

Every wise investment also has its share of disadvantages. Sukanya Samriddhi Yojana has certain drawbacks, too, like the following:

• It has a 21-year lock-in duration.

• One can only open a maximum of two accounts.

• There is no facility for early withdrawal.

• Every three months, the government may revise interest rates.

5. Can I change to the Sukanya Samriddhi account from my regular bank deposit account?

No. There is no option to convert a deposit account to a Sukanya Samriddhi Account.

6. Does the Sukanya Samriddhi Scheme allow for location-based transfers?

Yes. Transferring this plan from a post office to a bank or from one authorised bank to another is possible. This is because a girl child may need to migrate at some point for school or other reasons.

7. Can I open multiple Sukanya Samriddhi accounts for my daughter?

Each girl child is only permitted one Sukanya Samriddhi account. In other words, if you have two daughters, you can open two separate accounts in each of their names. But if you only have one girl child, you can only open one account.

8. Will the Sukanya Samriddhi Yojana issue passbook?

Yes. All account holders of the Sukanya Samriddhi scheme will be given a passbook to record their transactions.

9. What happens if you don’t make the minimum annual payment required for an SSY account?

If the minimum deposit of ₹250 is not made during a financial year, a penalty of ₹50 will be assessed.