Sukanya Samriddhi Yojana is a special initiative for the girl child and aims to encourage saving for her welfare
28-Sep-2021 •Research Desk
Sukanya Samriddhi Yojana (SSY) is a tax-free small savings scheme for the girl child. It was launched on January 22, 2015. The parents or legal guardians of a girl aged upto ten years can open a Sukanya Samriddhi Yojana account in the name of the girl child in designated branches of public-sector banks or in a post office, with a minimum amount of Rs 250. It is a special initiative for the girl child and aims to encourage saving for her welfare.
The depositor can open only one account in the name of one girl child and a maximum of two accounts in the name of two different children. However, the guardian can open the third account in the case of the birth of twin girls in the second birth, or girl triplets in the first birth.
Features at a glance
Sukanya Samriddhi Yojana interest rate
7.6 per cent for the period January-March 2022. Interest rates are subject to revision every quarter.
Capital protection and inflation protection
Since the scheme offers a relatively fixed rate of interest, the capital is adequately protected. Since the returns are linked to the government bond yield, there is no assured inflation protection.
The Sukanya Samriddhi Yojana interest rate is to be 75 basis points over the ten-year government bond yield. For the period January-March 2022, the deposit will fetch an interest rate of 7.6 per cent. The rates are revised every quarter and the new rates will be applicable to all subscribers.
The account can be opened with a minimum deposit of Rs 250. Failure to make payments as per the chosen frequency can lead to deactivation of the account. It can then be revived only after paying a penalty of Rs 50 along with the missing payments. Deposits can be made multiple times in a year, with an upper limit of Rs 1,50,000.
Sukanya Samriddhi Yojana account has a tenure of 21 years. However, partial withdrawal and pre-mature closure is allowed in case of higher education, marriage or on compassionate grounds.
The scheme comes under the exempt-exempt-exempt (EEE) category, where the deposits, the interest earned as well as the maturity amount are tax-free. The sum invested in the Sukanya Samriddhi Yojana scheme is eligible for tax deduction under Section 80C subject to a maximum of Rs 1.5 lakh per year. On maturity, the entire amount, including the interest, is tax free.
Where to open Sukanya Samriddhi Yojana account
The account can be opened at any post office in India doing savings bank work or at any branch of a commercial bank authorised by the central government to open an account under Sukanya Samriddhi Account Rules, 2014.
How to open Sukanya Samriddhi Yojana account
The parent/guardian can approach any post office or bank with the birth certificate of the girl child, along with the ID and address proof of the parent/guardian.
Points to remember
To view the current rates on the schemes, go to vro.in/s34211