Can you close Sukanya Samriddhi Yojana (SSY) account prematurely?

My husband is a serious kidney patient. I can't continue the Sukanya Samriddhi Yojana account. Is it possible to close the account after six years?
- Anonymous

Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme that caters to the financial goals of the girl child. It is a savings and investment avenue that provides guaranteed tax-free returns. The account can be opened by a parent or guardian in the name of a girl child who hasn't attained ten years of age on the account's opening date. Know all about Sukanya Samriddhi Yojana.

Premature closure
In the normal course, one needs to make a minimum nominal deposit of Rs 250 every year for keeping the SSY account active. However after completing five years, it can be closed prematurely in certain situations.

Premature closure is possible only in case of death of either the account holder or the parent/guardian or in case of extreme compassionate grounds such as life-threatening illness to the account holder. If it is very difficult and impossible for the account holder to continue the account, then this must be proved to the accounts office. The account holder can make a written application and the accounts office can take a decision on it.

Account in default
If the account holder fails to make the minimum annual deposit of Rs 250, then your account will be considered as an account in default. It is nothing to worry about. One can regularise their account before completing 15 years from the date of opening the account. The account holder will have to pay a penalty of Rs 50 and make the minimum deposit for each year of default. In case the account is not regularised within 15 years, the already deposited amount will continue to gain interest as applicable to the scheme (currently 7.6 per cent, revised every quarter). The total amount generated will be paid on maturity.

Closure and withdrawal
The Sukanya Samriddhi Yojana account matures upon completion of 21 years from the account's opening date. It is also possible to close the account before maturity on account of the marriage of the account holder.

Partial withdrawal of up to 50 per cent of the balance of your SSY account (as of preceeding March) is allowed, but it can be withdrawn either for marriage or higher education of the girl child. In case of higher education, it is allowed only after the girl child passes the 10th standard or attains the age of 18, whichever is earlier.

Conclusion
In your case, we feel that you have a very valid reason as your husband is seriously ill. And since you have also completed the five-year lock in period, you may write an application to the accounts office expressing your concern. If they are convinced, they may allow a premature closure. Wishing a speedy recovery for your husband.

Suggested watch: Is it advisable to invest in the Sukanya Samriddhi Yojana?

This article was originally published on November 08, 2022.