An initiative known as the Sukanya Samriddhi Yojana (SSY) is a small deposit scheme run by the Ministry of Finance and created only for female children. In 2015, the Honorable Prime Minister introduced the scheme as an extension of the Beti Bachao Beti Padhao campaign. With this scheme's help, a girl child can cover the costs of her schooling and wedding. The scheme encourages parents to open a savings account for their female child's future education and marriage expenses. Post Offices and branches of Public Sector Banks and three Private Sector Banks, such as HDFC Bank, Axis Bank, and ICICI Bank, offer individuals the opportunity to submit their applications for SSY. The parent or legal guardian of the girl child can open the account on behalf of the girl child. However, to qualify for this scheme, the girl child must be younger than 10 years old. Also, only one account can be opened for a girl child, and a family can open only two accounts irrespective of how many girl children they have. The minimum amount that can be invested per annum is Rs.250, while the maximum amount that can be invested annually is Rs.1,50,000. The length of the Maturity Period is 21 years. The interest rate is 8% for the duration starting from April 1, 2023, to June 30, 2023. The principal deposit amount, the interest earned throughout the duration, and the benefits received upon maturity are exempt from taxes. Additionally, the account holder is eligible for a tax benefit according to section 80C, which states that the principal amount can be deducted up to a maximum of Rs.1.50 lakh.
Eligibility for Sukanya Samriddhi Yojana
An SSY account can only be opened by a girl child's parents or legal guardians.
A girl child can open only one account in her name; she must be under ten years old when the account is opened.
A family is restricted to only two SSY accounts, one for each girl child in the family.
Note: In certain exceptional circumstances, SSY can be opened for more than two girls in a family, such as:
A third account can be opened if a girl child is born before the birth of twin or triplet girls or if triplets are born first before the single child.
A third SSY account cannot be opened if a girl is born after twin or triplet girl children.
Documents required to apply
The girl child's birth certificate
The applicant's parent or legal guardian's photo ID
Address proof of the applicant's guardian or parent.
Additional KYC documentation, like voter ID and PAN.
An SSY account opening form.
A medical certificate must be filed if several children are born in the same birth order.
Any additional document that the post office or bank requests to submit.
Benefits of Sukanya Samriddhi Yojana
Higher rate of interest: In comparison to other government-backed tax saving plans, such as the Public Sector Pension Fund (PPF), the SSY provides a higher fixed rate of return, which is now 8% per annum for the third quarter of the fiscal year 2023-24. If the account is not closed, interest will continue to be paid even after maturity.
Tax benefits on SSY: Under Section 80C, SSY offers tax deductions of up to Rs. 1.5 lakh per annum to the account holder.
Guaranteed return on investment: Returns are guaranteed because the SSY scheme is backed by the government.
Investment flexibility: Individuals can choose to make deposits ranging from a minimum of Rs. 250 per year to a maximum of Rs. 1.5 Lakh per year because of its flexible Investment option. This ensures that individuals with varying levels of financial position can invest in this scheme.
Premature withdrawal: After the child reaches the age of 18, she is permitted to make an early withdrawal of as much as 50% of her investment, which is allowed even if she is not planning to get married.
Seamless Transfer: If a parent or guardian managing the Sukanya Samriddhi Account moves to a different area of the country, the SSY account can be transferred without restriction from one location to another (bank or post office).
Compounding benefits: The Sukanya Samriddhi Yojana (SSY) is an excellent investment plan for the long term since it offers the advantage of compounding every year with each investment. As a result, long-term, even smaller investments will also result in bigger returns.
Steps to Open an SSY Account
Follow the instructions listed below to open the account:
- To open an account, visit the nearby bank or post office.
- Provide the required information on the application form and affix any supporting documents.
- Make the initial deposit with a demand draft, cheque, or cash. The amount payable may vary from Rs. 250 to Rs. 1.5 lakh.
- The bank or the Post Office will handle your application and payment processing.
- Your SSY account will be activated after processing.
- After the account's opening, a passbook will be provided to the individual.
However, presently, opening an SSY account online is not an option offered by the bank or the post office. But you can make online deposits after the account is opened.
