Define Sukanya Samriddhi Yojana (SSY) and its Objective

The Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme launched by the Government of India under the Beti Bachao Beti Padhao campaign. The primary objective of SSY is to promote the welfare of girl children by encouraging parents to save for their future education and marriage expenses. The scheme aims to provide financial security and support for the girl child, empowering them through education and enabling them to lead financially independent lives.

How the Scheme Works: Features and Benefits

Features:

1. Account Opening: The SSY account can be opened in the name of a girl child by her parents or legal guardians.
2. Age Limit: The account can be opened anytime from the birth of the girl’s child until she turns 10 years old.
3. Number of Accounts: Only one account per girl child is allowed. A family can open up to two SSY accounts for two girl children. In the case of twins or triplets, additional accounts may be permitted.
4. Deposit Limits: A minimum deposit of INR 250 and a maximum deposit of INR 1.5 lakh can be made in a financial year.
5. Tenure: The account matures after 21 years from the date of opening or upon the marriage of the girl child after she turns 18 years old.
6. Interest Rate: The scheme offers an attractive interest rate, which is revised quarterly by the government. The interest is compounded annually.

Benefits:

1. High Returns: The interest rate for SSY is typically higher than that of other government-backed schemes like the Public Provident Fund (PPF) or National Savings Certificate (NSC).
2. Tax Benefits: Deposits made under SSY are eligible for tax deductions under Section 80C of the Income Tax Act, up to INR 1.5 lakh per annum. Additionally, the interest earned and the maturity amount are tax-free.
3. Flexibility in Deposits: Parents can deposit any amount within the specified range as per their financial convenience.
4. Secured Investment: Being a government-backed scheme, SSY is a secure and risk-free investment option.

Eligibility Criteria for Opening an SSY Account

Account Holders: The SSY account can only be opened by the parents or legal guardians of a girl child.

Residency and Age: The girl child must be an Indian resident and under 10 years old at the time of account opening.

Single Account Limitation: Each girl child is eligible for only one SSY account.

Family Limit: A maximum of two SSY accounts can be opened per family, one for each girl child.

Special Cases for Multiple Accounts:

• An additional account is permissible if a girl child is born before the birth of twin or triplet girls, or if triplets are born first, allowing for a third account.
• If a girl child is born after the birth of twin or triplet girls, a third SSY account cannot be opened.

Benefits of Investing in Sukanya Samriddhi Yojana

Higher Returns: The SSY scheme offers one of the highest interest rates among small savings schemes, making it a lucrative option for long-term savings.

Tax Benefits: Investments in SSY qualify for deductions under Section 80C, and the interest earned and maturity proceeds are exempt from tax.

Financial Security: The scheme ensures that the girl child has a substantial financial corpus for her education and marriage.

Encourages Savings: The scheme inculcates a habit of saving among parents for the future needs of their daughters.

How to Calculate Interest on the SSY Scheme

To calculate the interest on the SSY scheme, you can use the Sukanya Samriddhi Yojana calculator or follow these steps:

1. Determine the Interest Rate: Check the current interest rate applicable to the SSY scheme.
2. Annual Compounding: The interest is compounded annually.
3. Formula: Use the compound interest formula: A=P(1+r/n)^n
   • A is the amount at maturity
   • P is the principal amount
   • r is the annual interest rate
   • n is the number of times interest is compounded per year (for SSY, n=1)
   • t is the number of years the money is invested

Sukanya Samriddhi Yojana Interest Rates for 2024

The interest rate for SSY is subject to change every quarter. As of the latest update in 2024, the interest rate for SSY stands at 8.2% per annum. For the most accurate and up-to-date information, it’s advisable to refer to the official notifications from the Ministry of Finance or visit the India Post website.

How to Open an SSY Account

Opening a Sukanya Samriddhi Yojana (SSY) account is a straightforward process, and it can be done either offline at a post office or authorized bank branch or online through the internet banking services of participating banks. Below are the detailed steps for both methods:

Offline Process

1. Visit a Post Office or Authorized Bank:
   • Locate the nearest post office or a bank that is authorized to offer SSY accounts. Some of the prominent banks include the State Bank of India (SBI), Punjab National Bank (PNB), and others.
2. Collect the Application Form:
   • Request the Sukanya Samriddhi Yojana account opening form from the post office or bank.
3. Fill Out the Application Form:
   • Carefully fill in all the required details in the application form. This includes personal details of the girl child and the parent/guardian, address details, and initial deposit amount.
4. Attach Necessary Documents:
   • Attach the following documents with the filled application form:
     • Birth certificate of the girl child (proof of age)
     • Identity proof of the parent/guardian (Aadhaar card, PAN card, passport, etc.)
     • Address proof of the parent/guardian (Aadhaar card, utility bill, passport, etc.)
     • Recent passport-sized photographs of the girl child and the parent/guardian
5. Submit the Application Form:
   • Submit the duly filled application form along with the attached documents to the post office or bank.
6. Make the Initial Deposit:
   • Deposit the initial amount, which can be as low as INR 250. The deposit can be made through cash, cheque, or demand draft.
7. Receive the Passbook:
   • Upon successful processing of your application, you will receive a passbook. The passbook will contain details of the SSY account, including the account number, date of opening, and transaction details.

Online Process

1. Visit the Official Website:
   • Go to the official website of the bank that offers the SSY account services. Ensure the bank is authorized to provide SSY account facilities.
2. Log in to Internet Banking:
   • Log in to your internet banking account using your user ID and password. If you do not have an internet banking account, you may need to register for one.
3. Navigate to New Account Opening:
   • In the Internet banking portal, navigate to the section for new account openings. Look for the Sukanya Samriddhi Yojana account opening option.
4. Fill in the Application Form:
   • Fill in the required details online, including personal details of the girl child, parent/guardian information, and the initial deposit amount.
5. Upload Necessary Documents:
   • Upload scanned copies of the necessary documents, including:
     • Birth certificate of the girl child
     • Identity proof of the parent/guardian
     • Address proof of the parent/guardian
     • Recent passport-sized photographs of the girl child and the parent/guardian
6. Make the Initial Deposit:
   • Make the initial deposit online through net banking, which can be done via transfer from your existing bank account.
7. Confirmation and Passbook:
   • After the successful processing of your application, you will receive a confirmation message or email. The passbook can either be collected from the bank branch or will be sent to your registered address.

Rules for Withdrawal and Premature Withdrawal from SSY Accounts

Partial Withdrawal:

1. Eligibility for Partial Withdrawal: Partial withdrawal is allowed when the girl child reaches the age of 18 years.
2. Purpose of Withdrawal: The withdrawal is primarily intended to meet the expenses related to the higher education of the girl child.
3. Amount of Withdrawal: Up to 50% of the balance at the end of the preceding financial year can be withdrawn.
4. Documentation: Proof of admission to an educational institution is required to justify the withdrawal.

Premature Withdrawal:

1. Conditions for Premature Withdrawal: Premature closure of the account is permitted under certain specific conditions:
   • In the event of the death of the account holder (girl child), the balance along with the accrued interest will be paid to the guardian or nominee.
   • In cases of extreme compassionate grounds such as medical emergencies involving life-threatening diseases or the death of the guardian, premature withdrawal can be considered. However, proper documentation and verification are required.
2. Approval: Premature withdrawals are subject to approval by the competent authority and are generally not encouraged unless necessary.

Account Closure:

1. Maturity: The SSY account matures after 21 years from opening. However, if the girl child gets married before the completion of 21 years, the account can be closed provided she is at least 18 years old at the time of marriage.
2. Full Withdrawal: Upon maturity or marriage (whichever is earlier), the entire balance, including the interest, can be withdrawn. The account holder needs to provide a marriage certificate as proof if closing the account due to marriage.
3. Intimation: The guardian must inform the bank or post office where the account is held about the marriage of the girl child to initiate the closure process.

Regular Withdrawals:

1. Deposit Term: Deposits into the SSY account are required only for the first 15 years. No deposits are needed from the 16th year to the 21st year.
2. Interest Accrual: Even after the completion of 15 years of deposits, the account continues to earn interest until it matures or is closed upon the girl child’s marriage.

Frequently Asked Questions (FAQs)

1. What are the tax benefits of investing in the SSY scheme?

• Investments in SSY are eligible for tax deductions under Section 80C, and the interest earned and maturity amount are tax-free.

2. Is there a limit to the number of SSY accounts a family can open?

• Yes, a family can open up to two SSY accounts for two girl children. In the case of twins or triplets, additional accounts are allowed.

3. What happens if the minimum deposit is not made in a financial year?

• If the minimum deposit of INR 250 is not made in a financial year, the account becomes inactive, but it can be revived by paying a penalty along with the minimum required deposit.