Sukanya Samriddhi Yojana (SSY)

Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme aimed at promoting the welfare of the girl child in India. The scheme was launched in 2015 under the Beti Bachao, Beti Padhao campaign, and offers an attractive interest rate, tax benefits, and a long-term savings option for parents/guardians looking to secure the future of their daughters. In this blog post, we will discuss the features, benefits, and eligibility criteria of the Sukanya Samriddhi Yojana scheme.

Features of Sukanya Samriddhi Yojana

1. Investment: A parent or guardian can open an account under the scheme in the name of a girl child below the age of 10 years. The minimum investment required is Rs. 250, and the maximum investment allowed is Rs. 1.5 lakh per financial year.
2. Interest Rate: The interest rate on the Sukanya Samriddhi Yojana is revised by the government every quarter. Currently, the interest rate is 7.6% per annum, which is compounded annually.
3. Tenure: The scheme has a tenure of 21 years from the date of opening the account. The account can be closed after the completion of the tenure or after the girl child’s marriage, whichever is earlier.
4. Withdrawals: Partial withdrawals of up to 50% of the account balance can be made after the girl child attains the age of 18 years for higher education or marriage purposes.
5. Tax Benefits: Contributions made towards the scheme are eligible for a tax deduction under Section 80C of the Income Tax Act. The interest earned and the maturity amount are also tax-free.

Benefits of Sukanya Samriddhi Yojana

1. Secured Future for the Girl Child: The scheme aims to provide a secure future for the girl child by encouraging parents to save for their future needs like education, marriage, and other expenses.
2. High-Interest Rate: The scheme offers an attractive interest rate of 7.6% per annum, which is higher than many other savings schemes.
3. Tax Benefits: The contributions made towards the scheme are eligible for a tax deduction, and the interest earned and the maturity amount are tax-free, providing significant tax benefits to the investors.
4. Low-Risk Investment: The scheme is a low-risk investment option as it is backed by the government, making it a safe investment option for parents/guardians looking to save for their daughter’s future.

Sukanya samriddhi yojana calculator

Let us consider an example to understand the calculation of Sukanya Samriddhi Yojana (SSY) better.

Suppose a parent opens an SSY account for their daughter, who is one year old, and invests Rs. 50,000 every year for 14 years. The interest rate offered by the scheme is 7.6% per annum.

Here is how the investment will grow over time:

As per the table above, at the end of 14 years, the total investment made by the parent is Rs. 7,00,000. The interest earned on the investment at 7.6% per annum is Rs. 1,94,439. Therefore, the total balance in the account is Rs. 8,94,439.

Note: The calculation assumes that the parent invests Rs. 50,000 every year for 14 years and the interest rate remains constant at 7.6% per annum. The actual returns may vary depending on the market conditions and the prevailing interest rates at the time of investment.

Sukanya samriddhi yojana interest rate

The Sukanya Samriddhi Yojana (SSY) was launched by the Government of India in 2015. Since then, the interest rates offered on SSY have fluctuated as per the market conditions and the prevailing economic environment. Here’s a brief history of the interest rates offered on SSY over the years:

• The scheme was launched in 2015 with an interest rate of 9.1% per annum.
• In 2016, the interest rate was reduced to 8.6% per annum.
• In 2017, the interest rate was further reduced to 8.4% per annum.
• In 2018, the interest rate was revised to 8.1% per annum.
• In 2019, the interest rate was increased to 8.5% per annum.
• In 2020, the interest rate was further increased to 8.6% per annum.
• In 2021, the interest rate was reduced to 7.6% per annum.

It is important to note that the interest rate offered on SSY is subject to change at the discretion of the Government of India. Therefore, investors should keep an eye on the interest rate announcements and invest accordingly. It is also important to remember that the returns earned on SSY investments are tax-free and can help in building a sizable corpus for the girl child’s education and marriage.

Sukanya Samriddhi Yojana interest rate 2023

• The rate of interest for the 1st quarter of FY 2023-2024, i.e. 1 April 2023 to 31 June 2023, has increased to 8%.
• The rate of interest for the 4th quarter of FY 2022-2023, i.e. 1 January 2023 to 31 March 2023, was 7.6%.
• The rate of interest for the 1st quarter of FY 2022-2023 i.e. 1 April 2022 to 30 June 2022 was 7.6%.

Eligibility Criteria for Sukanya Samriddhi Yojana

1. The account can be opened in the name of a girl child below the age of 10 years by her parent or guardian.
2. The parent/guardian can open only one account under the scheme for a maximum of two girl children.
3. The account can be opened in any post office or authorized bank.
4. The account can be opened with a minimum investment of Rs. 250 and a maximum investment of Rs. 1.5 lakh per financial year.

Tax benefits of Sukanya Samriddhi Yojana ( SSY ):

Sukanya Samriddhi Yojana (SSY) offers tax benefits to the investors under Section 80C of the Income Tax Act. The contributions made towards the scheme are eligible for a deduction of up to Rs. 1.5 lakh in a financial year. Additionally, the interest earned on the investment and the maturity amount are also tax-free.

Here are the key tax benefits of Sukanya Samriddhi Yojana:

1. Tax deduction under Section 80C: Contributions made towards Sukanya Samriddhi Yojana are eligible for a tax deduction under Section 80C of the Income Tax Act. The maximum deduction allowed under this section is Rs. 1.5 lakh per financial year. This deduction is available to the account holder or the parents/guardians who have opened the account.
2. Tax-free interest: The interest earned on the investment made in Sukanya Samriddhi Yojana is tax-free. The interest rate offered on the scheme is revised by the government every quarter and currently stands at 7.6% per annum. The interest is compounded annually and is credited to the account at the end of every financial year.
3. Tax-free maturity amount: The maturity amount received on the completion of the scheme’s tenure is also tax-free. The scheme has a tenure of 21 years from the date of opening the account. The account can be closed after the completion of the tenure or after the girl child’s marriage, whichever is earlier. The maturity amount is paid to the account holder or the girl child in whose name the account has been opened.
4. No tax on partial withdrawals: The scheme allows partial withdrawals of up to 50% of the account balance after the girl child attains the age of 18 years for higher education or marriage purposes. The amount withdrawn is tax-free.

In summary, Sukanya Samriddhi Yojana is an excellent investment option for parents/guardians looking to secure the financial future of their girl child while also availing tax benefits. The scheme offers a high-interest rate, tax benefits, and a long-term savings option.

Frequently Asked Questions ( FAQ )

Here are some frequently asked questions about the Sukanya Samriddhi Yojana (SSY) :

1. What is Sukanya Samriddhi Yojana?
   Sukanya Samriddhi Yojana is a savings scheme initiated by the Government of India to promote the welfare of the girl child. It is a small deposit scheme that allows parents or guardians to open a savings account in the name of their girl child until she attains the age of 18 years.
2. Who is eligible to open an account under Sukanya Samriddhi Yojana?
   The scheme is open to parents or legal guardians of a girl child who is an Indian resident. The account can be opened from the birth of the girl child until she attains the age of 10 years.
3. What is the minimum and maximum deposit amount in Sukanya Samriddhi Yojana?
   The minimum deposit amount is Rs. 250, and the maximum deposit amount is Rs. 1.5 lakh in a financial year. A maximum of two accounts can be opened for two different girl children in the same family.
4. What is the current interest rate on Sukanya Samriddhi Yojana deposits?
   The current interest rate is 7.6% per annum (as of April 2023). The interest is compounded annually and credited to the account at the end of the financial year.
5. What is the maturity period of the Sukanya Samriddhi Yojana account?
   The account matures when the girl child reaches the age of 21 years from the date of opening the account. However, partial withdrawals up to 50% of the balance are allowed for the higher education of the account holder after she attains the age of 18 years.
6. Is the deposit made under Sukanya Samriddhi Yojana tax-deductible?
   Yes, the deposit made under Sukanya Samriddhi Yojana is eligible for tax deduction under Section 80C of the Income Tax Act, 1961. The interest earned and the maturity amount are also tax-free.
7. Can the account be transferred from one place to another?
   Yes, the account can be transferred from one post office/bank to another and from one state to another. A transfer request has to be submitted to the post office/bank where the account is held.
8. What happens if the account holder becomes an NRI?
   If the account holder becomes an NRI, the account can be operated until its maturity, but the account cannot be extended or renewed after maturity. The account will earn interest as applicable to the Post Office Savings Account until its closure.

Conclusion

In conclusion, the Sukanya Samriddhi Yojana is a great initiative by the Government of India to promote the welfare of the girl child. This small deposit scheme not only helps in securing the financial future of a girl child but also encourages parents to save for their daughters’ education and other expenses. The tax benefits and the attractive interest rates make it a compelling investment option for parents looking to secure their daughter’s future.

Parents or guardians should consider opening an account under Sukanya Samriddhi Yojana as soon as possible to take advantage of the compounding interest and tax benefits. It is important to note that the scheme has a specific eligibility criteria and deposit limits, and any failure to meet these requirements can lead to penalties and loss of interest. Overall, the Sukanya Samriddhi Yojana is an excellent initiative that can go a long way in ensuring the financial security of a girl child and her future endeavors.

Low risk investments for first time investors ( or anyone risk averse )