Sukanya Samriddhi Account – A complete guide in India 2020 (features & benefits)

Updated: Jan 13, 2020

Indian govt has started Sukanya Samriddhi Yojana (SSY) to encourage parents to save money for their daughter’s future where they get some additional benefits as compared to traditional saving instruments like FDs.

The girl child should be the biological or legal child of parents.

Benefits of Sukanya Samriddhi Yojana

#1. Simple process

If you are a girl child’s parent, you can open Sukanya Samriddhi Yojana (SSY) account for your daughter till she turns 10. You can open the account in any authorized bank or post office. You can open only one account per girl child.

You can avail of this benefit for a maximum of 2 girls.

The documentation process of SSY is simple and required only documents-

  • Application form
  • Girl child’s birth certificate (or legal adoption certificate)
  • Parent’s Identity Proof
  • Parent’s Address Proof

#2. Flexible deposit options

You can open the account with a minimum amount of Rs. 250.

You can deposit a minimum of Rs. 250 and a maximum of Rs. 1,50,000 in one financial year. Earlier the minimum deposit amount was Rs. 1000. You can deposit in a single transaction or on multiple occasions but not exceeding Rs. 1.5 lakh every year.

You have to deposit the amount till 15 years from the date of the account opening. After that, you don’t have to deposit amount but you can receive benefits for the next 6 years.

For example, If you start SSY account for your daughter’s 2nd birthday. Now you have to deposit the money till your girl turns 17 after that you won’t deposit any money but the account will keep on earning interest till the girl turns 23.

You cannot open the SSY account online but you can set up automatic money transfer to SSY account. In which, every month a fixed amount from your account is transferred to SSY account through net banking. You have can reach out to your bank or you can do yourself from bank’s website.

#3. Higher interest rate than traditional saving methods

Sukanya Samriddhi Yojana currently giving 8.4% interest rate (Jan – March 2020) which is better than keeping money in a savings account or investing in recurring or fixed deposits.

Let’s compare the interest rates of different traditional investment methods with SSY.

Investment Method Interest rate from Jan 1, 2020
Savings Account 4%
Fixed Deposit – 1 year 6.9%
Fixed Deposit – 5 years 7.7%
PPF 7.9%
National Savings Certificate 7.9%
Kisan Vikas Patra 7.6%
Sukanya Samriddhi Yojana 8.4%

#4. Partial withdrawal & Maturity

Parents can do 2 withdrawals – one when the girl turns 18 and then at maturity of the scheme. You can withdraw 50% of the amount when your daughter completes 18 years. You can either receive a lump sum 50% amount or you can get the money in 5 installments.

You can receive the rest 50% amount at maturity after 21 years of account opening.

The provision of 2 withdrawals is kept to tackle the need for money at 2 important stages of the girl’s life – higher education and marriage of the girl.

#5. Tax benefit under 80C

SSY gives you complete tax exemption on your investments in 2 ways. You can get tax exemption on the amount deposited in the SSY account every year. Along with that, the money you get at maturity is also tax-free.

#6. Interest paid even after Maturity

A unique feature of Sukanya Samriddhi Yojana Account is that even after maturity if the account is not closed by the account holder, Interest shall be payable in that account till the final closure of the account. You cannot get this benefit in any other scheme.

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