An SSY account can be opened by the parents or legal guardians of a girl child who is below the age of 10.
With an aim to address the declining sex ratio and increasing cases of sexual discrimination, the Government of India launched a social campaign known as "Beti Bachao, Beti Padhao" on January 22, 2015. The literal meaning of this campaign translates to, "Save daughters, educate daughters".
The main objective of this campaign was to achieve three main concerns:
- Stop gender discrimination and abolish the practice of female foeticide
- Ensure survival and optimum protection of girls in India
- Provide proper education and work opportunities to girls
Sukanya Samriddhi Yojana (SSY) was one of the Government's pet schemes launched under the Beti Bachao, Beti Padhao campaign. The main aim of this scheme was to help parents or legal guardians of girl children to raise corpus for their wedding and higher education. Keep reading to know more details of this scheme.
What is Sukanya Samriddhi Yojana (SSY)?
As stated above, the Sukanya Samriddhi Yojana is aimed at tackling two main issues associated with a girl child in India – her education and marriage. This scheme focuses on ensuring a bright future for girls in India by helping their parents build sufficient funds for meeting the expenses required for their higher education and marriage.
For this purpose, the Government of India introduced a particular deposit account known as Sukanya Samriddhi Account.
Who can open a Sukanya Samriddhi Account?
A Sukanya Samriddhi Account can be opened by a parent or legal guardian of a girl child, below the age of 10. The beneficiaries can approach a post office or a bank (which offers this scheme) to open a Sukanya Samriddhi Account. However, do keep in mind that only one Sukanya Samriddhi Account can be opened for a single girl child.
It means that both the parents cannot open a Sukanya Samriddhi Account under the name of the same girl child. Also, these accounts can be opened for only two girls in a family as per the scheme rules. However, in the case of twins or triplet girls, more than two accounts can be opened by the parents or guardians.
Who can invest in a Sukanya Samriddhi Account?
The parents or guardians of the girl child can deposit in her Sukanya Samriddhi Account on her behalf till she attains the age of 10. After the age of 10, either the parents or the girl child herself can deposit the amount and operate the account. After the girl attains the age of 18, her Sukanya Samriddhi Account has to be mandatorily operated by herself only.
What is the minimum and maximum amount that can be deposited?
At the time of opening the account, a minimum of ₹250 has to be deposited in it. Once the account is opened, the beneficiary has to make a minimum deposit of ₹250 every financial year. Above that, he/she can deposit any amount in the multiples of ₹50. The maximum amount that one can deposit in a Sukanya Samriddhi Account during a financial year is ₹1.5 lakh.
These deposits can be made till the completion of 15 years from the date of opening the account. In case the beneficiary fails to deposit the minimum amount of ₹250 in any financial year, the given Sukanya Samriddhi Account will be treated as a default account, except if default is due to death of the parent or guardian who opened the account.
What is the interest rate on a Sukanya Samriddhi Account?
As with other Government schemes, the interest rate for the Sukanya Samriddhi Account is decided by the Government and is revised every quarter. Since April 2020, the interest rate for these accounts is fixed at 7.6% per annum (compounded annually). Earlier, it was 8.4% since July 2019.
Still, the rate of interest offered on this account is higher than other fixed-benefit savings instruments such as Fixed Deposits, Recurring Deposits etc.
The interest on a Sukanya Samriddhi Account is calculated on a yearly compounding basis on the lowest available balance in the account between the fifth day and last day of the month. The actual interest earning is credited into the account after the end of every financial year.
What is the duration of this account?
The deposits under the Sukanya Samriddhi Account have to be made until the completion of 15 years from the opening date. The account gets matured after the completion of 21 years from the date of its opening. Post which, the maturity amount (accumulated corpus + interest amount) will be paid to the girl on whose name the account is opened.
Premature closure of a Sukanya Samriddhi Account is permitted under the following conditions:
- Death of the parent or guardian
- The girl child is diagnosed with a life-threatening disease and needs medical treatment
What are the tax benefits available under the Sukanya Samriddhi scheme?
A Sukanya Samriddhi Account is eligible for EEE or Exempt-Exempt-Exempt status under the Income Tax Act of 1961. It means that the deposits made under the Sukanya Samriddhi scheme, interest earned on these deposits, and the maturity amount are exempted from the income tax under section 80C of The IT Act.
Documents required to open a Sukanya Samriddhi Account
To open a Sukanya Samriddhi Account, an applicant can approach a post office or the Reserve Bank of India or a public or private sector bank such as ICICI Bank. Below are the documents that he/she needs to carry:
- Duly filled SSY account opening form
- Birth certificate of the girl child
- PAN card of the guardian/parent
- Aadhar card of the guardian/parent