All you need to know about Sukanya Samridhhi Yojana (SSY)

If you are looking for an option to save money for your daughter’s bright future then the best time to start is now. But Wait! Are you confused where you should invest for your girl child?

We are here to help!

There is a scheme started by the Government of India where you can make small investments annually for the education or marriage of your daughter and a scheme that pays a good rate of interest.

We are talking about the Sukanya Samridhi Yojana (SSY).

This scheme was launched by Modi government as a part of the famous ‘Beti Bachao Beti Padhao’ initiative on January 22, 2015 by Prime Minister of India Narendra Modi. The main objective of the scheme was to promote the education of the girl child and to encourage the families to save for the girls’ future needs like higher education and marriage expenses.

The scheme allows the families to deposit a small amount annually towards the scheme and earn a handsome rate of interest which currently is 8.1% along with tax benefits.

In this article you will find all the information you need to know about the Sukanya Samridhhi Yojana (SSY).

Who can open a Sukanya Samriddhi Account?

The Sukanya Samriddhi Account can be opened either by the parents or the legal guardian of the girl child. The account can be opened right after her birth till the time she turns 10.

What is the eligibility criteria to open SSY account?

The account can be opened only by parents or legal guardians of the girl child.

The child and her parents should be residents of India.

The maximum number of accounts that can be opened is one each if there are two girl child in the family except in case of twins where three accounts are permitted.

If the girl child is the single child in the family, sukanya samriddhi account cannot be opened.

Deposits in the account can be made by parents/legal guardian till the child turns 18 years of age.

After obtaining the age of 18 years the girl alone can operate the account.

What documents are required to open an SSY Account?

Following is the list of documents that are required at the time of opening an SSY account:

• Sukanya Samriddhi Registration form which is correctly filled.
• Birth Certificate of the girl child for whom the account is being opened.
•  ID proof of the depositor.
• Residential proof of the depositor (parents/legal guardian).

How much amount can be deposited in the account?

The account can be opened with a small initial deposit of rupees 250 after which a any amount can be deposited in the multiples of 100 but the minimum amount to be deposited should be rupees 250.

On a single or multiple occasions one cannot deposit more than rupees 1,50,000 in a given financial year.

The deposits in the account can be made only for a period of 15 years from the date of opening of the account.

What is the penalty in case of failure of deposits?

If the minimum amount is not deposited in the account at regular intervals there is a penalty of Rs.50 charged per year.

If the amount of penalty is not paid then the entire deposit (including the amount deposited before the date of default) will earn an interest at a rate equivalent to the post office savings bank account rate.

The excess of interest paid in such case will be reversed.

Through which mode the deposits can be made?

The deposits in the sukanya samriddhi account can be made either in cash or through a cheque or a demand draft.

The depositor needs to make an endorsement at the back of such instruments and sign it to indicate the name and account number of the account holder.

The deposits in the account can also be made through electronic means provided there is CBS (core banking solution) available in them.

When will the account mature?

The account opened under SSY will mature on completion of 21 years calculated from the date of opening of account.

When can the account be closed prematurely?

In case of sudden death of the account holder the account will be immediately closed after the production of the death certificate by the responsible authority.

In case the account is prematurely closed the balance in the account will be paid along with the amount of interest till the month preceding the month of closure, to the guardian of the account holder.

In case the account is closed prematurely on grounds of receiving medical support to fight a life threating disease the entire deposit will get interest at the rate of Post Office Savings Bank Account.

A request for premature closure of the account can be made only after the completion of five years from the date of opening of the account.

What are the rules of partial withdrawal under SSY?

In order to meet financial requirements like meeting the education expenses, partial withdrawal is allowed.

However, the amount that will be paid will be either 50 percent of the balance or actual amount of the fee required to be paid.

Partial withdrawal is allowed only after the account holder obtains 18 years of age.

What are the tax benefits available to SSY account holders?

The sukanya samriddhi yojana offers the highest tax benefits. It comes with the EEE status (Exempt-exempt-exempt) where annual deposits made towards the scheme qualify for Section 80C and the maturity benefits are not taxable.