Sukanya Samriddhi Yojana (SSY) is a government-backed scheme for the benefit of the girl child. SSY was launched by Prime Minister Narendra Modi on 22nd January 2015 as a part of ‘Beti Bachao Beti Padhao’ Campaign. SSY is a small deposit scheme exclusively for the girl child. The scheme aims to provide education and marriage expenses. It helps to encourage parents to maintain the fund for future education and marriage expenses of their daughters.
One can invest in SSY scheme through post offices or public sector banks and three private sector banks like HDFC Bank, Axis Bank, and ICICI Bank. The girl child should be below the age of 10 years and it can be only opened by parents or legal guardians.
The minimum amount that can be invested is Rs. 250 per annum and the maximum is Rs. 1,50,000 per annum. The maturity period is 21 years. Till now under this scheme around 2.73 crore accounts have been opened up and nearly Rs 1.19 lakh crore deposited.
SSY Interest Rate 2024
The government declares SSY interest rate quarterly. The interest rate for the 1st quarter of FY 2024-25 is 8.2% For Q4 (Jan-Mar) of FY 2023-24, the SSY interest rate was set at 8.2% p.a. From the past three quarters, there has been no change in the scheme’s interest rate.
SSY Advantages
1. Tax benefits: The income that you will earn as interest and principal amount during the entire tenure are tax-exempt under Section 80C up to Rs. 1,50,000.
2. High-interest rates: SSY provided high interest compared to other small saving schemes. Currently, SSY is providing 8.2% p.a.
3. Easy transferability: If you wish to transfer anywhere in India from one post office/Bank to another it can be done easily.
4. Benefits of withdrawal: You can do premature withdrawal of up to 50% of the investment after the child reaches 18 years of age even if she is not married.
5. Compounding: The interest is earned even after maturity if an account is not closed.
SSY vs Fixed Deposit
| Basis | Sukanya Samriddhi Yojana | Fixed Deposit |
| Age | Birth up to 10 years | 18 years |
| Gender | Only girl child | No gender-specific |
| Purpose | Educational and marriage expenses | Depends upon account holder |
| Minimum Deposit | Rs. 250 | Differ from bank to bank |
| Maximum Deposit | Rs. 1,50,000 | No Limit |
| Interest Rate | 8.2% (changes quarterly) | Depends upon the bank, tenure, and amount invested |
| Tax Benefit | Rs. 1,50,00 under section 80C | Up to Rs. 1,50,000 and interest is taxable |
| Tenure | 21 years | Usually 7 days-10 years |
| Loan Facility | Not available | Available |
| Nomination Facility | Not available | Available |
| Premature withdrawal | Up to 50% after 18 years if not getting married | Allowed but with penalty |
Who can invest in SSY?
A girl child of a family member who is the below age of 10 years. The girl child must be a resident of India and only parents or legal guardians can open the account on her behalf.
Only two SSY accounts can be opened by each family, i.e. one for each girl child. SSY account can be opened for more than two girls in specific cases mentioned below:
- If a girl child is born before the birth of twin or triplet girls, or if triplets are born first, it is permissible to open a third account.
- However, if a girl child is born after the birth of twin or triplet girls, opening a third SSY account is not allowed.
How is SSY interest calculated?
The SSY account calculates interest based on the lowest balance held between the fifth day and the end of each month. Interest is credited annually, at the end of the financial year.
To calculate interest earned on an SSY account, use the formula:
A = P(1+r/n)^nt
Where:
– P represents the initial deposit
– r is the interest rate
– n denotes the number of times interest is compounded per year
– t signifies the number of years
– A indicates the amount at maturity
Because SSY interest compounds annually, the manual calculation can be complex. Utilize the Sukanya Samriddhi Yojana Calculator by entering details such as the yearly investment amount, the girl child’s age, and the account commencement year to determine the maturity amount accurately.
Want to learn the science behind personal finance and easily achieve all your financial goals with peace of mind? The help is here.
Disclaimer: The above content is for informational purposes only. Please consult a SEBI-registered investment advisor before investing in any scheme.
