What is Sukanya Samriddhi Yojana (SSY) ?
The Sukanya Samriddhi Yojana (SSY) is a scheme under Beti Bachao Beti padhao program of Prime Minister Narendra Modi. SSY account will ensure a bright future for girl children in India. This scheme is to facilitate proper education and carefree marriage expenses. The scheme has well been accepted by the masses in wake of the financial security and independence it would provide to the girl child as well as their parents and guardians.
It can be opened by the parents of a girl child below the age of 10 years. Scheme offer guaranteed interest income and also tax exemptions available , this scheme is good for the parent of a girl child, to provide for her higher education and/or marriage and secure her financial future.
Features of Sukanya Samriddhi Yojana Account (SSY)
- A bank account can be opened for girl child below 10 years.
- Deposit with 15 years with maturity at 21 years.
- The facility of 50% payment after 18 years age of girl child.
- The facility of account closer to marriage after the age of 18 years.
- Deposit minimum Rs.250 and maximum Rs.1.5 lack per year.
- Highest interest rate amongst all other small saving schemes.
- Income Tax benefit under section 80C of Income Tax
- Premature closer is allowed in event of the death of the depositors or in cases of extreme compassionate grounds such as medical support in life-threatening diseases to be authorized by an order by the Central Government.
- In case of irregular payment penalty of Rs.50 per year along with the minimum specified amount per year.
- Mode of payment is cash/Cheque/DD /online transfer through Net banking.
Who Can open Sukanya Samriddhi Yojana Account (SSY) :
Government has given detail guidelines that who can open Sukanya Samriddhi Yojana account and eligibility norms to open SSY accounts.
The Following are the criteria for opening a Sukanya Samriddhi Yojana :
- Sukanya Samriddhi Yojana account can be opened only in the name of the girl child by her parents or legal guardians.
- Girl child age should be below 10 years at the time of account opening.
- Maximum two SSY account can be open in the family.
Advantages of Investing in Sukanya Samriddhi Yojana Account (SSY)
- Highest Interest Rate among all Small Savings Schemes offered by Govt of India – Sukanya Samradhi Yojna offers a Higher fixed rate of return (currently 8.5% per annum for Q4 FY 2018-19) as compared to other government-backed tax saving schemes such as PPF. Interest will be compounded yearly i.e. will be credited on a yearly basis. It will be accrued on a monthly basis on the lowest balance between 5th and last day of the month.
- Best Instrument to save Tax – In order to encourage people to open sukanya samriddhi account ,government has exempted contribution to this account u/s 80C of income tax Act 1961. Sukanya samridhhi yojna provides tax benefits under section 80c is up to 1.5 Lakh annually.
- Maturity amount to be Paid to Girl Child- maturity amount of SSY account with accrued interest will be paid directly to the account holder i.e. Girl Child. It gives financial support to the Girl child.
- Flexible investment option with a minimum deposit of Rs. 250 in a year (max. Rs. 1.5 lacks P.a.
- Guaranteed returns instrument backed by the Government of India (sovereign guarantee)
- Long term investment hence provides the benefit of compounding-There are lock-in period in Sukanya samriddhi yojna for this reason your investment are compounded over a long period of time to get a good return.
- Can be freely transferred from one bank to another bank and one city to another city
What will be the value of my investment in SSY Account?
The benefit of any investment can only be determined based on how much the investment grows over time. The following is a sample calculation showing the high returns you can get by making contributions to the Sukanya Samriddhi Yojana.
Let’s assume the following:
Annual investments = Rs. 1 lakh
Investment Period = 15 years
Total amount invested at the end of 15 years = Rs. 15 lakh
Value of SSY account Investments at the end of 15 years consider 8% per annum rate of interest = Rs. 28.32 lakh. Thus you can almost double your money by investing in this guaranteed return investment in the long term.
If you invest invested Rs. 1000 per month for 14 years and compounded remaining amount till the end of 21 years then you will get approximate Rs. 6.41 Lakh. We have assumed the rate of interest is 9.1% p.a. (Interest rate is decided by the government and it is changing every quarter .below table is just for example.
Documents required for Sukanya Samriddhi Account Yojana (SSY)
Date of Birth certificate of the girl child:
To open SSY account one should need to submit date of birth proof of girl child to a bank. Generally, certificate arranged by the hospital where girl child born.
Address proof of the parents of the girl child:
To open SSY account, parents address proof required, one can submit any one of the documents for proof of address i.e Voter ID card, Passport, Driving License, Electricity or Telephone Bill, Election ID Card, Ration Card or any other address proof issued by the Government of India
Identity Proof of the parents:
To open SSY account, parents Identity proof required, one can submit any one of the documents for identity proof like passport, PAN card, Voter id card or any other valid id proof issued by government.
Two Photo of the Parent.
Sukanya Samriddhi Yojana (SSY) Interest Rates
The Sukanya Samriddhi Yojana interest rate for July to September 2019 is 8.4%. The interest rate on the Sukanya Samriddhi Yojana is fixed by the government and reviewed every quarter. The following are the historic interest rates of this government scheme for the girl child:
|Time Period||Interest Rate (%)|
|July to Sep 2019 (Q2 FY 2019-20)||8.4|
|Apr to June 2019 (Q1 FY 2019-20)||8.5|
|Jan to March 2019 (Q4 FY 2018-19)||8.5|
|Oct to Dec 2018 (Q3 FY 2018-19)||8.5|
|July to Sep 2018 (Q2 FY 2018-19)||8.1|
|Apr to June 2018 (Q1 FY 2018-19)||8.1|
|Jan to March 2018 (Q4 FY 2017-18)||8.1|
|Oct to Dec 2017 (Q3 FY 2017-18)||8.3|
|July to Sep 2017 (Q2 FY 2017-18)||8.3|
|Apr to June 2017 (Q1 FY 2017-18)||8.4|
How to invest in the Sukanya Samriddhi Yojana
You can invest in this scheme through your nearby post office or designated branches of participating public and private banks. You will need to submit KYC documents like Passport,adhar card, etc. along with the required form and initial deposit by cheque/draft.
Sukanya Samriddhi Yojana Application Form
You can download sukanya samriddhi yojna form from below links:
Minimum and Maximum Amount for SSY Account
The minimum annual contribution to the Sukanya Samriddhi Account is Rs.250 and the maximum of Rs.1.50 lakh in a financial year. You have to invest at least the minimum amount every year for up to 15 years from the date of account opening. After this period the account will continue to earn interest till maturity.
Tenure of Sukanya Samriddhi Yojana Account
Sukanya Samriddhi Yojana has a tenure equal to the time the girl child is 21 years of age or upon her marriage attaining the age of majority (18 years). However, contributions only need to be made for 15 years. Thereafter the account continues to earn interest until maturity even if no deposits are made into it.
How to check the balance of Sukanya Samriddhi account
You can check the balance of your Sukanya Samriddhi account by online. This facility is offered by many of banks.
Tax Rules of Sukanya Samriddhi Yojana
From taxation, SSY investments are designated as an EEE (Exempt, Exempt, Exempt) investment. This means that the principal invested, the interest earned as well as the maturity amount are tax-free. Under existing taxation rules of Sukanya Samriddhi Yojana, the tax deduction benefit on the principal amount invested is up to Rs 1.5 lakh per annum under Section 80C of the Income Tax Act, 1961.
Sukanya Samriddhi yojna account vs Public Provident Fund (PPF) which is Best?
|Particulars.||Sukanya Samriddhi Account (SSA)||Public Provident Fund (PPF)|
|Beneficiary||Only for Girl Child.||For every Indian Citizen.|
|Minimum Age Limit||Birth of a child to maximum 10 yrs of age allowed to open SSY account||No age limit.|
Maximum 2 accounts for each girl child.
|One can hold only one account in his name.|
|Number of Accounts|
|Maximum Contribution||Rs.1.5 lakhs in all accounts.||Rs.1.5 lakhs in all accounts.|
|Interest Rate||9.1% per annum for FY 2014-15.||8.70% per annum for FY 2014-15.|
|Tax Benefit on the Contribution||Contributed Amount will be deductible u/s 80C.||Contributed Amount will be deductible u/s 80C.|
|Time Period of contribution||Tenure of contribution is minimum14 years from the date of opening of an account.||15 years minimum and then in a spread of 5 years.|
|Maturity||After 21 years of the opening account.||15 years from the opening of an account.|
|Penalty||Rs.50 per year if default in payment||Rs.50 per year if default in payment|
|Premature Withdrawal||One can withdraw up to 50% for the girl’s higher education and marriage after 18 years of age.||Premature withdrawal allowed only in case the death of account holder|
|Loan||A loan is not allowed||Loan can be taken after 2 years.|
|Taxation on Maturity||No tax will be on the maturity amount.||No tax will be levied on the maturity amount.|
Sukanya Samriddhi Yojana is best investment option available with parents for a girl child, it is one of the safe investment instrument and the highest rate of return on investment although it provides good opportunity to save income tax under section 80c up to1.5 Lac annually. This scheme will take care of girl child education and marriage.
Thanks for reading…