Sukanya Samridhi Yojana for the Girl Child

Sukanya Samriddhi Yojana (SSY) was launched in 2015 for the girl child.  It is another small savings scheme like PPF from the government of India and it will be administered through post office and select banks. The maturity amount and the total interest paid on the scheme will be tax free under EEE like in PPF. Let us discuss the salient features of this Sukanya Samridhi Yojana.

It is a long term debt investment which can help the girl child for her higher education and marriage.

Sukanya Samridhi Yojana – Features

Under this scheme, the account can be opened for a girl child in the age group of 0 -10. The account can be opened by parents or legal guardian. The yearly investment is flexible and you can pay any amount between 250 – 1, 50,000 as you like in lump sum or in installments. If you don’t invest the minimum amount of 250 in a year, there will be a penalty of Rs. 50/- to continue the account. You can invest money for 15 years from the date of opening. The account will mature after 21 years from the date of opening of the account. In case of early marriage, the account will be closed on marriage after age 18.

Is there any early withdrawal option in Sukanya Samridhi Account?

Yes, 50% of the accumulation can be withdrawn after age 18.  This can help funding the child’s higher education.

What is the interest rate in Sukanya Samridhi Account – Is it fixed?

The interest rate for this scheme will be declared by government every quarter. The interest rate is 7.6% as on date.  Interest will be compounded annually.

What are the tax benefits under Sukanya Samridhi Account?

The investment upto 1.5 lakhs in a year will qualify for tax deduction under Section 80C of the Income Tax Act. But what is more attractive is the taxation of this scheme on maturity. The maturity amount including interest is totally tax free on withdrawal like PPF.

Can NRIs invest in Sukanya Samriddhi Yojana?

No, NRIs cannot invest in Sukanya Samriddhi Yojana. However, if the girl child is an Indian Resident, parents can open Sukanya Samriddhi Account for her.

If you already have Sukanya Samriddhi account the residential status of the girl child changes to NRI in future, you need to close the account.

Is it worth investing in Sukanya Samridhi account for your daughter?

This depends on your risk profile. If you are very particular about debt investments and don’t want to invest in equity you can think of this because, it will be better than other bank deposits and insurance schemes. The tax free withdrawal is an attraction here. But don’t think that the interest rate will continue to be in this range for such a long term. As per the interest rate in the country, it will also come down in the long term.

What you can do?

It is not advisable to create the entire amount for your daughter’s needs by investing in this scheme. If your daughter’s higher education is 15 years away, you can earn better returns by investing in equities through mutual funds. But you should not invest the entire amount in equities. For the debt portion, you can consider this scheme. When you are nearing the goals like higher education and marriage, you can reduce your allocation towards equity and can increase it towards debt. This account can be useful for this. You can withdraw 50% accumulation after age 18 for her higher education and the balance amount can be withdrawn for her marriage.

Along with an SIP in equity funds, this can be a suitable investment scheme for your daughter.

If you are looking for answer to a particular questions regarding Sukanya Samriddhi Scheme, here is the list of FAQs for your ready reference.

Who is eligible for Sukanya Samriddhi Yojana?

A girl child (Indian Resident) between the age of 0-10 years is eligible for Sukanya Samriddhi Yojana.

What is the minimum amount for Sukanya Samriddhi Yojana?

An account can be opened by depositing Rs 250 with the required documents (Note: earlier, the minimum amount was Rs. 1000). The minimum amount that can be deposited in a Sukanya Samriddhi Scheme is Rs. 250 per annum. The maximum limit is Rs. 1.5 Lakhs per annum for an account.

What is the maturity period of Sukanya Samriddhi Yojana?

The maturity period of Sukanya Samriddhi Yojana is 21 years. For example: If you open an account when the girl child is 8 years old, the account will mature when she will turn 29.

When can we withdraw money from Sukanya Samriddhi account?

 You can withdraw money from Sukanya Samriddhi account when the girl child turns 18 years old. There are 2 rules for withdrawal:

• Partial Withdrawal – Maximum 50% of the balance (of the preceding year) can be withdrawn for the higher education of girl child.
• Complete Withdrawal – After the completion of 21 years from date of opening the account or on marriage of the girl child, whichever is earlier. However, the account holder needs to provide an affidavit stating that she is not below the age of 18 at the time of closing the account.

How can we close Sukanya Samriddhi account?

 In the unfortunate event of death of the account holder, the scheme can be closed immediately by producing the death certificate.

Yes, the Sukanya Samriddhi account can be closed after 5 years. The pre-closure request can be made after 5 years of opening the account. This request is only considered under extreme compassionate grounds like life threatening disease.

Is Sukanya Samriddhi Account allowed under Section 80C?

Yes, Sukanya Samriddhi Yojana is part of 80C. However, the maximum limit for exemption is 1.5 Lakhs under Section 80C.

Is interest on Sukanya Samriddhi account taxable?

No, the interest on Sukanya Samriddhi account is not taxable. The scheme comes under EEE category

• Exempt at the time of investment
• Also Exempt at the time of accumulation
• Exempt at the time of withdrawal.

How many accounts can be opened?

Maximum 2 accounts can be opened for two girl children. You cannot open 2 accounts for one girl child.

You can open third account in the event of birth of twin girls as second birth or if the first birth itself results into three girl children, on production of a certificate to this effect from competent medical authorities where the birth of such twin or triplets occurred.

Can I deposit more than 1.5 lakh in Sukanya Samriddhi Yojana?

No, the maximum limit is 1.5 Lakhs per account. You cannot deposit more than 1.5 Lakhs in a single account. But if you have 2 accounts, you can deposit 1.5 Lakhs in each account, however, the tax benefits would be available only for a maximum amount of 1.5 Lakhs under section 80C.

How can I open account in Sukanya Samriddhi Yojana?

You can open Sukanya Samriddhi Account either through post office or from the list of 28 authorized banks.

Which banks offer Sukanya Samriddhi account?

You can check the list of authorized banks here:

Also Read: List of Authorized Banks for Sukanya Samriddhi

What are the documents required for Sukanya Samriddhi account?

The following document are required to open the scheme

• Account Opening Form
• Birth Certificate of Girl Child
• Address Proof of Parents/Guardian
• ID proof of guardian/parents

How can I check my Sukanya Samriddhi account?

You can check Sukanya Samriddhi Account online if your bank/post office has core banking facility. Otherwise, you can update your passbook by visiting nearest branch of your bank/post office.

Can we open Sukanya Samriddhi Yojana account online?

No, you cannot open Sukanya Samriddhi account online. Currently, authorized banks and post offices are not allowed to open the account online.

Can I transfer money online to Sukanya Samriddhi account?

Yes, you can pay your future installments online by giving standing instructions to the bank.

Can I open Sukanya Samriddhi account online in ICICI Bank? /HDFC Bank?

No, you cannot open Sukanya Samriddhi account online in ICICI Bank/HDFC Bank.

Which bank is best for Sukanya Samriddhi Yojana?

Since, the Government of India decides the interest rates of the scheme, it makes no difference in which bank you would want to open an account. Choose a bank that you are comfortable with.

Sukanya Samriddhi Yojana Penalty

An irregular account where a minimum amount of Rs. 250 has not been deposited may be regularized on payment of a penalty of fifty rupees per year.

Can Sukanya Samriddhi account be transferred from post office to bank?

Yes, you can transfer the account anywhere in India if the girl child in whose name the account stands shifts to a place other than the city or locality where the account stands.

Also, you can transfer Sukanya Samriddhi Account from post office to bank. You can go through the process by clicking on the link

Also Read: Process to transfer from Post Office to Bank

What is the benefit of Sukanya Samriddhi scheme?

Following are the benefits of Sukanya Samriddhi scheme –

• Interest rates are higher than most of the debt-oriented schemes like bank deposit and FDs/PPF.
• Since it’s a debt scheme by Govt. of India, chances of defaults are Nil.
• Tax benefits under Section 80C
• You can invest any amount between 250-1.5 Lakhs per year as per your cash position.
• Scheme comes under EEE as explained above. This is the most attractiveness of this scheme.

Drawback of Sukanya Samriddhi Yojana

Let’s see, what the drawbacks of Sukanya Samriddhi Yojana are –

• Lock in period is high in this scheme. You can not withdraw money till the girl child is 18 years old.
• You can withdraw only 50% at the time of higher education.
• Interest rates may higher today but may not be in the same range for long periods.
• Maturity proceeds would be in the hands of Girl Child.