Sukanya Samriddhi Yojana (SSY) is a government-sponsored small savings scheme designed for girl child. It was launched in 2015 as part of the Government initiative Beti Bachao, Beti Padhao campaign and can only be opened by the parents of a girl child under the age of ten at concerned post office and banks. A Sukanya Samriddhi Account is valid for 21 years, or until the girl child reaches the age of 18. The government declares the interest rate of SSY on a quarterly basis and hence the interest rate has been set at 7.6 percent per annum for Q1 (April-June) FY 2021-22. Apart from the interest rate and tax benefits, one of the main advantages of this scheme is that it can be transferred from one post office or bank to another. So coming back to the heading part here we will discuss about the deposit, eligibility, interest rate, tax benefits, process to open, withdrawal and tenure of this scheme.
Eligibility required to open an SSY account
Before opening a SSY account here are the required eligibility criteria that you need to consider:
- An SSY account can only be opened by the parents or legal guardians of a girl child.
- At the time of account opening, the girl child must be under the age of ten.
- In the name of a girl child, only one account can be opened by her legal guardians or parents.
- A family is only approved for two SSY accounts, one for each girl child in case of twins/triplets girls.
SSY Deposit Limit and Tenure
The Sukanya Samriddhi Account has a minimum annual contribution of Rs. 250 and an overall contribution of Rs. 1.5 lakh every fiscal year. From the date of account opening, you must contribute at least the minimum amount per year for up to 15 years. SSY has a maturity period until the girl child reaches the age of 21 or until she marries after reaching the age of 18. If an account holder fails to make the minimum deposit of Rs. 250 in a fiscal year then his or her SSY account is classified as a "Defaulted Account." This account can be reopened before the 15-year period of its opening by contributing a minimum of Rs. 250 plus Rs. 50 for each defaulted year. After the age of 18, a girl child can manage her own account. After submitting the required documents to the concerned post office or bank where the account is maintained, she will be eligible to operate the SSY until she reaches the age of eighteen.
SSY Premature Closure Rules
In the event of the account holder's death, the account can only be closed prematurely after 5 years. As a result, the PO Savings Account interest rate will apply from the date of death to the date of payment. Premature account closure is also possible in very critical conditions such as the account holder's serious illness or the death of the guardian who managed the account. To do so, one must submit a specified application form, as well as a pass book and other documents, to the authorized Post Office or bank.
SSY Withdrawal Rules
After a girl child reaches the age of 18 or has completed the 10th standard, she can withdraw money from her account. The account holder is allowed to withdraw up to 50% of the available balance at the preceding fiscal year for marriage or higher education of the girl child. Withdrawals can be made in one lump sum or in instalments of up to once a year for a period of five years, according to the prescribed limit and actual fee/other charge conditions.
SSY Tax Benefits Rules
Deposits in SSY are classified as EEE (Exempt, Exempt, Exempt) status. This ensures that the investment principal, interest gained, and maturity amount are non-taxable. The tax-deductible benefit on the principal amount invested under Section 80C of the Income Tax Act, 1961 is up to Rs 1.5 lakh per year under the current taxation laws of the Sukanya Samriddhi Yojana.
Transfer of SSY account
The truth of the matter is that the Sukanya Samriddhi Yojana Account can be conveniently transferred from one bank or post office to another is one of its main advantages. You can easily transfer this small savings scheme from one post office or bank to the other. For the same you need to fill out the application form and submit it along with the required documents at the concerned post or bank.
Sukanya Samriddhi Yojana Interest Rate
In contrast to other government-backed tax saving schemes, SSY promises a higher fixed rate of return (currently 7.6% per year for Q1 FY 2020-21) and the rate is reviewed every quarter by the government. Because SSY is backed by the government, it offers assured returns. On a compounded annual basis, interest is determined on the deposit balance. The interest is determined on the lowest balance in the account between the close of the fifth day and the end of the month for the calendar month. At the end of each financial year, the interest will be credited to the account.