Sukanya Samriddhi Yojana (SSY) | Rules, Deposits, Benefits and Differences

Sukanya Samriddhi Yojana: Sukanya Samriddhi Yojna is a scheme that came into effect on 2nd December 2014 and it was launched with an initiative to help girl children from various malpractices in the Indian Community. It deals with problems regarding education and marriage and directs the parents of a girl child to make systematic investments for their daughter’s marriage, education, and future.

• Opening of SSY Account
• SSY Account Deposits
• Interest on Deposits
• Maturity of SSY Account
• Premature Closure of SSY Account
• Withdrawal from Sukanya Samriddhi Yojna Account
• Tax Benefit under SSY Account
• Comparing Public Provident Fund (PPF) and Sukanya Samriddhi Account

Opening of SSY Account

Only a natural or a legal guardian has the authority to open an SSY account of their girl child. Anytime before the age of 10, this account can be opened.

Some points regarding this account are as follows;

• Only one account can be operated by the guardian in the name of the girl child. Multiple accounts cannot be operated for the save girl child.
• A maximum of only two accounts for two girl children is allowed to be opened by the guardian. The third account can be opened in the event of the birth of twin girls or if the first birth itself results in triplets.
• The Central Government has authorized SSY accounts to be opened in post offices and commercial bank branches (such as State Bank of India, Bank of Baroda, Punjab National Bank, etc.)
• If a girl child is a resident Indian citizen, she is eligible to open an SSY account at the time of opening the account and remains so until the account’s maturity period or closure. The scheme is not available for Non-resident.

SSY Account Deposits

• An SSY account can be opened with a first-time initial deposit of Rs. 1,000 and after that in any amount in multiples of Rs. 100.
• The required minimum amount to be deposited in each financial year is Rs. 1,000 (01st April to 31st March). The maximum limit on the amount during a financial year comes to Rs. 1,50,000.
• From the date of opening of such an account till the completion of 14 years, the deposits can be made in the account.
• An irregular account (in which a minimum of Rs. 1,000 per financial year has not been deposited) may be regularised by paying a penalty of Rs. 50 per year along with the minimum deposit for the years of default at any time before the completion of the fourteen years from the date of opening of the account.
• The deposit can be made in cash, cheque, or demand draft.
• For deduction under Section 80C, deposits made in the account are eligible, subject to a maximum limit of Rs. 1,50,000.

Interest on Deposits

• The highest Small Saving Scheme under SSY is the interest offered. The current interest rate is 8.1%.
• The Government notifies the interest rate for every year. The rate of interest is 0.75 bps or 0.75% more than the comparable G-Sec yield.
• Interest is compounded annually.
• For the calendar month, interest is calculated on the lowest balance in an account between the close of the 10th day and the end of the month.
• The account holder can opt for monthly interest.
• On the balance in the account, the interest is payable till the final closure of the account.

Maturity of SSY Account

• The maturity period of the account comes after the completion of 21 years from the date of opening the account.
• If the marriage of the account holder takes place before the completion of 21 years, the account is considered as matured. The account holder should not be below 18 years at the time of marriage.
• The interest keeps accruing until the account is finally closed by the account holder even though after the maturity period, no operations are permitted.

Premature Closure of SSY Account

• The account is closed immediately if the account holder passes away. The guardian of the account holder will then receive the balance along with interest (till the month preceding the month of premature closure of the account).
• It is recorded in writing, for security purposes, as the reason for the premature closure of the account. Only in medical support in life-threatening diseases, etc, or any other extreme reason can a premature withdrawal be authorized.

How to Transfer Sukanya Samriddhi Yojna (SSY) Account?

Withdrawal from Sukanya Samriddhi Yojna Account

• Up to 50% of the balance at credit at the end of the preceding financial year is allowed to be withdrawn in case of investment in higher education and marriage.
• When the account holder’s girl child reaches the age of 18 years, then only withdrawal from the account is allowed.

Tax Benefit under SSY Account

Exempt-Exempt-Exempt (EEE) is the status proclaimed by the SSY account which means;

• Under Section 80C of the Income Tax Act, 1961, the contribution made to the SSY account is eligible for deduction with a maximum limit of Rs. 1,50,000
• Under Section 10(11A) of the Income Tax Act, 1961, the accrued interest which is compounded annually against this account is exempted from tax.
• Under Section 10(11A) of the Income Tax Act, 1961, withdrawal proceeds are also exempted from tax which may be either premature or matured.

Comparing Public Provident Fund (PPF) and Sukanya Samriddhi Account

PARTICULARS	PPF	SSY ACCOUNT
Eligible person	Any Indian Citizen	Only girl child fewer than 10 years of age can open an account through the help of parents or guardian
Maximum investment	Rs.1,50,000/year	Rs.1,50,000/year
Minimum investment	Rs.500/per year	Rs.1,000/per year
Interest rate for 2015-16	8.7%	9.2%
Deductions allowed	Under Section 80C	Under Section 80C
Interest and withdrawals	PPF Withdrawals are Tax-free	Tax-free