Sukanya Samriddhi Yojana (SSY) Details
The current government is taking lots of initiatives for a girl child, such as the ‘Beti Bachao Beti Padhao’ initiative. Sukanya Samridhi Yojana is one such scheme which helps to make a girl child independent for her future. SSY is a deposit focussed on savings for a girls' education or marriage.
What is the Sukanya Samriddhi Yojana (SSY) ?
Sukanya Samriddhi (SSY) Account is a Government of India supported savings scheme, meant to help save for the girl’s education and marriage from a very early stage. Under this scheme either parent may open a savings account in the name of the girl child in the post offices and designated private and public banks. The interest rate for this scheme is declared quarterly like other post office schemes.
Why should one invest in SSY?
- It gives a higher return compared to another normal investment scheme.
- You can invest a minimum of 250 rs to a maximum of 150,000 rs in a financial year.
- Triple Tax Benefit - Principal investment, interest earned as well as maturity amount is tax-free.
Key Scheme Information
- Currently SSY offers an annual interest of 7.60%
- Lock-in period: 21 years from the date of opening of account
- To open the account girl age should be less than 10
- From the date of opening the account, the amount should be deposited for a period of 15 years.
- The facility of partial withdrawal is available after the account holder attains the age of 18
Who can Invest in Sukanya Samriddhi SSY?
One must fulfill the eligibility conditions of Sukanya Samriddhi Yojana. According to the rules, the following people are eligible to open Sukanya Samriddhi account:
a) Girls should not be more than 10 years of age
b) Should be a resident citizen of India
c) The account cannot be opened for more than two girls in a single family
Disadvantages of Sukanya Samriddhi Yojana
Every good investment comes with its share of disadvantages too. Similarly, Sukanya Samriddhi Yojana also has some negatives. Some of the drawbacks of the scheme are mentioned below:
- Lock-in period: The account is only useful if one is looking to invest for the long-term. It has a maturity of 21 years from the opening of the account.
- Maximum 2 Accounts: One can open only 2 Sukanya Samriddhi accounts. This is a drawback in case someone has 3 daughters. However, there is an exception in case of twins or triplets, in which case 3 accounts are permitted.
- Pre-mature Withdrawal: Withdrawal prior to maturity is not permitted except in the case of death of the child.
- Variable interest rates: The Government revises the interest rates payable on all the small savings schemes every quarter.
The historical interest rates of this government scheme for girls are as follows:
|Time Period||Interest rate (%)|
|Jan to march 2020 (Q4 FY 2019-20)||8.4|
|Oct to dec 2019 (Q3 FY 2019-20)||8.4|
|July to sept 2019 (Q2 FY 2019-20)||8.4|
|April 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 sept 2018 (Q2 FY 2018-19)||8.1|
|April 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 sept 2017 (Q2 FY 2017-18)||8.3|
|April to june 2017 (Q1 FY 2017-18)||8.4|
What is the Difference between a child Fixed Deposit and the Sukanya Samriddhi yojana?
It is a long-term investment plan whereas fixed deposits can be used as short-term as well as long-term investment plans. Small tenured FDs can help you secure your investment against inflation, while long-acting FDs can help you accumulate a corpus for future needs.
Difference between a Child FD & Sukanya Samriddhi Yojana
|Child FD||Sukanya Samriddhi SSY|
|Any Indian citizen irrespective of age or gender can open FD.||Sukanya Samriddhi account can be opened only for the girl child below 10 years of age.|
|The online application can be made for fixed deposits.||No online method of operation/account opening is possible for the Sukanya Samriddhi account.|
|A person can have more than one FD account.||In the case of the Sukanya scheme, only one account can be opened for a girl child, which has two accounts per family.|
|A fixed deposit requires a deposit of Rs 100||Whereas the Sukanya scheme requires a minimum of Rs 250 per year.|
Comparison of Bajaj Finance Child FD vs Mutual Funds Vs SSY
|Benefit||Child FD||Mutual fund||Sukanya Samriddhi Yojana|
Bajaj Finance offers 8.35% interest rate on child FD
In addition, Bajaj Finance FD offers an additional 0.10% interest on the renewal of your FD.
|Equity Mutual funds have given 12-15% returns in the long-term||Sukanya Samriddhi Yojana offers 7.60% interest rate|
|Tenure||1-5 year||No fixed Tenure||Age of 21 years for education and marriage|
|Availability||Online & Offline||Online & Offline||Post Office or Bank (only offline)|
|Flexibility||Withdrawal of the entire amount can be possible without lock-in in the case of Bajaj Finance FD.||Mutual Funds are highly flexible as they can be entered into and exited from at any time.||In the case of the Sukanya Samriddhi account, you can withdraw 50% of the amount deposited only after the girl child reaches the age of 18 years.|
|Gender / age restrictions||No|
|Only for girls under 10 years of age|
|Emergency fund||Can take loan against FD||Can redeem without penalty and interest||No|
As experts, we provide you with good options according to your needs. And as an investor, it depends on your requirement which scheme is most suited for you. Investing in both SSY and mutual funds has its advantages. While SSY offers tax rebates and is supported by the government, they offer returns which are lower than the expected returns from equity mutual funds. The advantage of the scheme is that it comes with a lock-in, which can establish the financial discipline required for your child's future. Depending on your approach to investments, you could select the SSY for a lock-in and security. If you are someone who is open to a little more risk and can invest in a disciplined method, you could invest in equity mutual funds through the SIP route.
Q1. What is Sukanya Samriddhi Yojana?
Ans. SSY is a small savings scheme especially made for girl children as a part of the 'Beti Bachao Beti Padhao' campaign. The interest on this scheme is currently 7.60%. Investment in SSY also provides income tax benefits under Section 80C of the Income Tax Act, 1961.
Q2. What will be the maturity amount in Sukanya Samriddhi Yojana?
Ans SSY account matures after 21 years from the date of opening of the account. However, one needs to only make deposits for 14 years after opening of account. The deposited amount will continue to earn interest after the 14th year until maturity. Note that an SSY account will be terminated when 21 years are completed from account opening date.
Q3. Is Sukanya Samriddhi's account safe?
Ans. Both the Public Provident Fund (PPF) scheme and Sukanya Samriddhi Yojana are supported by the Government of India. Therefore, any contributions made to the scheme are safe and secure.
Q4. How can I open Sukanya Samriddhi Account?
- Fill in the SSY account opening form.
- Have documents ready with photos.
- Pay the deposit amount (any amount between Rs 250 and Rs.1,50,000
- A standing instruction can be given in the branch or an automatic credit can be set through NetBanking.
Q5. What is the best investment plan for girls?
- Central Government Sponsored Girl Schemes
- Save daughter, teach daughter
- Sukanya Samriddhi Yojana
- Balika Samridhi Yojana
- CBSE Udyan Scheme
- National scheme of incentives for girls for secondary education.
- Dhanalakshmi Scheme
- Ladli scheme of Haryana
- Ladli Laxmi Yojana of Madhya Pradesh
Q6. Can Sukanya Samriddhi's account be closed?
Ans: Sukanya Samriddhi Account can be changed based on premature marriage, change in status such as change of citizenship and place of residence, only after keeping the deposit for 5 years.
Q7. Is Sukanya Samriddhi Yojana tax-free?
Ans: SSY was launched as a part of the Government's 'Beti Bachao Beti Padhao' campaign. It is currently offering 7.60% and provides income tax benefits under Section 80C of the Income Tax Act, 1961. Even the returns in the scheme are tax-free.
Q8. Can both parents open Sukanya Samriddhi Yojana?
Ans: Yes, a parent or legal guardian can open a maximum of two accounts for two girls. A parent or legal guardian can open a maximum of three accounts in case of twins or triplets.
Q9. How much money will I get from Sukanya Samriddhi Yojana at maturity if I invest Rs. 150000 every year?
Ans. Investing Rs. 1,50,000 every year for the next 14 years will get you a total of Rs. 65,93,068 at the end of the 21st year.