Planning for your child’s future is one of the most important financial goals for any parent, and the Sukanya Samriddhi Yojana (SSY) is a game-changing savings scheme tailored specifically for a girl child. Launched under the Beti Bachao Beti Padhao initiative, SSY provides high returns, tax benefits, and a safe investment opportunity for parents to secure their daughter’s education and marriage expenses. With its attractive interest rates and government backing, this scheme has become a popular choice among Indian families.
In this blog, we will explore the key features, eligibility criteria, tax benefits, and step-by-step process to invest in Sukanya Samriddhi Yojana, ensuring you can make informed decisions to give your daughter a financially secure future.
What is Sukanya Samriddhi Yojana (SSY)
Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme launched as part of the Beti Bachao Beti Padhao initiative. It is designed to encourage parents to save for their daughter’s future, offering attractive interest rates, tax benefits under Section 80C, and a secure, long-term investment option. SSY allows parents or guardians to open an account for a girl child below 10 years of age, with the funds primarily aimed at covering her education and marriage expenses. This scheme not only promotes financial discipline but also empowers families to plan for their daughter’s aspirations efficiently.
Features of Sukanya Samriddhi Yojana (SSY)
1. Eligibility
The account can be opened for a girl child below 10 years of age.
A parent or legal guardian can open the account on behalf of the girl child.
Each family can open a maximum of two SSY accounts (one for each girl child).
2. Account Operation
The SSY account is operated by the parent/guardian until the girl turns 18 years old, after which she can manage the account herself.
3. Deposit Requirements
The minimum annual deposit is ₹250, and the maximum can go up to ₹1.5 lakh in a financial year.
Deposits can be made through cash, cheque, or online transfers.
4. Interest Rates
SSY offers a high interest rate (currently around 8% per annum) which is compounded annually.
The interest rate is revised quarterly by the Government of India.
5. Tenure and Maturity
The account matures after 21 years from the date of opening.
Partial withdrawal of up to 50% of the balance is allowed once the girl turns 18 for education purposes.
6. Tax Benefits
SSY qualifies for tax deductions under Section 80C of the Income Tax Act.
Both the deposit amount and interest earned are tax-free.
7. Penalty for Non-Deposit
If the minimum annual deposit of ₹250 is not made, the account will be considered inactive.
It can be reactivated by paying a small penalty of ₹50.
8. Flexibility
The account can be transferred from one post office or bank to another, anywhere in India.
SSY Tax benefits
The Sukanya Samriddhi Yojana (SSY) offers significant tax benefits, making it an attractive investment option for parents planning their daughter’s future. Contributions made to the SSY account qualify for tax deduction under Section 80C of the Income Tax Act, allowing you to claim deductions of up to ₹1.5 lakh annually.
Additionally, the scheme enjoys the Exempt-Exempt-Exempt (EEE) status, which means the deposits, the interest earned, and the maturity amount are all tax-free. This combination of tax savings and financial security makes SSY a powerful tool for long-term wealth creation while securing your child’s education and future expenses.
Documents required for Sukanya Samriddhi Yojana
To open a Sukanya Samriddhi Yojana (SSY) account, the following documents are required:
Birth Certificate of the Girl Child
Proof of age of the girl child (must be below 10 years of age).
Identity Proof of Parent/Guardian
Any government-issued ID such as:
- Aadhaar Card
- PAN Card
- Voter ID
- Passport
- Driving License
Address Proof of Parent/Guardian
Documents for address verification, such as:
- Aadhaar Card
- Utility Bills (Electricity/Water Bill)
- Passport
- Ration Card
- Driving License
Photograph
Recent passport-sized photographs of the parent/guardian and the girl child.
Duly Filled Application Form
The SSY account opening form, available at post offices or authorized banks.
These documents ensure proper identification and verification of the applicant and the girl child to successfully open an SSY account. Make sure to carry originals for verification and photocopies for submission.
Comparison of SSY with various tax saving instruments
| Investment Option | Expected Returns | Taxability | Lock-in Period |
|---|---|---|---|
| Public Provident Fund (PPF) | 7.1% (approx, varies quarterly) | Returns are tax-free (Exempt-Exempt-Exempt or EEE category) | 15 years (partial withdrawals after 6 years) |
| Employees’ Provident Fund (EPF) | 8.15% (for FY 2023-24) | Returns are tax-free if withdrawn after 5 years of service | Till retirement (partial withdrawal for certain cases) |
| Equity Linked Savings Scheme (ELSS) | 12%-15% (market-linked) | Returns are taxable; long-term capital gains (LTCG) above ₹1.25 lakh taxed at 12.5% | 3 years |
| National Savings Certificate (NSC) | 7.7% (fixed, FY 2023-24) | Returns are taxable under “Income from Other Sources” | 5 years |
| Tax-Saving Fixed Deposits | 6%-7.5% (varies by bank) | Returns are taxable under “Income from Other Sources” | 5 years |
| Sukanya Samriddhi Yojana (SSY) | 8.0% (FY 2023-24) | Returns are tax-free (EEE category) | Till girl turns 21 years (partial withdrawal at 18 years) |
| Unit Linked Insurance Plans (ULIPs) | 4%-10% (market-linked) | Maturity proceeds are tax-free if annual premium ≤ ₹2.5 lakh (otherwise taxable) | 5 years |
| Senior Citizens Savings Scheme (SCSS) | 8.2% (FY 2023-24) | Returns are taxable under “Income from Other Sources” | 5 years (can be extended for 3 years) |
| Life Insurance Premiums | ~4%-6% (for traditional plans) | Maturity proceeds are tax-free if conditions are met | Till maturity of the policy |
| National Pension System (NPS) | Market-linked (~8%-10%) | 60% of the corpus is tax-free; 40% used for annuity is taxable | Till age 60 (partial withdrawal allowed) |
This table provides a concise overview to help you choose the best investment options under Section 80C based on your financial goals and tax-saving needs.
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