Sukanya Samriddhi Yojana: Features, Eligibility, Documents Required & Application Process

Sukanya Samriddhi Yojana encourages parents to save money for the future of their daughters. This campaign rightfully translates to ‘Girl Child Prosperity Scheme’ which is exactly its motto. This scheme also offers tax benefits under Section 80C of Income Tax Act of 1961.

Keep reading to learn more about Sukanya Samriddhi Yojana.

What is Sukanya Samriddhi Yojana?

Sukanya Samriddhi Yojana is a savings scheme backed by the government of India. As is evident from the name, this scheme is designed especially for the welfare of the girl child. Investing in this child insurance scheme gives the power to parents and legal guardians to ensure financial security for a girl child aged 10 years or below.

This scheme was conceptualised by Ministry of Finance and launched by the present Prime Minister of India Narendra Modi on January 22 2015 as a part of ‘Beti Bachao Beti Padhao’ campaign.

Sukanya Samriddhi Yojana objectives include financial independence of women that will help them fulfil their long-term life goals and aspirations like pursuing higher education, marriage, etc.
Sukanya Samriddhi Yojana process includes opening an account in the name of a girl child in any private or public sector banks in the list available below.
This scheme also aims to abolish the practice of sex determination and gender discrimination. It also ensures protection of girls and their higher participation in education and other areas.
Sukanya Samriddhi Yojana is easily accessible to people as these accounts can be opened in any post office as well. The initial deposit might range between ₹250 to ₹1.5 lakh annually.

What are the features of Sukanya Samriddhi Yojana?

Let us take a look at the features of Sukanya Samriddhi Yojana:

Deposits
Minimum of ₹250 needs to be deposited every year for a total of 15 years; the maximum one can invest is ₹1.5 lakh every financial year. You can make as many deposits as you want and pay using any mode of payment - cash, cheque, online transfer or demand draft.
After the first 15 years of payment, the funds in the account will increase by accumulating compound interest. However, in case you are unable to make the minimum amount of deposit once in a financial year, your account will be discontinued which you can reactivate by paying ₹50.
Interest rate
Interest rate of the SSY is decided by the government every quarter. For the last quarter of 2022-23, the Sukanya Samriddhi Scheme interest rate is 7.6% per annum which is compounded annually. You can receive the interest payment only after maturity of scheme or if there’s a change in the daughter’s citizenship status or residence.
Tenure
The tenure of this scheme is of 21 years. Therefore, if the account is opened when the daughter is 9 years old, the scheme will mature when she will turn 30 years old.
Number of accounts
Parents are eligible to hold only one account for one girl child. They can only open two accounts simultaneously under this scheme if they have two daughters. In case of triplets, parents are allowed to hold as many as three accounts which is the maximum number of accounts one can hold.
Transfer of account
In case you move to a new city and as a result your address changes, you can transfer your Sukanya Samriddhi Yojana account balance to any of the branches of post office or bank around the country free of cost.
When you transfer the account balance, you will need to provide address proof. If you wish to transfer your account for any other reason, you will need to pay ₹100 for it.

Eligibility criteria for Sukanya Samriddhi Yojana

Government of India has made this scheme accessible to common people. Following are the Sukanya Samriddhi Yojana eligibility criteria for both the child and the parents:

Eligibility criteria for girl child

The girl child should be a resident of India and her maximum age should be 10 years when opening the account.
A grace of 1 year is however applicable provided the account is opened within a year of her turning 10.
More than one account is permissible in case of two girl children or twins or triplets.
Parents need to submit their daughter’s age proof at the time of applying for the scheme.

Eligibility criteria for parents

Only biological parents or legal guardians are eligible to open an SSY account on behalf of the child.
A parent or a guardian can open more than one account in the case mentioned above.

Documents required for Sukanya Samriddhi Yojana

When opening a Sukanya Samriddhi Yojana account, you need to submit a few documents to validate your identity. Here is the list of the documents that you will need to submit:

For the girl child

Birth Certificate
Form SSA-1
Medical certificate to prove birth of multiple girl children in a single birth

For parents

Proof of Identity like Aadhaar Card, PAN Card etc.
Proof of Address such as Aadhaar Card, Driving License, Electricity Bill, Telephone Bill etc.

This is a basic list that the banks or post offices in general ask for. However, the bank or post office can ask for any other relevant documents other than the ones mentioned above.

How to apply for a Sukanya Samriddhi Yojana Account?

You can open a Sukanya Samriddhi Yojana account either in a post office branch or with a participating bank. For this, you can apply both online and offline modes.

You can follow the steps below if you want to open the account offline:

Step 1: Visit the post office or bank branch in which you wish to open the account.

Step 2: Ask for Form-1 which is required for opening the account.

Step 3: Fill up this form and submit all the relevant documents asked for.

Step 4: Make payment for your first deposit either in cash, cheque or demand draft. The amount can be anything between ₹250 to ₹1.5 lakh.

Step 5: After processing your application and payment, your Sukanya Samriddhi Yojana account will be created. You will receive a passbook to keep a tab on the account.

You can follow these steps to open an online SSY account

Step 1: Fill in the form that you downloaded from the official website of RBI, India Post or Public Sector or Private Sector Bank.

Step 2: Mention details like name of girl child, parents or guardian, date of birth of child, initial deposit amount, cheque or demand draft number. Upload the required documents for proof of identity, proof of address and other KYC documents.

Step 3: Make payment for the initial deposit amount.

Step 4: You can opt to give payment instructions at the branch or set up automatic credit from your SSY account via NetBanking.

You can also make the deposit payments online by following the steps below:

Step 1: Get the Indian Post Payments Bank (IPBB) app.

Step 2: Transfer money from your bank account to your IPBB account.

Step 3: Go to ‘DOP Product’ section and choose the SSY account option.

Step 4: Provide your SSY account number and customer ID of DOP.

Step 5: Choose the amount you wish to pay and instalment duration.

Step 6: After this, you will receive the IPPB notification. Your payment routine will be set and will receive a notification each time the app transfers money.

How is the interest rate on SSY calculated?

Interest is usually calculated on the lowest balance between 5th of the month to the last day of every month. The interest that you earn on your account is compounded on a yearly basis. You can use the formula below to calculate the interest:

Interest = P (1 + R/100) ^ N

Here, P stands for Principal Deposited

R stands for Rate Interest

N is for Number of Years

Performing the entire calculation manually can be quite hectic. Therefore, you can opt for a calculator available online to save time.

What are the benefits of Sukanya Samriddhi Yojana?

Sukanya Samriddhi Yojana offers a range of benefits. Some of them are as follows:

Guaranteed returns
As SSY receives the backing of the government, your daughter (policyholder) will receive the entire account balance along with interest accumulated upon maturity.
Educational expenses coverage
To meet the educational expenses of your daughter, you can withdraw 50% of the account balance. You can withdraw the money by showing proof of admission.
Affordable deposit payment
You need to deposit a minimum of ₹250 every fiscal year to continue your account which is very affordable for people across all sections of society. In case you miss out on paying the amount for a year, a nominal penalty of ₹50 is to be paid to activate the account.
High interest rate
Interest rate applicable to SSY accounts has always been high in comparison to other government schemes. Currently, in FY 2022-23, it is 7.6% p.a.
Compounding benefit
Sukanya Samriddhi Yojana is a long term scheme with the advantage of annual compounding. This means that your accumulated savings keep on accruing compound interest even after maturity until the account holder closes the account.
Easy transfer
You can transfer your account from one post office or bank to any other branch anywhere around the country absolutely free of cost if you need to shift your residence.

List of banks that offer Sukanya Samridhhi Yojana

Let us take a look at the list of banks that are authorised by government of India to offer Sukanya Samriddhi accounts:

Public sector banks

State Bank of India
Bank of Baroda
Punjab National Bank
UCO Bank
Bank of India
Canara Bank
Andhra Bank
Corporation Bank
Indian Overseas Bank
Bank of Maharashtra
IDBI Bank
Dena Bank
Punjab & Sind bank
Indian Bank
Oriental Bank of Commerce

Private Sector Banks

ICICI Bank
Axis Bank

Rules for withdrawing from SSY account?

account in case of certain circumstances.

After attaining the age of 18 years, you can withdraw up to 50% of the balance for the purpose of higher education or marriage. Following are the documents you need to present for the different circumstances:

Withdrawal for education
You can opt to withdraw money in case your daughter reaches the age of 18 or completes 10th standard. For this, you need to submit the documents in relation to admission, such as
- Copy of fee slip
- Confirmed offer of admission to any educational institution
Withdrawal for marriage
In case your daughter turns 18 and is getting married, you can prematurely withdraw money. You need to apply for it one month before marriage or three months after. For this, you require to present proof of identity and marriage.
You need to fill up a withdrawal form and mention the reason and provide proof of identity and address. A maximum of one withdrawal is permitted in a year either in a lump sum or 5 instalments on the basis of specific ceiling and actual requirements.

What are the rules for closing SSY account?

In normal circumstances, the SSY account matures after 21 years after which the girl (accountholder) can close the account by submitting an application and other details like proof of identity, address and citizenship document. However, SSY also approves premature closure under the following circumstances:

In case of the unfortunate death of the girl child, the guardian can close the account by providing the death certificate. Balance along with the interest accrued will be handed over to the parent/guardian.
In case the girl becomes a non-resident or non-citizen of India. Such status changes should be informed to the bank or post office within one month.
In case of medical treatment for a life-threatening disease of the daughter or death of parent/guardian.
In case after 5 years of opening the account, the bank or post office is satisfied that the continuation of this account is causing problems for the girl child.

Transfering SSY Account from post office to bank

It is possible to transfer your Sukanya Samriddhi Yojana account from a post office to a bank. Here’s how you can do so:

Step 1: Visit the post office where you hold the SSY account.

Step 2: Inform the SSY executive at the post office about the transfer.

Step 3: They will provide you with a form which you need to fill out and submit along with your SSY passbook, proof of identity and KYC documents.

Step 4: After this, visit the bank where you want your SSY account to get transferred to.

Step 5: After verification and processing of your documents at the bank, your account will be created and you will receive a new passbook.

Tax benefits of Sukanya Samridhhi Yojana

By opening a Sukanya Samriddhi Yojana account, you can fulfil your tax-saving objective along with building a substantial corpus for your daughter’s future over the years. It has an Exempt-Exempt-Exempt (EEE) status. This means:

The amount that you invest in Sukanya Samriddhi Yojana is eligible for tax deduction as per section 80C of Income Tax Act 1961. You will receive a deduction of up to ₹1.5 lakh. Therefore, if you invest ₹1.5 lakh, your entire investment will become tax-deductible.
Even the interest that you earn from this scheme is exempt from tax.
On maturity or in case of withdrawal, you won’t be charged any taxes.

Conclusion

Sukanya Samriddhi Yojana is like a helping hand from the government to promote savings for the daughters of the country. It is a highly popular investment option among parents of girl children as it offers guaranteed returns that are tax-exempt.

Though lock-in period might be a drawback, premature withdrawal balances it to a great extent. This investment scheme will help families earmark funds for their daughter’s future as it is completely risk-free.