Post Office Sukanya Samriddhi Yojana
Sukanya Samriddhi Yojana (SSY) is a small savings scheme backed by the government for the financial help of the girl child. Sukanya Yojana comes under the scheme Beti Bachao, Beti Padhao Yojana, and the account can be easily opened by parents of a girl child below the age of 10.
The government of India launched Sukanya Yojana on 22nd January 2015. Simply put, this is a saving strategy for young girls to avail themselves of benefits for their marriage or education. The limit set for investment in this account starts from a minimum ₹250 to ₹1.5 lakh maximum.
The government of India provides a 7.6% interest rate on investment through this scheme. Tax exemption is another benefit one may get for investing in this scheme.
Sukanya Samriddhi Account matures when the girl attains the age of 21 or when she gets married. For higher education, 50% of the total amount in the account can be withdrawn at the age of 18 years.
What Is the Purpose of the Sukanya Samriddhi Yojana?
SSY strives to solve a significant concern related to the girl child – education and marriage. It is directed towards guaranteeing a bright future for the girl child by encouraging the parents or legal guardians of a girl child to assemble money for the appropriate education and untroubled marriage expenditures of their child. SSY has presented the Sukanya Samriddhi Account for all the citizens of India with a girl child.
- To eliminate gender discrimination against kids and void the practice of sex finding of a fetus.
- To assure the survival and financial security of girls.
- To secure higher participation of girls in academics and other areas.
The eligibility for Sukanya Yojana is given below:
- Only legal guardians or parents of a daughter can open a Sukanya Samriddhi account
- The daughter should not surpass the age of 10 during the account opening
- For one daughter, only one SSY account can be opened
- One family can open only two accounts under Sukanya Samriddhi Yojana Scheme
Note: Sukanya Samriddhi Yojana Scheme allows the opening of accounts for more than two girls in some special circumstances given below:
- A third account can be opened only if a girl child is born after twins or triplets of triplets are born before that girl child.
- The third account under an SSY account can not be opened if a girl child is born after twins or triplets.
Investment Advantages of Sukanya Samriddhi Yojana (SSY)
Sukanya Samriddhi Yojana, presented as a feature of the Beti Bachao, Beti Padhao Yojana campaign, delivers investors a spectrum of advantages. Some of the key advantages of the investments are as follows:
- Higher Interest- Sukanya Samriddhi Yojana Interest Rate is higher than other tax saving schemes backed by the government, such as PPF.
- Tax Perks- SSY provides tax deduction benefits under Section 80C up to Rs. 1.5 lakh annually.
- Assured Returns- Since the government backs the SSY scheme, it offers assured returns.
- Elastic Investment- The minimum deposit can be made if of INR 250 and a maximum of INR 1.5 lakh annually. The primary purpose is the encourage people with different financial backgrounds can invest.
- Easy Transfer- The Sukanya Samriddhi Yojana account enables easy transfer of one account from one Post Office to another in case of a parent maintaining the Sukanya Samriddhi Account.
- Compounding Benefits- Sukanya Samriddhi Yojana (SSY) is an excellent scheme for long-term investment as it delivers the benefit of compounding annually. So, even little investments will give tremendous returns over a long period.
Note- If the due amount is not paid by the guardian timely, they have to pay a penalty of ₹ 50.
How to Calculate Returns from Sukanya Samriddhi Yojana (SSY)?
Any investment is beneficial only if it provides good returns over time. The example below will explain the return calculation by investing in Sukanya Samriddhi Yojana.
Let’s consider the following:
The daughter was born in 2022, and the guardian/parents opened the SSY account for her that year. The account will eventually mature after 21 years, and the girl child will obtain the entire maturity amount.
- Annual investments = Rs. 1 lakh
- Investment Term = 10 years
- Total investment at the end of 10 years = Rs. 10 lakh
- Sukanya Samriddhi Yojana Interest Rate for 1 year= 7.6%
- Interest at the end of 21 years= Rs. 3,61,904.76
- Maturity Value at the end of 21 years= Rs. 13,61,904.76
How to Make Investment in the Sukanya Samriddhi Yojana?
You can invest in Sukanya Samriddhi Yojana through your closed post office or designated branches of public and private banks. You will require to submit KYC documents like Aadhaar Card, Passport, etc., along with the designated form and primary deposit by cheque/draft.
Account holders fill out the SSY Application Form, which can be received by going to a nearby PO or public/private sector bank. You can also download the Sukanya Samriddhi Yojana New Account Application Form from the given sources:
- The India Post Website
- The Reserve Bank of India Website
- Respective websites of public sector banks
- Private sector banks' websites
How to Fill Out the Sukanya Samriddhi Yojana Application Form?
Investors can open an SSY account through a Post Office or bank branch. However, No institution allows opening an account under the Sukanya Samriddhi Yojana online. Investors must submit all the necessary documents and the application form to open the account. Then, they can set standing instructions online effortlessly.
This form instructs applicants to deliver crucial data concerning the girl child whose name the account will be opened. Not only this, details of parents/guardians who will be opening the account and making investments are also required.
SSY Account Opening at a Bank
Follow these simple steps to open an SSY account through the bank:
- Step 1: Visit the closest branch of a certified bank.
- Step 2: Fill out the SSY account form with the necessary data.
- Step 3: Deliver the required documents. These documents are:
- ID proof of the parent/legal guardian of the girl child
- Address proof of the parent/legal guardian
- Photo of the parent or legal guardian
- Certificate of birth of the girl child
- Step 4: After submitting the form, the investor must pay the first deposit ranging from INR 250 to INR 1.50 lakhs. This can be done through cash, cheque, or DD.
- Step 5: Now, the bank will process your application and deposit.
As soon as the application is processed successfully, the SSY account will be opened. Additionally, the bank will issue the passbook, and the Sukanya Samriddhi Yojana account will be ready for investments.
SSY Account Opening at a Post Office
Ideally, this scheme is launched for Post Offices. Opening an SSY account in PO is similar to the bank. The following steps should be followed:
- Step 1: Visit your closest PO.
- Step 2: Fill out the PO account opening form. It is a detailed form with the following details:
- Firstly, enter the post office branch name as you begin.
- Enter the respective account number if you already have a savings account with this branch or any other branch.
- Details of postal address and PO branch should be entered under the option ‘To The Postmaster.’
- Tick on the account type under option 'Account Holder Type'.
- Paste the photograph of a girl or girl child with one of the parents if she is under 3 years old.
- Enter the applicant's name under the option 'I/We' and specify 'Sukanya Samriddhi Yojana’ in the given space.
- There is no need to fill the content box for the PO savings account.
- The following section will be about the amount deposited in this account post-opening. Investors need to write this amount in figures and words too.
- Select the payment mode- cash, cheque, or demand draft. Investors choosing DD or cheque need to mention the date and number.
- Enter relevant details under three columns for 3 applicants- name, gender, Aadhar no., address, and PAN in the table.
- On the bottom of the page, the signature of the applicant/applicants is required to authorize the details provided
- On the next page, the investor needs to mention other account numbers under their name adjacent to SSA. There are other instructions also provided on this page.
- Now, at the end of this section, furnish nomination details, and enter the date, address, and signature.
- Applicants need to provide the signatures of 2 witnesses if they are illiterate.
- Affix photocopy of required documents and IDs with this form.
- Make the payment through any mode mentioned above.
The post office will evaluate the application, and once the account gets opened, the branch will issue a passbook.
Given below is the list of the documents required to be furnished along with the application form:
- Aadhar Card
- The girl child's and parent's photo
- The birth certificate of the girl child
- Proof of address
- ID proof of the parent or legal guardian- PAN card, driving license, Aadhar card, ration card
Tax Benefits of Sukanya Samriddhi Yojana Scheme
Sukanya Samriddhi Yojana Scheme comes under the EEE or exempt-exempt-exempt category of investments. Under this tax benefit, the invested principal amount, amount of interest earned, and amount of returns after maturity are all tax-free. Under section 80C of the Income Tax Act, 1961, the tax deduction on the principal invested is a maximum of up to INR 1.5 lakh annually according to the present taxation laws related to Sukanya Samriddhi Yojana.
Is it Possible to Transfer of Sukanya Samriddhi Account?
One of the key advantages of the Sukanya Samriddhi Yojana Account is that it can be transferred easily from one Bank or Post Office in India to another. Under current regulations, one can easily transfer this tax-free investment account for support of a girl child from one part of India to another.
To commence the transfer of the Sukanya Samriddhi Yojana account from any bank or post office, the account holder will have to fill up. The account holder then must submit the transfer proposal application form with the Post Master of the Post Office of India, where their account is. The transfer application form can be downloaded online or from any designated bank branch or Post Office.
Drawbacks of an SSY Account
The Sukanya Samriddhi Account (SSA) offers investors many beneficial attributes which can support the girl child in her future financial requirements by delivering financial help and leading a stress-free life. However, the scheme has particular drawbacks as well. These drawbacks may discourage investors from taking benefit of the scheme as a whole. Sometimes, it may occur that you may not be able to relish the advantages provided by the SSY account if you sabotage the defects of the SSY.
Given below are some of the drawbacks of the Sukanya Samriddhi Yojana
- Sukanya Samriddhi Account comes with a very high lock-in period. Investors must wait 21 years to withdraw the interest on the maturity and amount deposited. So, the SSY account is not perfect for short-term investments. If you have a short-term deposit goal and want to ensure your girl child’s future, you should select another plan.
- The account comes with an uncertainty of interest rates. It means if an SSY account offers high-interest rates at one point, it does not mean it can not be changed in the future. The interest rate is variable and may vary at any moment. The government of India would reconsider these rates every year and may modify them as a requirement. Investors have to face loss, and it will be troublesome if the ongoing interest rate, which is 9.2%. If that happens, a scheme with many benefits won't be able to attract many customers.
- Another drawback of this account is the limitation on the number of accounts. The number of accounts that can be opened under SSY is limited to only two per family. So, if the investor has three girl children, the scheme won't allow the investor to open an account for the 3rd child.
- Online facility to operate the account without visiting the bank/Post Offices is not allowed with an SSY account. It is a major negative point of this scheme. If it becomes online, it may be able to attract more people.
- The SSY permits premature withdrawal when the girl attains 18 years of age, which is also not sound if we view it as a short-term investment.
Sukanya Samriddhi Yojana, or SSY, is a tax-exempted savings scheme supported by the government. It is also a crucial part of the Beti Bachao, Beti Padhao Yojana campaign for the financial security of a girl child. The scheme urges parents/guardians to open up such accounts a maximum of up to two accounts for two girl children.
The overall tenure of maturity of the account is 21 years or after 18 years whenever she gets married. Account opening forms, a photograph of parents, KYC documents, birth certificates, etc., are presented to get the advantage of Sukanya Samriddhi Yojana.
Frequent Asked Question (FAQs)
Q. Can applicants open a Sukanya Samriddhi account online?
No, there is no facility to open an SSY online now. Therefore, applicants must fill out the application form to open an SSY account and submit it to a nearby post office or authorized bank branch.
Q. What documents are required to open an account under Sukanya Samriddhi Yojana Scheme?
To open an account under Sukanya Samriddhi Yojana Scheme, the applicant needs to submit the following documents- duly filled application form, a photograph of the parent or legal guardian of the girl child, the birth certificate of the girl child, address proof, and Identity Proof of the girl child and her parent or legal guardian.
Q. What is a deposit's interest rate and tenure in the Sukanya Samriddhi Yojana account?
The Sukanya Samriddhi Yojana interest rate is 7.60 % per annum, and the tenure of the SSY account is a maximum of up to 21 years. The account holder can deposit a minimum investment of up to INR 250 p.a and a maximum of up to INR 1.5 lakhs per annum.
Q. What are the tax benefits that come with an SSY account?
Investments made under Sukanya Samriddhi Yojana are entitled to a maximum deduction of up to INR 1,50,000 under Section 80C of the Income Tax Act, 1961. Besides, the amount received on maturity and interest accrued on this scheme is exempt from income tax.