Sukanya Samriddhi Scheme or Sukanya Samriddhi Yojana (SSY) was notified in December 2014. The scheme is part of the Beti Bachao, Beti Padhao Scheme The scheme offers attractive guaranteed interest rates. The Government sweetened the deal by making Sukanya Samriddhi Account part of Exempt-Exempt-Exempt (EEE) tax regime.
The motive of the scheme is to encourage the savings in the name of the girl child.
Since its inception, there has been quite a bit of confusion about maturity rules for Sukanya Samriddhi accounts. Many aspects were left to interpretation. In March 2016, the Government notified amendments to rules for Sukanya Samriddhi Yojana accounts.
With those rules, many aspects of the scheme are quite clear.
Though I have discussed Sukanya Samriddhi Scheme and aforementioned amendments in some of earlier posts, I think it is better to consolidate the latest information about the scheme in a single post.
Here we go.
Can I open SSY account for my daughter? Sukanya Samriddhi Account Eligibility Rules
The account can be opened only in name of a girl child less than 10 years of age. The account can also be opened in the name of the adopted girl child.
The account can only be opened in the name of a girl child (beneficiary or account holder), who is a resident Indian citizen. The Scheme is not available to Non-resident Indians (NRIs). Do note parents can be non-residents. The account cannot be opened in the name of an NRI girl child.
The scheme is NOT available to Foreign Citizens or Overseas Citizens of India either.
The account must be closed if the beneficiary (girl child) becomes a non-resident. As I understand, the definition of non-resident should be as per FEMA (and not Income Tax Act) should apply. As per FEMA, you become a non-resident the day you go abroad for studies. So, you must keep these aspects in mind.
The change in residential status shall be intimated to post office/bank within 1 month of such change.
Even if you don’t intimate the status to post office/bank, the account will be deemed closed from the date of change in residential status. No interest shall accrue to such an account. If any interest has been credited to the account post such change, it will be clawed back.
NRI have been not been welcome to small savings schemes. In October 2017, similar treatment was extended to even PPF and NSC.
Who can open the Sukanya Samriddhi Account?
A natural (parents) or legal guardian can open the account for the girl child.
Where can I open Sukanya Samriddhi Account for my daughter?
The account can be opened in post offices or authorized banks. You can view the account opening form from Bank of Baroda.
What are the documents required to open Sukanya Samriddhi Account?
Along with a filled up application form, you require the birth certificate of the girl child. Additionally, your (depositor’s) identity proof and residence proof will be required. Banks may ask for additional documents such as PAN or Aadhaar card based on their internal requirements.
How many Sukanya Samriddhi Accounts can I open?
Only one account can be opened in name of a girl child.
Parents/legal guardian can open such account only for a maximum of two girl children. Parents/legal guardian can open a third account only in the event of birth of twin girls as second birth or if the first birth results in triplets (three girl children).
If it is found that you have opened more than 1 SSY accounts in the name of the same girl child, it is fair to assume only one SSY account will earn interest. As I understand, for the remaining accounts, money will be returned without any interest. I do not see any provision for the merger of accounts under the scheme.
So, if you have opened more than one account for the same child, do close the extra accounts. Frankly, I have no idea how to close the second account (or if it can even be opened accidentally).
Sukanya Samriddhi Account: Maximum and Minimum Deposit
The account can be opened with an initial deposit of Rs 1,000. Subsequent deposits can be made in multiples of Rs 100.
You can deposit a minimum of Rs 1,000 and a maximum of Rs 1.5 lacs per financial year in a SSY account.
So, if you have two daughters, you can deposit Rs 1.5 lacs each (Rs 3 lacs in total) in their accounts. Under PPF, you can’t do that.
If you have accidentally or deliberately deposited more than Rs 1.5 lacs per financial year in a SSY account, the excess amount won’t earn any interest. The excess amount can be withdrawn anytime by the depositor.
SSY account becomes irregular if you do not make minimum subscription (Rs 1,000) in a financial year. In such case, to regularize account, you must pay Rs 50 per financial year and minimum subscription (Rs 1,000) for the years in default.
Here comes the blow. If you don’t regularize the account within 15 years of opening account, you shall be eligible for only Post Office Savings Account rate (4% p.a.) at the time of maturity. Interest credited (at a higher rate) will be reverted to Government Account. It is a good move. This is to ensure that you make regular deposits in the account. This rule shall not apply if the default occurred because of the death of guardian of the account holder.
How long can I make contributions to Suknaya Samriddhi Yojana Account?
You can contribute to the account until the completion of 15 years (earlier 14 years) from the date of opening the account.
So, if you opened the account on December 31, 2015, you can make deposits in the account till December 30, 2029.
The Sukanya Samriddhi Account matures in 21 years (discussed later).
So, from the beginning of the 16th year until the end of the 21st year from the date of opening the account, there shall be no further contributions. However, the balance in the account continues to earn interest until the end of the 21st year. This means you cannot deposit money from 16th until 21st year but the balance continues to earn interest during the period.
Sukanya Samriddhi Scheme Interest Rate
The rate of interest is notified by Ministry of Finance, Government of India every quarter. For the current quarter (Jan-March, 2018), the notified interest rate is 8.1% p.a. Your balance earns interest at the specified rate for the quarter.
For the latest update on interest rates for various small savings schemes such as PPF, SSY and SCSS, please refer to this post.
Latest PPF, Sukanya Samriddhi, SCSS and Small Savings Scheme Interest Rate
If you invest Rs 1.5 lac every year (for 15 years) at the start of the financial year in a Sukanya Samriddhi Account for your daughter, the corpus will grow to Rs 72.85 lacs at the end of 21 years. The assumption is that the interest rate stays at 8.3% during the entire term.
Sukanya Samriddhi Scheme: Credit of Interest
The interest shall be calculated on the lowest balance between 10th and the last day of the month. So essentially, you should deposit on or before 10th of every month to maximize returns. Won’t impact returns too much though.
Sukanya Samriddhi Scheme: Mode of Contribution
You can make contributions in cash, by cheque or demand draft or through online transfer.
Unfortunately, IDBI Bank, where I have opened Sukanya Account for my daughter does not allow online transfers.
Sukanya Samriddhi Account: Transfer Rules
You can transfer Sukanya Samriddhi accounts across post offices, across banks and even from a post office to a bank (or vice-versa) free of cost. You will have to furnish proof of shifting of residence (for guardian or account holder). I don’t know what constitutes proof of shifting.
As I understand, if you can’t do that, you can still get SSY account transferred by paying a fee of Rs 100.
If both the concerned banks or post-offices have access to Core Banking Solution (CBS), the amounts in the account can be transferred online.
Sukanya Samriddhi Scheme Account Maturity Rules
The account matures after completion of 21 years from the date of opening the account.
Do note the closure of account has no relation to the age of the girl child.
The balance in the account will not earn any interest once the maturity period of 21 years is complete. Hence, your daughter must withdraw money from the account once the account completes 21 years.
Sukanya Samriddhi Scheme Account: Premature Closure Rules
Premature Closure (before completion of 21 years) is allowed if the beneficiary (girl) intends to get married. Such application for premature closure cannot be made unless the beneficiary turns 18. You need to furnish age proof. Quite bizarre because you specified the date of birth at the time of opening the account.
Such application for premature closure shall be made at least a month before the date of marriage or within 3 months from the date of marriage. By the way, there is no mention of what is an acceptable proof of intention to get married.
This is a realistic move. If you are saving in SSY account for your daughter’s marriage, you should be able to take money out for marriage.
Under the old rules, the account had to be closed on completion of 21 years or the date of beneficiary’s marriage, whichever was earlier. No longer true. Please understand it is NOT mandatory to close the account if the account holder (girl) get married. It is an option.
Additionally, please note the account needs to be mandatorily closed in the following cases:
- Death of the account holder (girl)
- In case the account holder becomes non-resident (NRI) or non-citizen (takes citizenship of another country).
In addition, the concerned bank/post office can allow premature closure of account after 5 years on compassionate grounds (life-threatening illness to the account holder, death of guardian causing hardship in continuing the account). No premature closure is permitted under this provision before completion of 5 years. If the account is prematurely allowed to be closed for any other reason (don’t know how to do that), you shall earn the interest rate prescribed for post office savings bank account.
Sukanya Samriddhi Yojana Account: Withdrawal Rules
You don’t have to close Sukanya Samriddhi Yojana Account to access funds in the account. The rules allow for withdrawal if you (your daughter) needs to funds for daughter’s higher education
You can withdraw up to 50% of the account balance at the end of previous financial year for the purpose of higher education of the beneficiary (girl).
So, if you (your daughter) wants to withdraw money for her higher education on July 15, 2022, you/she can withdraw 50% of the account balance as on March 31, 2022.
This is allowed only when the girl child turns 18 or has passed 10th standard, whichever is earlier. Under the old rules, this was allowed only once the girl child turned 18. Higher education is not defined. I assume it means education beyond 10th standard.
Such application for withdrawal shall be made along with documentary proof of admission and fee slip from the institution stating the financial requirement. The amount of withdrawal is capped at actual demand of fee and other charges required at the time of admission (in addition to 50% of the balance amount). This should be as per offer of admission or fee-slip issued by the education institution.
The withdrawal can be made in lump sum or in installments. In case you choose to withdraw in installments, you can withdraw in up to five installments, not exceeding one installment per year. The installments need not be equal.
Sukanya Samriddhi Scheme Tax Benefits
The scheme falls in the category of EEE (Exempt-Exempt-Exempt) products, i.e. your investment in the scheme qualifies for tax deduction, interest earned during the accumulation phase is tax-free and the maturity amount is also exempt from tax.
The investment into the scheme qualifies for deduction under Section 80C of the Income Tax Act. Hence, you can get tax deduction up to Rs 1.5 lacs per financial year for deposits in the account.
Even if you have deposited Rs 1.5 lacs each in SSY accounts of your two daughters, the tax benefit will be limited to Rs 1.5 lacs (and not Rs 3 lacs).
If your spouse is also working, you can deposit money in the account of the first daughter and your wife can deposit in the account of the second daughter. This way, both of you will be able to tax benefits.
PersonalFinancePlan Take
Should you invest in Sukanya Samriddhi Yojana?
The scheme offers attractive (and guaranteed) tax-free interest, which is higher than the interest rate offered on PPF accounts.
However, there are restrictions on deposits. You can make deposits for only 15 years and the account matures in 21 years. You can’t continue beyond that even if you want to. There are stringent limitations on withdrawal from the corpus.
Personally, I prefer PPF over SSY since it does not have many restrictions of SSY account (because PPF serves a different purpose). Disclosure: I have opened both PPF and SSY account for my daughter.
Read: Why you should open PPF account for your children?
Another point to note. Your daughter’s education and marriage are long-term goals. Equity investments are well suited for such long-term goals. If you are comfortable with volatility in equity investments, you can consider taking some exposure to equity mutual funds too for such goals.
By the way, if you foresee that you may choose to work abroad or may become NRI (as per FEMA) in the near future, don’t even consider Sukanya Samriddhi Account for your daughter. For that matter, avoid investment in any small savings scheme (SSY, PPF, NSC etc). NRIs are clearly not welcome in small savings schemes.
Reference
Sukanya Samriddhi Account Rules, 2016
Sukanya Samriddhi Account Rules, 2014
The post was first published on November 15, 2017.
51 thoughts on “Sukanya Samriddhi Yojana Account Rules: Complete Information”
Sir
Please advise what if my daughter goes abroad for higher studies after the completion of 15 years of opening of SSY account. I think as per FEMA and SSY rules, no interest will be accrued from 15 to 21 years and my money will be blocked.
Regards
Hi Deepak,
You will be able to take the money out.
Interest will accrue so long as you are resident.
Expect a few hassles while taking out the money.
Your blog is very informative. Your articles are very elaborate and you always gives step by step procedure. One of my friends, lost their SSY passbooks. As per the Gazette notification, duplicate passbook may be issued on manuscript application on payment of Rs. 50. But post office people are asking non traceable certificate from police even when we show the Gazette. As per their rules for any lost passbook of post office scheme police report is required. What is the actual rule position. Can you please clarify..
Thanks Vijay.
The gazette clearly mentions that you can get duplicate passbook by paying Rs 50. There is no mention of police report or FIR.
This looks like typical red tape at post offices and bank.
If you had this account with a bank, you could have simply marked an e-mail to the CEO and your problem would have been resolved in no time.
Post offices…I am not too verse with the hierarchy.
If you can figure out a way, then mark an e-mail to the concerned top official.
Alternatively, you can register a complaint here.
https://www.indiapost.gov.in/VAS/Pages/Content/RegisterComplaint.aspx
I think post office schemes like PPF and SSY are the best investments today. Mutual funds are too volatile and these avenues provide EEE returns of around 8% which is not bad. I want to say i really loved all your articles.
Appreciate your kind words, Shiv.
Unless the investment horizon is long term, investors should stay away from equity funds.
I do invest full permissible amount in my PPF, daughter SSY and wife PPF. Please suggest now i have some more surplus say 10LAC, should i invest in NSC, will get 7.8%? or any assured avenue better than this??
It seems you don’t like equity funds.
However, if you are investing for the long term, it may not be a bad idea to add equity gradually to your portfolio.
if you want to invest for long period of time and get more interest it is a good scheme for you. and from the about article you get full information about it.
Respected Sir,what is your take on ppf and ssy post introduction of ltcg in equity.thanks
I like SSY and PPF.
LTCG on equity funds does not change their attractiveness.
Thanks, Deepesh for explaining. Very informative. You seem to suggest depositing full 1.5 lacs at the starting of the year (I guess you mean in the month of April, the start of new fin year?) I generally deposit each month around 10-15K. Just trying to understand if the monthly deposit will affect the final corpus instead of depositing 1.5 lacs in one go. Pl suggest?
btw even UCO bank doesn’t allow online transfer which is a problem as I have to visit the bank to deposit the amount. I am planning to take this issue to higher authority as branch manager is not helping much.
Thanks again, always loved your articles.
Pradeep
You are welcome, Pradeep.
Yes, that’s how calculations work. Depositing in April will maximise returns.
However, we also need to look at our cash flows. Not everybody can muster up that much money at one go.
Works the same way in PPF too.
If you can, deposit lump sum at the beginning of the year. If not, relax and keep doing what you are.
My bank does not allow either. So, it is a bit of pain.
Yes, you can escalate to higher authorities. May go higher up the priority list.
Thanks, Deepesh. for clarifying,
Thanks for the detailed info. I am trying to solve a confusion related to maximum amount that can be deposited in this scheme in a financial year.
– Interpreting the statement “The total money deposited in an Account shall not exceed one lakh fifty thousand rupees in a financial year: ” can be per account (each girl child)
– There is also another interpretation that it is the limit for the scheme (all accounts of the parent / guardian(?)) Some sites interpret this way Could you please throw some light if you have some information?
The maximum limit is per girl child.
Very well detailed on SSY. Thanks!
What do you mean Higher Education here. Is that for Master degree or simply can withdraw for education purpose?
As I understand, higher education is not crisply defined.
I assume it means beyond 10th standard.
After the maturity (21 years) what are documents I need to submit to withdraw money. Pls advice
You will have to submit KYC (or identity) docs and bank account details. That should be enough.
Sir
After completion of 21 years who is authorized to withdraw money? Is only girl is authorized person to withdraw money or parents can withdraw it for purpose of marriage?
The account holder (girl)
Hi Sir, I work in Public sector,
So where should i invest money for better Profits and tax benefits??
Hi Girish,
Please consult a SEBI registered financial advisor.
After completion of this maturity time, who will be with draw money, girl or guardian?? If she is not with us on that time, means if she will get love marriage etc we won’t accept that proposal, o n that situation who can with draw ???
The money belongs to the daughter. She can use it as she wishes.
I have opened the account in 2015 when I was residing in India. I traveled to Germany along with family since 2017. When I enquire to close the account in post office as I become NRI they have no idea about the rules and they said they can’t close this account. When there is a rule why can’t they inform the people working. Now I parked my money without interest and can’t take it out as well. Do you have any idea to escalate and close this account?
Dear Raja,
You can show them the circular and get the account closed. Visit the head post office in the city.
I want to Open SSY for my daughter and PPF account for my wife. I have account in ICICI Bank and and my Wife holding account in IDBI bank so It is safe to open SSY in ICICI bank and PPF account in IDBI Bank.
Yes, you can open these accounts in ICICI and IDBI bank. Nothing wrong and no issues.
Thanks…One more question
Some banks are allowed to online payment for SSY. So my question is suppose we holding SSY account in SBI and want to transfer payment from ICICI bank to SSY account in SBI bank. Is it possible?
Hi Vishal,
Within bank works. I am not very sure about inter-bank transfers.
Please check with the bank where you hold SSY account.
Hello sir, Sir I have accidentally transfered money to my daughter’s sukanya account.And that was the only amount I had inhand for expenditure.And according to sukanya rule money cannot be withdrawn before she turns 18..please help and suggest something.
Dear Mrs. Akhter,
This is going to be difficult.
If the money is extremely important, then you can consider closing the account (closure is not an important process either).
If you have a credit card, you can use it for short term needs.
Hi sir,
What will happen if the ssy child becomes an NRI and returns back in few years. Will we able to resume the account with interest? Please guide.
Hi Shruthi,
The account has to be closed when the child becomes NRI.
So, this scenario will never arise.
Hope this answers your query.
Yes sir. Thank you. Will we be able to withdraw the money in ssy once it is closed. Please advice when we will be able to access that money.
Hi Shruthi,
Yes, you will be allowed to withdraw. However, the problem is that the bank officials will not have any process to deal with the withdrawal. So, please appreciate the mess.
Hi Deepesh,
I found your article quite informative. I have a query, I started SSY for my daughter in June 2017 (she was 2yrs old then). We are planning to move abroad in Sept 2020. So, do I have to close the SSY account, if yes then how can I withdraw the money with interest?
Thanks in advance!
Hi Dipika,
Thanks!!!
Close the account. Must say it is going to be some work. You must get the interest. Show them the regulations.
where can I get regulations official link or Document
Here you go http://egazette.nic.in/WriteReadData/2016/168710.pdf
I have a Query I Started ssy for daughter in DEC 2019 she was 3 year old. am i able to recieve 8.3% intrest if i pay 1.5lacs per annum?
And how my financial year will be counted because i started the ssy month of DEC 20.
Hi Smita,
SSY interest rate keeps changing. you won’t earn 8.3% every year. The current rate is 7.6% p.a.
You opened in FY2021 and that how it will be.
Hi Deepesh,
My wife, who is a non-working individual, opened a SSY account for my daughter.
I was stuck abroad due to pandemic.
Since I will be contributing money into this SSY account every year, can I claim 80C deduction in my Income Tax filing?
Please advise.
Hi Shikher,
Yes, you can.
i opened SSY account in the name of my only daughter on 14.10.2015 Her date of birth is 05..12.. 2003. thus her age on the date of opening is 11 years 11 months.I deposited money from 2015 to 2020. the deposited amount and the yearly interest is shown in the pass book. The date of birth is also printed on the pass book.. the bank official says that as the date of birth and the deposited amount and the interest are shown in the pass book so the account is eligible.Now i want to know that weather the account is proper and whether it will be prudent to deposit money further.If the account is not proper how can stop the account and withdraw the amount which is printed on passbook.
Hi Swati,
The account is perfect.
In the first year, there was relaxation in this clause.
A SSY account can be opened by a parent or a legal guardian in name of a girl whose age is not more than 10 years. For this year, a grace period of one year has been given i.e. any girl child born between December 2, 2003 and December 1, 2004 can open an account up to December 1, 2015.
Since your daugther’s DOB is December 5, 2003 and you opened the account before December 1, 2015, there is no issue with the account.
You can continue to invest
hi Deepeh hearty thanks for the information for which i am so much relieved that i find no language to express my happiness.
You are welcome, Swati. Glad I could help.
Dear sir,
Nice article. Have a question. I have opened SSY for my 2 daughters on feb 2016. while opening the account both of my daughters (at the age of 3.5 and 2) were NRI. The amendment came on march 2016 ..stating NRI not permitted to open SSY account. Then both of my daughters joined the school in 2017 in india. Till date they are in india but i am continuing as NRI. Now in my case do i need to continue the account or to stop it. Give me a clear idea on this sir.