Explainer: Why Sukanya Samriddhi Yojana A Smart Option To Secure Your Daughter’s Future

With International Women's Day around the corner, let us take a look at the government's Sukanya Samriddhi Yojana for girl’s development and the benefits the scheme provides.

Sukanya Samriddhi Yojana is a government-run scheme to help parents meet their girl child’s education and other expenses. Parents can open an account in name of the girl child under this scheme in post offices and authorised banks before she attains the age of 10 years.

Investment and Returns

Parents can invest up to Rs 1.5 lakh in a financial year in the Sukanya Samriddhi Yojana account or a minimum amount of Rs 250. 

You can make deposits for 15 years but the corpus will receive interest for 21 years, the maturity period. For instance, if you deposit Rs 500 per month for the next 15 years, your child would get Rs 2,55,185 at the end of the maturity period of 21 years.

In another scenario, say, you are investing Rs 50,000 per year in the SSY scheme, you will accumulate Rs 21,21,718 for your daughter by 2044, based on the current interest rate of 7.6 per cent. If the interest rates go up in the future, the maturity amount would also increase.

The SSY scheme offers the highest interest rates. For instance, the Public Provident Fund scheme offers 7.1 per cent. Banks offer between 6 and 6.5 per cent for fixed deposits of 10 years. The higher rates offered by SSY makes it an excellent option for securing your girl's future.

Moreover, the contribution made to the scheme, the interest earned on the contribution, and the maturity amount are all tax exempt under Section 80C of the Income Tax Act.

Maturity Tenure

The account matures after 21 years from the date of its opening. Account closure may be permitted before 21 years if the account holder makes such a request due to her intended marriage.

Premature withdrawal up to a maximum of 50 per cent of the total amount in the account is also allowed for education of the account holder. However, to be eligible for such withdrawals, she should be of 18 years of age or pass her tenth standard.

What Happens If You Default On Deposits?

If deposits are not made in a year, the account stands ‘discontinued’. To revive the account, you will have to pay a minimum of Rs 250 per year for each defaulted years and a penalty of Rs 50 for each year of inactivity.

SSY accounts rose from 2,76,79,387 in December 2021 to 3,25,12,095 in December 2022, indicating the growing popularity of this investment option.

The government runs several other schemes such as Annapurna Yojana, Stree Shakti Yojana, and Dena Shakti Scheme which provides loans to women for working capital and business expansion.

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