Understanding Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme designed to provide tax advantages specifically for girls. This initiative aids families in accumulating funds for their daughter's higher education and wedding expenses. Parents can open an SSY account for their daughter from birth until she reaches the age of 10. By making regular investments, especially the maximum annual deposit, substantial returns can be achieved upon the account's maturity.

Interest Rate and Deposit Details

Currently, the scheme offers an annual interest rate of 8.2% compounded yearly. The Ministry of Finance reviews and adjusts these rates quarterly. Interest is calculated based on the lowest balance maintained between the 6th and last day of each calendar month and is credited to the account at the end of the financial year.

Opening an account requires an initial deposit of Rs 250, with a yearly deposit ceiling of Rs 1.5 lakh. Contributions can be made in Rs 50 increments, with unlimited transactions allowed throughout the financial year.

Calculating Maturity Returns

According to HDFC Bank's calculations, investing Rs 1.5 lakh annually at the current 8.2% interest rate yields Rs 71,82,119/- at maturity. This includes a principal investment of Rs 22,50,000/- and earned interest of Rs 49,32,119/-. The account matures 21 years after it is opened.

Eligibility and Tax Benefits

Legal guardians can establish accounts for girls below 10 years, with a typical limit of two accounts per family. Deposits qualify for tax deductions up to Rs 1.5 lakh annually under Section 80C of the Income Tax Act. The scheme also offers complete tax exemption on interest earnings, making it a tax-efficient investment option.

Account Management and Withdrawal

Until the girl child attains 18 years of age, the guardian maintains control of the account. After this, the account control transfers to the girl, enabling her to manage it independently. Withdrawals can be made after turning 18 or completing 10th standard education, with a limit set at 50% of the previous financial year's closing balance.