| Name of the Product |
Sukanya Samriddhi Yojana (SSY) |
| Nature of the product |
Fixed maturity deposit account |
| Asset Class |
Debt |
| Risk on Capital |
No risk on Capital |
| Objective of the Product and Key Features |
1. Sukanya Samriddhi Yojana (SSY) has been launched by the Government of India as part of its ‘Beti Bachao, Beti Padhao’ campaign. 2. The scheme was launched to secure the future of Girl Children. 3. The account is held in the name of the Girl Child (Beneficiary) |
| Key Risk Factors |
1. Lack of liquidity is a key risk factor. 2. The funds cannot be utilised by the Parent or Guardian, but will be operated by the beneficiary after she attains 18 years of age. |
| Liquidity and Tradability |
The account is neither tradable nor transferable. The account is a locked-in with one exception: Anytime after the age of 18 years or on completion of 10th standard whichever is earlier, the beneficiary can withdraw 50% of the balance available as at the previous financial year end, for the purposes of payment of educational fees. |
| Estimated Long Term Return % and periodicity of Return |
Interest Rate : 8% per annum (Q3 FY 2023-24) Interest rates are reviewed quarterly and announced by the government. |
| Residential Tax Status of Investor who can invest |
• The account can be opened only for Girl children who are Indian Citizens and reside in India. • At any time after the account is opened, if the beneficiary becomes a non-resident, the account will be deemed closed. |
| Whether US Citizen in India / US Tax resident investor can invest |
No. The beneficiary girl child must be an Indian citizen residing in India. |
| Eligibility Criteria to Invest |
• Only parents or legal guardians of the daughter can open a SSY account in the name of their daughter. • Any parent can open the account for the daughter. • The daughter should be less than or equal to 10 years at the time of account opening. • Only two SSY accounts are allowed per family i.e. one for each daughter, max of 2 daughters • In the case of twin daughters, the guardian or parents can open a third account as well. • However if the first birth has twin daughters and the second birth also has a daughter, then a third SSY account is not possible. • It is illegal to hold more than 1 account for each daughter. • The account will have to be operated by Parent / Guardian till the daughter turns 18 years of age • After 18 years of age, the daughter (beneficiary) can operate the account on her own. |
| Investment Limits (if any) |
• Initial deposit – a minimum of Rs 250. • Min – Rs 250 per annum. • Max – Rs 1.50 Lakhs per annum. • Investments allowed in multiples of Rs 50. • Deposits can be made for a period of 15 years from date of account opening (or) until the time of closure, whichever is earlier. • If the minimum amount is not deposited, the account will be treated as default. The default account can be regularised within 15 years of account opening by paying Rs 50 penalty for each default year. • A default account earns interest till the time of maturity on the available balance. |
| Lock In Period (if any) |
• The lock-in period for an SSY account is 21 years (or) till the time of closure whichever is earlier. • However, as an exception, the beneficiary can withdraw upto 50% of the accumulated corpus any time after attaining 18 years of age (or) on passing 10th Standard, whichever is earlier for purposes of education of the beneficiary. The amount to be withdrawn should be supported by fee requests from the educational institution. The withdrawal can be made in lump sum or one per year for a maximum period of 5 years. |
| Maturity Period (if any) |
Maturity: The Sukanya Samriddhi account matures after 21 years from the date of opening of the account. Premature Closure: • Marriage of the Beneficiary after attaining age of 18 years (closure allowed only 1 month before or 3 months after date of marriage, else will have to wait till maturity) • Death of Beneficiary • Beneficiary converts to a NRI or Non-Citizen. This has to be informed within 1 month of change of status of Residentship or Citizenship • Medical emergency for guardian or beneficiary Withdrawal/ Closure – Form to be submitted along with necessary proofs of age, residentship, citizenship for Withdrawal / Closure. |
| Nature of Income |
Interest Income. The interest shall be calculated for the calendar month on the lowest balance in the account between the close of the fifth day of the month and the end of the month. The interest shall be credited to the account at the end of each financial year, resulting in annual compounding. No Interest shall be given from the date of change of Citizenship or Residentship. Any accrued interest from actual date of change till the date of information will be reverted to the government account. |
| Taxability of the Income in India & any Tax Benefits |
The interest credited in this account is exempt from tax. Deposits into SSY provide tax deduction benefits under Section 80C of up to Rs. 1.5 lakh annually. |
| Taxability of Income in U.S (if investable) |
Not Applicable |
| Withdrawal Limits (if any) |
• The entire amount can be withdrawn on maturity (or) on conditions of premature closure. • Upto 50 % of the corpus available at the end of the preceding financial year in which withdrawal application is made, provided the beneficiary has completed 18 years of age or completed 10th Standard , whichever is earlier, for the purpose of paying education fees. |
| Any other specific Uniqueness about the product |
No Loan facility available on this account. |
| Any Links to read about the product / Regulations applicable |
2019 Notification: https://www.gconnect.in/news/sukanya-samriddhi-account-scheme-2019.html 2016 Notification (Old – applicable where rules not specified in 2019 notification): https://dea.gov.in/sites/default/files/Sukanya%20Samriddhi%20Account%20Rules%2C%202016.pdf |
| How can clients invest in it? |
Sukanya Samriddhi Yojana account can be opened at any of the nearest post offices (or) at any branch of the authorised banks. |
| What is the process of investing? |
Documents required for account opening: • Application form • Birth certificate of the beneficiary • ID and Address proof of the Parent or Guardian • Photograph of Girl child and Parent |
| Document Created by and date |
Varun Shenoy on 13 February 2022 |
| Reviewed date |
25 October 2023 |
