Sukanya Samriddhi Yojana: Has The Interest Rate On SSY Changed? Know Details

Minimum and Maximum Deposit Limits

It's easy to open an SSY account, and there's a minimum opening amount of just Rs 250, so it's within the reach of most families. To maintain the account operational, one should deposit at least Rs 250 in every financial year. No more than Rs 1.5 lakh may be deposited per year. Such a bracket supports families with diverse financial resources so that all such families could benefit from the scheme. Deposits can be made at any point of time during the year and can be paid in a lump sum or in installments, as long as each installment is in multiples of Rs 50. This design provides flexibility, allowing parents to contribute as per their inflow of income and saving pattern.

Tax Benefits and Interest Earned

The interest on the SSY account is compounded annually and is exempt from income tax. The return at maturity is also tax-exempt. According to Section 80C of the Income Tax Act, SSY account contributions are tax deductible. This three-exemption facility on the principal, interest gained, and amount at maturity renders SSY an especially popular choice among those in search of secure, tax-efficient savings schemes. In the long run, this tax benefit has the potential to substantially increase the value of the investment.

Partial Withdrawal Facility for Education

Partial withdrawals for educational expenses are permitted once the girl child reaches the age of 18 or finishes Class 10, whichever is first. The withdrawals will cover expenses related to higher education, such as admission charges, fees for courses, and other related expenses. The withdrawal amount can be a maximum of 50 percent of the balance of the account at the end of the last financial year. The sum can be withdrawn in a lump sum or in instalments of one year, with only one instalment allowed per annum for a maximum of five years. The withdrawn amount should be in proportion to the real requirements of the educational institution, and documentary evidence of expenditure is to be furnished to go ahead with the withdrawal.

Conditions for Premature Closure

Though SSY is designed for long-term savings, the account may be closed before time under exceptional and valid circumstances. The premature closure is permissible after completion of five years from the date of opening of the account on grounds of valid reasons. If the girl child dies, the account is closed on the spot and the balance amount is given to the guardian with interest at the rate of the Post Office Savings Account up to the closure date. In other grave circumstances like a life-threatening disease of the girl child or death of the guardian operating the account, premature closure can be considered on compassionate grounds, subject to submission of relevant documents and reasons.

Account Closure on Maturity

The SSY account becomes due 21 years from the date of opening. At maturity, the whole balance, including interest accrued, is credited to the account holder. This period of maturity is predetermined and guarantees that money is available when the girl child decides to go for higher studies. The account may also be closed prior to 21 years if the girl gets married after 18 years. In this situation, a written application with evidence of age and marriage needs to be furnished to finalise the process. The maturity and premature closure benefits are put in place to see that the funds are used as intended in favour of the future of the child.

Sukanya Samriddhi Yojana continues to be an effective tool for parents saving up for their daughters' educational expenditures. With its consistent rate of interest, concessional tax status, and sovereign guarantee, the scheme offers a secure and orderly means to generate long-term savings.