SUKANYA SAMRIDHI YOJNA (SSY Account) Still A Perfect Gift For Your “GIRL” Child !

The Sukanya Samriddhi Yojana (SSY) is a scheme of the Govt. of India started under the campaign of “Beti Bachao Beti Padhao” by our Prime Minister Mr. Narendra Modi.

The scheme’s intention is to meet the education and marriage expenses of a girl child and promising her a great future. At the time of launch the interest rate was 9.1% which attracted very good investments in the scheme. The current rate of return in the SSY scheme has been revised to 8.5% per annum, in F.Y 2017-2018.

Key Features and Benefits of the Scheme :

Eligibility: The account is opened and operated by either of the parents or the legal guardian of the girl child in her name only till she turns 10. Only one account is allowed for every girl child and maximum two accounts in the name of two different girl children.

Important time period to keep in mind is that one must open the account as early as possible to gain maximum returns and compulsorily before the girl child crosses the age of 10. The account will remain operative for 21 years from the date of its opening or till the marriage of the girl after she turns 18.

Account Opening and Documentation :

The SSY account can be opened primarily in nearest Post Office or in any authorized branches of government and private commercial banks.

Documentation needed are:

1. Account Opening Form

2. Attested Birth Certificate of the girl child

3. Identity and residence proof (as per KYC norms of RBI)

4. Two photographs of father / mother / legal guardian of the girl child.

Operation of SSY Account :

The operation of the scheme is managed by a Pass Book issued while opening the account by the initial amount of only Rs.1000. Deposits can be made thereafter in

multiples of Rs.100.

Rate of Interest :

At present, the SSY Account offers one of the highest tax-free returns backed by the Government of India guarantee.

An attractive rate of interest of 8.5% Per Annum is given on this account, which is tax free and it is calculated yearly, on yearly compounded basis.

Deposit Period and Monthly Calculation of Interest:

One can deposit in this scheme for 14 years from the date of opening the account.

Interest will be calculated on the 10th day of every month. So, it’s better to deposit before 10th of every month to maximize returns.

Deposits can also be made in lump-sum amount and there is no limit on number of deposits either in a month or in a financial year.

Min. and Max. Contributions:

The minimum deposit to keep the account operative is Rs.1000 in a year and maximum amount deposited in a year is Rs.1,50,000.

The deposit in the account can be made in cash or by cheque or demand draft indicating the name of the account holder and the account number.

Partial Withdrawal facility:

Kindly note that partial withdrawal is allowed which is maximum up to 50% of balance standing at the end of the preceding financial year. This withdrawal amount can only be taken after Account holder’s attaining age of 18 years. This is done with the intention of parents saving a considerable amount and hence to ensure a handsome saving for their girl child’s higher education or marriage.

Transfer of Account :

The SSY account can be transferred anywhere in India if the girl child or her parents moves to another city. No transfer fee is charged on furnishing the proof of shifting of residence of either the parent/guardian or account holder.

Income Tax & Wealth Tax exemptions :

The SSY scheme enjoys the exempt-exempt-exempt (EEE) status and interests earned on the SSY account is completely tax-free and deduction up to Rs.1,50,000 is allowed U/S 80C of the Income Tax Act.

Any withdrawals are also exempt from wealth tax.

Some of the Illustrations showing the Yearly deposits and the Maturity Value after 21 Years

in SSY Account :

Illustration 1 :

On a Monthly Saving of Rs.1000 the Annual Deposit will be Rs.12000.

The Accumulated Deposit in 14 Years will be Rs. 1,68,000 which will fetch a Maturity amount

of Rs.5,61,872 in 21 Years.

Illustration 2 :

On a Monthly Saving of Rs.2000 the Annual Deposit will be Rs.24000.

The Accumulated Deposit in 14 Years will be Rs. 3,36,000 which will fetch a Maturity amount

of Rs.11,23,745 in 21 Years.

Illustration 3 :

On a Monthly Saving of Rs.5000 the Annual Deposit will be Rs.60,000.

The Accumulated Deposit in 14 Years will be Rs. 8,40,000 which will fetch a Maturity amount

of Rs.28,09,362 in 21 Years.

Illustration 4 :

On a Monthly Saving of Rs.10,000 the Annual Deposit will be Rs.1,20,000.

The Accumulated Deposit in 14 Years will be Rs. 16,80,000 which will fetch a Maturity amount

of Rs.56,18,723 in 21 Years.

Keep in view some of the assumptions listed below :

# Financial year of opening the account is F.Y 2017-18.

# Deposits are made annually and on the 1st of April each year for all the 14 years; upto the year 2031.

# Rate of Interest is assumed to be the Old rate of 8.3% for all the 21 years and returns are calculated for 21st Year completing in F.Y 2037-38.

# I have assumed a fixed annual deposit amount starting from Rs.12000 per annum upto the maximum allowed deposit of Rs.150000 per annum.

(although one can deposit any variable amount above Rs.1000 per year in the scheme).

# No withdrawals have been made in all these 21 years from the deposited amount.

# girl child investment scheme.