Sukanya Samriddhi Account (SSA)​ – Benefits, Eligibility, Interest Rate

What is Sukanya Samriddhi Account (SSA)?

Sukanya Samriddhi Account is a government-backed savings scheme launched by the Government of India as part of the Beti Bachao, Beti Padhao (Save the Girl Child, Educate the Girl Child) campaign. It is designed to encourage parents or legal guardians to save money for the future education and marriage expenses of their girl child.

Benefits of Sukanya Samriddhi Account (SSA)

1. Higher Interest Rate: The SSA provides a higher interest rate compared to many other savings schemes. The interest rate is set by the Ministry of Finance and is typically higher than inflation, helping the account balance grow over time.
2. Tax Benefits: The contributions made to the SSA are eligible for a deduction under Section 80C of the Income Tax Act. This provides tax benefits to the account holder and helps in reducing the overall tax liability.
3. Long-term Savings: The SSA has a tenure of 21 years, providing a long-term savings avenue for the girl child. This helps in building a substantial corpus that can be utilized for various purposes like higher education or marriage expenses.
4. Flexible Deposits: The account allows flexible deposit options. The minimum deposit required to open the account is low (Rs. 250), and subsequent deposits can be made in multiples of Rs. 50. This makes it easier for the guardian to contribute as per their financial capacity.
5. Partial Withdrawals: The SSA permits partial withdrawals once the girl child reaches the age of 18 years or completes the 10th standard. These withdrawals can be utilized for educational purposes or other essential needs, providing financial flexibility.
6. Security and Empowerment: The SSA is specifically designed to promote the welfare and empowerment of the girl child. It ensures that funds are set aside for her future needs, enabling financial security and independence.
7. Government-backed Scheme: The SSA is a government-backed savings scheme, which instills confidence in the reliability and safety of the account. The account is operated through post offices and authorized banks, ensuring a trusted and regulated framework.

Who Can Open Sukanya Samriddhi Account (SSA)?

1. The account can be opened by the guardian (parents or legal guardian) in the name of a girl child below the age of 10 years.
2. Only one Sukanya Samriddhi Account can be opened in India either at a post office or an authorized commercial bank in the name of a girl child.
3. In a family, a maximum of two Sukanya Samriddhi Accounts can be opened, provided that they are for two different girl children. This means if a family has two or more girl children (including twins or triplets), separate accounts can be opened for each of them. However, the total number of accounts cannot exceed two per family.

Deposits in Sukanya Samriddhi Account (SSA)

1.  The account can be opened with a minimum initial deposit of Rs. 250.
2.  In a financial year (FY), a minimum deposit of Rs. 250 is required, and the maximum deposit allowed is up to Rs. 1.50 lakh. Deposits can be made in multiples of Rs. 50. The deposits can be made in a lump sum or multiple installments within the financial year.
3. Deposits can be made up to the completion of 15 years from the date of opening the account.
4.  If the minimum deposit of Rs. 250 is not made in an account within a financial year, the account will be treated as a defaulted account.
5. A defaulted account can be revived before the completion of 15 years from the date of opening by paying the minimum deposit of Rs. 250 plus Rs. 50 as a default fee for each defaulted year.
6. The deposits made in the Sukanya Samriddhi Account qualify for deduction under Section 80C of the Income Tax Act, providing tax benefits to the account holder.

Interest Rate

The Sukanya Samriddhi Account offers a competitive interest rate of 8.0% per annum, effective from 01-04-2023. The interest is calculated on a yearly basis and compounded annually, ensuring growth in your savings over time.

Interest

1. The interest calculation will be based on the lowest balance in the account between the close of the fifth day and the end of the month.
2. The interest earned will be credited to the account at the end of each financial year.
3. In case the account is transferred from one bank to another or from a bank to a post office (or vice versa), the interest will be credited to the account at the end of each financial year, provided the account stands at the end of the financial year.
4. The interest earned on the Sukanya Samriddhi Account is tax-free under the Income Tax Act.

The account will earn interest at the prescribed rate notified by the Ministry of Finance on a quarterly basis.

Management of Account

1. The Sukanya Samriddhi Account will be operated by the guardian (parents or legal guardian) until the girl child attains the age of majority, which is 18 years.
2. The guardian is responsible for managing the account, making deposits, and performing other necessary operations on behalf of the girl child.

​Withdrawal

1. Withdrawals from the account can be taken after the girl child attains the age of 18 years or has passed the 10th standard, whichever comes earlier.
2. The withdrawal amount is limited to 50% of the balance available at the end of the preceding financial year.
3. Withdrawals can be made in one lump sum or in installments, but not exceeding one withdrawal per year.
4. The withdrawals can be made for a maximum of five years, subject to the ceiling specified and the actual requirement of fees or other charges.

Premature Closure of Account

The account may be prematurely closed after 5 years of opening in the following situations:

1. On the Death of the Account Holder: In the event of the account holder’s death, the account can be closed. From the date of death until the date of payment, the applicable interest rate will be the Post Office Savings Account interest rate.
2. On Extreme Compassionate Grounds: In certain extreme compassionate situations, the account may be closed prematurely. The specific circumstances that qualify as extreme compassionate grounds may vary and would need to be assessed by the authorities.

Extreme Compassionate Grounds Like

(i) Life-threatening Disease of the Account Holder: In the case of a life-threatening disease affecting the account holder, the account may be eligible for premature closure. The specific procedure and requirements for such closure would need to be determined by the relevant authorities.

(ii) Death of the Guardian by Whom the Account is Operated: In the unfortunate event of the death of the guardian who operates the account, the account may be eligible for premature closure. The necessary steps and documentation would need to be followed as per the guidelines set by the authorities.

(iii) Complete Documentation and Application: To initiate the premature closure of the account, complete documentation and an application form would be required. The specific documents and forms needed may vary and should be obtained from the concerned Post Office or relevant authority.

(iv) Submission of Prescribed Application Form and Passbook: To proceed with the premature closure of the account, the prescribed application form, along with the passbook, needs to be submitted to the respective Post Office or authorized entity.

​Closure of Account on Maturity

(i) After 21 Years From the Date of Account Opening: The Sukanya Samriddhi Account can be closed after 21 years from the date of opening. Once the account completes 21 years, the account holder or the authorized person can initiate the closure process.

(ii) At the Time of Marriage of the Girl Child After Attaining the Age of 18 Years: The account can also be closed at the time of the girl child’s marriage, provided she has attained the age of 18 years. The closure can take place within a period of 1 month before the date of marriage or up to 3 months after the date of marriage.

In both cases, the closure of the account would require appropriate documentation and application submission to the concerned Post Office or authorized entity.

Documents Required

• SSA Account Opening form.
• Birth Certificate of the girl child with her name on it.
• Two Photographs of the parent or guardian of the girl child.
• KYC Documents of the parent or guardian with Identity & Address Proof.

FAQs

Q. Who is Eligible to Open a Sukanya Samriddhi Account?

A. The account can be opened by the guardian (parents or legal guardian) in the name of a girl child below the age of 10 years.

Q. What is the Minimum Deposit Required to Open a Sukanya Samriddhi Account?

A. The account can be opened with a minimum initial deposit of Rs. 250.

Q. What is the Maximum Annual Deposit Allowed in a Sukanya Samriddhi Account?

A. The maximum deposit allowed in a financial year is up to Rs. 1.50 lakh, and deposits can be made in multiples of Rs. 50.

Q. What is the Tenure of the Sukanya Samriddhi Account?

A. The account has a tenure of 21 years from the date of opening or until the girl child’s marriage, whichever is earlier.

Q. Can Multiple Sukanya Samriddhi Accounts Be Opened for Multiple Girls in a Family?

A. No, only one account can be opened in the name of a girl child, and a maximum of two accounts can be opened in a family, subject to certain conditions.

Q. Is the Interest Earned on the Sukanya Samriddhi Account Taxable?

A. No, the interest earned on the account is tax-free under the Income Tax Act.

Q. What Are the Withdrawal Rules for the Sukanya Samriddhi Account?

A. Withdrawals can be made after the girl child attains the age of 18 years or has passed the 10th standard, limited to 50% of the balance available at the end of the preceding financial year.

Q. Can the Sukanya Samriddhi Account Be Closed Prematurely?

A. Yes, the account can be closed prematurely under specific conditions such as the death of the account holder or on extreme compassionate grounds.

Q. Are There Any Tax Benefits Associated With the Sukanya Samriddhi Account?

A. Yes, contributions made to the account are eligible for a deduction under Section 80C of the Income Tax Act.

Q. Where Can I Open a Sukanya Samriddhi Account?

A. The account can be opened at designated post offices or authorized commercial banks in India.