Introduced in 2016, the Sukanya Samriddhi Yojana (SSA) account is a central government program aimed at meeting the needs of a girl under the age of 10. The federal government of the country provides a sovereign guarantee on the savings scheme, which the beneficiary receives after the completion of the account maturity in 15 years.
Key Features of Sukanya Samriddhi Yojana
The SSA account offers higher returns than even the most popular government plans, as well as better returns than any fixed deposit or regular savings account provided by banks. If we consider the interest earned on an ordinary savings account in India for the financial year 2021-22, it is between 3.00% and 3.20% for a public sector bank. Similarly, same-year term deposits offer an interest rate of up to 5.50% (for five years of investment), while the SSA scheme offers investors a return of 7.60% per annum. .
Here is a guide to walk you through the Sukanya Samriddhi Yojana (SSA) account before planning an investment.
An account can be opened in any post office and bank by the guardian of a girl under 10 years old. In a family with two daughters or twins/triplets, a maximum of two accounts is allowed upon presentation of birth certificates from the relevant medical authority. Non-resident Indians (NRIs) are not permitted to open an SSA account.
Investing in an SSA account starts with a minimum initial deposit of INR 250 and recurring payments in multiples of INR 50. A maximum investment per financial year must not exceed INR 1,50,000. The deposit matures after the completion of 15 years from the date of opening an account. So, for a 5-year-old child, deposits must continue until the child is 20 years old.
The SSA offers an interest rate of 7.60% per annum, which is set by the Ministry of Finance on a quarterly basis during a fiscal year. The amount of interest is credited to the depositor’s account at the end of the financial year. The current rate has remained unchanged for more than two years. In fiscal year 2019-20, the SSA account provided an ROI of 8.60%.
An amount up to 50% of the deposit can be withdrawn provided that the account holder reaches the age of 18 or has passed the 10th standard.
Premature account closure
In the event of an emergency and in the event of the death of the beneficiary or holder (guardian), the post office or the bank authorizes the early closing of the deposit plus interest on presentation of proof. The account holder can also request closure for marriage after 18 years.
Closing at maturity
The SSA account matures after 15 years. An account that has not maintained a minimum balance of INR 250 during a financial year is considered a defaulted account.
Under Section 80C of the Income Tax Act 1961, a depositor can claim tax deduction on interest earned below INR 1.50 lakh per financial year.
The account can be transferred between post offices and banks, or from bank to bank.
Steps to open an SSA account
Visit Your Account Opening Point
An SSA account can be opened by visiting any post office and authorized banks. Most public and private sector banks offer SSA account depositors to deposit the recurring investment electronically. Deposits to the SSA account at the post office must be made by physically going to the branch.
Carry the required documents
As the program is for a girl, the documentation process is simple. However, the guardian in whose name the account is opened must bear:
- Proof of age: guardian’s PAN card.
- Proof of address: Guardian’s Aadhaar card.
- Proof of identity: Passport, driver’s license, voter ID card, work card issued by NREGA.
- Beneficiary’s birth certificate (daughter).
- Applications are also accepted upon presentation of the required documents.
Submit your application form
A guardian can open an SSA account for the girl under 10 with her own savings bank where she has an account, or with any authorized bank or post office. Applicants can download application forms online or drop them off at a post office. It is important to ensure that you understand the benefits as well as the terms and conditions of the SSA account, then submit your application only with the required documents.
Collect your booklet
Once the account has been opened, the tutor will receive a booklet by post containing information such as:
- Name, address and date of birth of account holder
- Account opening date
- Account number
- Name and address of guardian
- Relationship of Guardian to Account Holder
- Amount deposited
The guardian can keep the financial statements of the account in electronic form provided that the post office or the bank has access to an online banking solution.
The Department of Economic Affairs, under the Ministry of Finance, issues notification of any changes to the Sukanya Samriddhi Yojana Account through the powers provided for in Section 3A of the Government Savings Promotion Act 1873. This program is called the Sukanya Samriddhi Account Program, 2019, as per the latest GSR 914(E) notification.
Frequently Asked Questions (FAQ)
When can I open an SSA account for my daughter?
The SSA account can be opened by guardians for their daughter under the age of 10.
How many SSA accounts can I have?
When will the investment in an SSA account mature?
What is the maximum amount I can invest?