Sukanya Samriddhi Yojana: rules, benefits and how it works

Who can open an account

The account is opened in the name of a girl child, by her parent or legal guardian, and at the time of writing the girl must be under a set age limit when it is opened, which has been 10 years. A family can generally open one account per girl child, up to two girls, with an exception for twins or triplets. Accounts are available at post offices and authorised banks.

Deposits and duration

• Minimum deposit: a small amount each year, and at the time of writing a maximum of 1.5 lakh rupees per financial year.
• Deposit period: you deposit for the first 15 years from opening the account.
• Maturity: the account matures 21 years after it was opened, when the balance is paid out.
• Missing a minimum deposit in a year makes the account default, but it can be revived by paying the minimum along with a small penalty.

Interest and tax

The government sets the interest rate and reviews it each quarter, alongside other small savings rates, so it can change over the life of the account. Interest is compounded annually. Check the current rate on the scheme page rather than relying on an old figure.

SSY is commonly described as EEE: deposits qualify for a deduction under Section 80C (within its overall limit and only under the old tax regime), the interest is tax-free and the maturity proceeds are tax-free. That combination is what makes it attractive compared with a taxable fixed deposit.

Withdrawals

You cannot take the money out freely. Once the girl turns 18, or passes class 10, a limited portion of the balance can be withdrawn for higher education, and marriage after 18 is another permitted reason for closing the account. Premature closure is otherwise allowed only in specific cases, such as the death of the account holder or severe hardship, under the rules in force.

Things to know

• The rules on who may operate the account have been tightened over the years, including on accounts opened by someone other than a parent or legal guardian. If you are unsure about an existing account, ask the bank or post office.
• It is a long commitment, so it works best as part of a wider plan and alongside an emergency fund and other savings.
• Rates, limits and rules are set by the government and may change. Confirm current terms before you open.

Is it right for you?

For families who want a safe, tax-efficient, long-term fund for a daughter, SSY is one of the strongest options available, provided you accept the lock-in. This is general information, not personal financial advice.