Sukanya Samriddhi Yojana: Interest, withdrawal process ? All you need to know

Among the post office savings schemes offered by India Post, Sukanya Samriddhi Account offers one of the highest interest rates when compared to many other schemes. Sukanya Samriddhi Yojana (SSY) is one of the 9 small saving investment schemes, run under the Ministry of Communications.

Other savings schemes that are offered include Post Office Monthly Income Scheme Account (MIS), 5-Year Post Office Recurring Deposit Account (RD), 15 year Public Provident Fund Account (PPF), Senior Citizen Savings Scheme (SCSS), National Savings Certificates (NSC), Kisan Vikas Patra (KVP), and Post Office Time Deposit Account (TD), and Post Office Savings Account.

The SSY account can be opened for a girl child before she turns 10 years. To open this account, a minimum of Rs 1,000 is needed to be deposited and a maximum of Rs 1,50,000 lakh can be deposited in a year, under this scheme. The interest rate is revised quarterly, which is compounded, and credited yearly.

Tax benefits are also available under this scheme for investors and currently, the interest rate offered by Sukanya Samriddhi Account is 8.4 per cent.

5 ways to benefit from the Sukanya Samriddhi scheme: 

1. Interest: This scheme currently offers an interest rate of 8.4 per cent per annum, which is the second-highest interest rate among all small savings schemes offered under the post office schemes. The interest rate is declared by the Government every year for the current Financial Year, which is compounded and credited yearly.

Between the 5th and last day of the month basis on the lowest balance, the interest is accrued on a monthly.

2. Withdrawal: From the date of opening of the account, the scheme matures after 21 years. However, withdrawal can be made on certain occasions such as during the marriage of the girl child, the amount can be withdrawn.

Also, if funds are required for higher education, premature withdrawal can be made on attaining the age of 18 years by the girl child. Premature withdrawal is limited to 50 per cent of the balance that was at the end of the preceding financial year.

Deposits can be made to this account till the account holder completes 14 years from the date of opening of the account, even though maturity is 21 years from the date of opening of the account.

3. Maturity proceeds: The maturity proceeds are paid to the girl child holding the account, once the account matures. Both the account balance along with accrued interest is paid directly to the account holder. Moreover, the interest is paid even after maturity, unlike other financial schemes. This makes this feature so popular among investors.

Hence, under this SSY scheme, after maturity, if the investor does not close the account, interest will be paid to the account till the final closure of the account.

4. Tax-efficient: Income tax is exempted from the contribution made to this account under Section 80 C of the Income Tax Act. This scheme offers tax exemption on the interest and also at the time of withdrawal.

This scheme falls under EEE (exempt, exempt, exempt), wherein exemption is available on the contribution made, the interest income, and at the time of withdrawal.

5. Flexibility: SSY account offers a lot of flexibility to the investors to operate the account. For starters, the account can be opened with a minimum deposit of just Rs 1000, which can be continued with any amount in multiples of Rs 100.

Every Financial Year, a minimum of only Rs 1000 needs to be deposited to keep account operative. A max limit of 1.5 lakh, can be deposited in this account during a financial year, even in the case of two daughters. In a Financial Year, the cumulative contribution cannot exceed Rs 1.5 lakh.

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