Your Complete Guide to Systematic Investment Plan (SIP)

investment

What is Sukanya Samriddhi Yojana SSY? 

Sukanya Samriddhi Yojana, SSY, was launched in the year 2015, as a part of the campaign, “Beti Bachao, Beti Padhao”, by Prime Minister Shri Narendra Modi. Launched to ensure a brighter future for the little girls, SSY is basically a girl-child prosperity scheme. Ever since its introduction, SSY has been very well accepted by the masses. The scheme offers financial security to the girl child and her parents and facilitates the child’s education and marriage expenses. Sukanya Samriddhi Yojana comes under Section 80C of the Income Tax Act and the returns earned are tax-free. 

Let us take a look at the highlights of the scheme: 

Parameters Details
Name of the SchemeSukanya Samriddhi Yojana
Account TypePost Office Saving Scheme
Launch DateJanuary 22, 2015
Launched ByPrime Minister Shri Narendra Modi
Current Rate of Interest 7.6%
Age Limit of Girl Child10 years or less
Minimum limit of DepositINR 250 
Maximum Limit of DepositINR 1.5 lakhs
Transfer of Account Allowed 

Who can invest in Sukanya Samriddhi Yojana SSY?


Any Indian resident who has a natural or legally adopted girl child under the age of 10 years can open this account in the child’s name. The other important points to keep in mind when you want to know about the eligibility conditions for SSY scheme are:

  • One family can open only 2 SSY accounts, one account for each girl. 3 accounts may be opened in case of twin girls
  • The account can be opened either through a post office or a public or a private bank
  • INR 250 is the minimum and INR 1.5 lakh is the maximum  limit of deposit in a financial year

How to invest in SSY?


Investing in Sukanya Samriddhi Yojana is very simple. You can open the account anytime after your daughter is born, but before she turns 10 years old. All post offices and about 25 banks offer this scheme, so once you make up your mind where to purchase the scheme from, you simply need to open an SSY account there. For this you need to:

  • Fill up the ‘Account Opening Form’
  • Submit the required documents, listed below, along with photographs
  • Make the deposit, minimum INR 250
  • The account will be opened soon. Hereafter, the deposit can be made via cash, cheque or a DD
  • Some banks also provide the Auto-Debit facility, where the deposit is automatically made from your savings accounts, as per your given instructions 

What documents are required for opening an SSY account?

When Sukanya Samriddhi Yojana account is to be opened the following documents are required:

  • Birth Certificate of the girl child
  • Government Authorised identity card and address proof of the Parent/ Guardian
  • 2 photographs of the girl child
  • Medical certificate for proof of birth of multiple girl children on a single order of birth
  • Any other paperwork as required by the bank/post office

How to use the Sukanya Samriddhi Yojana SSY Calculator?

Sukanya Samriddhi Yojana calculator is an online tool that helps you in calculating the returns that you would receive, on the basis of the invested amount and the tenure. You can visit the official website of India Post or the bank from which you have bought the scheme. Most banks have the SSY calculator in their online portal, if you cannot find it, you can visit a financial aggregator website. 

Once you reach the calculator, you simply need to enter the required information, such as the investment made every year, the age of the girl child and the date of the beginning of the scheme. In a few seconds, the calculator will display the year of maturity and the amount that you would receive at maturity. 

How does Sukanya Samriddhi Yojana SSY Calculator Work?

Currently, Sukanya Samriddhi Yojana offers a 7.6% interest per annum, and the tenure of each policy is 21 years. However, to keep the policy alive, it is essential to make at least one deposit each year for the first 14 years. So, even if you stop contributing to the account after this period, the investments collected so far will still earn interest on the prevailing rates. The amount that you receive on maturity, therefore, depends on the net contribution and the interest that is earned. 

The following formula is used to calculate the result: 

Compound Interest = P (1 + r/n) ^ nt. 

Here, P= Principal Amount

r= Rate of Interest

n= Number of times the interest compounds in a year

t= Number of Years

Comparative analysis of similar products: SSY and FD

Many investors find Fixed Deposits to be a benefitting investment, if you are contemplating which one to choose between Sukanya Samriddhi Yojana and a Fixed Deposit, the comparison will help you make a more informed decision:

ParameterSukanya Samriddhi YojanaFixed Deposit
EligibilityOnly parent/legal guardian of a girl child under the age of 10 yearsAny Indian citizen can invest in an FD
Rate of Interest The rate of interest is determined by the Government of India, all post offices and banks offer the same rateThe bank revises the rate of interest. The rates offered by a particular bank may differ from the other one.
Amount of Investment 

INR 250 and INR 1.5 lakh is the minimum and maximum  limit of deposits in a financial year


 

The minimum and maximum amount of investment varies from bank to bank
Lock-In PeriodAn investment for a period of 14 years has to be madeThe period may range between 7 days and 10 years
Partial WithdrawalPartial withdrawal can be made after the child attains the age of 18 years or clears her 10th standardPartial withdrawal is not allowed
Number of AccountsOnly one account per girl child is allowedAn investor can open more than one fixed deposits 

Who can use the SSY calculator? 

Anyone who wants to invest in Sukanya Samriddhi Yojana and is eligible to do so can find out about the amount he can receive from this savings scheme. Sukanya Samriddhi Yojana calculator is a free online tool and can be used any number of times. If you have a daughter under the age of 10, you can use to see and plan a certain corpus that you need to build for your girl child’s education, career or her wedding. 

How is interest calculated on SSY?

For Sukanya Samriddhi Yojana the rate of interest is determined by the Government of India and is reviewed quarterly. Let us take a look at the interest rates in the year 2020:

Period (2020)

1 Jan to 31 Mar

1 Apr to 30 June

1 July to 30 Sept

1 Oct to 31 Dec

Rate of Interest (per annum)

8.4% 

7.6%

7.6%

7.6%

Let us try to understand this with an example. Suppose Mr Ashish deposits INR 10,000 in the Sukanya Samriddhi Yojana that he has bought for his daughter. In the first year at the rate of 7.6% per annum, he would earn an interest of INR 760. Next year, he would again pay the deposit of INR 10,000 and now earn interest on INR 20,760. If the rate remains the same he would earn an interest of INR 1577.76 and would continue to do so for the upcoming years as well. 

Note

  • The rate of interest for the 3rd quarter of FY 2020-21 is 7.6% per annum
  • The deposit that falls under the “Account Under Default”, would earn interest on the post savings bank account, except when the default is because of death of parent/guardian who got the account opened
  • No interest will be paid once the SSY completes its tenure, that is after 21 years from opening
  • If the girl child becomes a non-citizen or non-resident of India, there would be no interest accrued 

How can I check the SSY accounts balance?

Your  Sukanya Samriddhi Yojana account balance can be checked from time to time in the following two ways:

  1. Offline Method
    Along with post offices, there are many banks that offer the  Sukanya Samriddhi Yojana. When you open an SSY account you will be provided with a passbook for the same. You can get this passbook updated from the bank to know your account balance.
  2. Online Method
    To know your balance online, follow the steps given below:
    1. Collect the login credentials from your respective post office/bank
    2. Using this information, log in through the official website 
    3. Once you log in, go to the homepage and select “Check Balance’, the balance will be displayed

Conclusion
 

More and more investors who are blessed with baby girls, are finding Sukanya Samriddhi Yojana to be an affordable way of investing for their daughter’s future. SSY not only gets them high returns but it also helps them to save taxes under 80C, of the Income Tax Act. You may have noticed that the rate of interest in SSY has decreased over the past few months, despite this the scheme continues to offer one of the highest interest rates as compared to the other small saving schemes available. With Sukanya Samriddhi Yojana you can build a corpus for your girl child without being concerned about the taxes.

Such schemes are easily trusted by most people as they are backed by the government. For investors who want to invest in no-risk schemes, but still diversify their investment portfolio, Sukanya Samriddhi Yojana is the ideal combination.

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