Sukanya Samriddhi Yojana — 8.2% for Your Girl Child

Interest is calculated on the lowest balance in the account between the close of the 5th day and the end of each month, and is compounded annually. The full year's interest is credited on 31 March. To maximise interest, deposit early in the financial year (ideally before the 5th of April) so the whole amount earns interest for the full year.

For a girl child, SSY usually gives higher returns because its current rate (8.2%) is above PPF's (7.1%), and both are EEE and tax-free. However, SSY can only be opened for a girl below 10 and locks in until she is 21. PPF is open to anyone, has a 15-year term extendable in 5-year blocks, and allows partial withdrawal from the 7th year, making it the more flexible general-purpose option.

A natural or legal guardian can open an SSY account for a resident-Indian girl child who is below 10 years of age at the time of opening. Only one account is allowed per girl child, and a family can hold a maximum of two SSY accounts (a third is permitted only if the second birth results in twins or triplets).

No. NRIs cannot open an SSY account — both the guardian and the girl child must be resident Indians. If the girl becomes an NRI after the account is opened, the account has to be closed and the balance is paid out; interest generally stops accruing from the date her residential status changes.

A family can open a maximum of two SSY accounts — one for each girl child. A third account is allowed only in the special case where the second birth produces twins or triplets (or the first birth itself produces triplets), so more than one eligible girl child exists.

The minimum deposit is Rs250 in a financial year and the maximum is Rs1,50,000 in a financial year. If the minimum Rs250 is not deposited in a year, the account becomes inactive and can be revived by paying a Rs50 penalty plus the minimum deposit for each defaulted year. Deposits can be made in lump sum or in instalments.

Deposits are required only for the first 15 years from the date of account opening. After that no further deposits are needed, but the balance continues to earn interest at the prevailing rate until the account matures 21 years from opening. This is why SSY keeps compounding for 6 more years after the last deposit.

SSY has full EEE tax status. Deposits qualify for a Section 80C deduction up to Rs1,50,000 a year (combined with other 80C investments), the annual interest is exempt under Section 10(11A), and the entire maturity amount is 100% tax-free. This makes it one of the most tax-efficient long-term savings instruments available.

No. The Section 80C deduction on SSY deposits is available only under the old tax regime. Under the new regime (the default since FY 2023-24), 80C deductions are not allowed. However, the interest and maturity of SSY remain fully tax-exempt regardless of which regime you choose, so the scheme is still attractive under the new regime for its returns.

Partial withdrawal of up to 50% of the previous financial year-end balance is allowed once the girl turns 18 or passes Class 10, for higher-education or marriage expenses. Full premature closure is permitted on the girl's marriage after 18. Closure on compassionate grounds — such as death of the account holder or a life-threatening illness — is allowed after 5 years from opening.

The account matures 21 years from the date of opening, regardless of the girl's age at that point. It can also be closed earlier for the girl's marriage after she turns 18. Deposits are made only for the first 15 years; the balance then compounds until the 21-year maturity, when the full amount is paid out tax-free.

You can open an SSY account at any post office (India Post) or at authorised branches of most banks — including SBI, HDFC Bank, ICICI Bank, Axis Bank, Bank of Baroda, PNB and Canara Bank. You need the girl's birth certificate, the guardian's identity and address proof (Aadhaar/PAN) and a photograph. Several private banks also allow online opening via net banking.

You need the girl child's birth certificate, the guardian's identity proof (Aadhaar and PAN), the guardian's address proof, and passport-size photographs of both the guardian and the child. The account-opening form (Form-1) is filled at the bank or post office along with the initial deposit of at least Rs250.