Narendra Modi’s government raised Sukanya Samriddhi Yojana (SSY) interest rates by 20% during January-March 2024, just ahead of Lok Sabha elections 2024.
A circular from the finance ministry states that the Sukanya Samriddhi Scheme now offers 8.2% instead of the current 8%. Narendra Modi announces interest rates on small savings schemes operated mainly through post offices each quarter.
What is Sukanya Samriddhi Yojana (SSY), And How Does It Work?
On January 22, 2015, the Indian government unveiled a social campaign designed to combat child sex in India – the Beti Bachao Beti Padhao campaign (BP), an official initiative from both the Ministry of Women and Child Development and the Ministry of Health and Family Welfare – with the aim of “Saving Girls, Educating Girl Children.” This joint national effort includes messages such as ‘Save Girls Educate the Girl Child.”
BJP aims to achieve the following:
- Stop gender discrimination and the practice of sex determination.
- To protect and ensure the safety of girls.
- Ensure girls are more involved in education, sports, and other activities.
SSY strives to address one of the primary obstacles affecting girls’ children – education. By helping parents create funds to cover their daughters’ education and marriage expenses, this program seeks to ensure a brighter future for girls’ children across India. For this purpose, they have designed their Sukanya Samriddhi Account program.
Benefits of Sukanya Samriddhi Yojana
- Minimum Deposit: A minimum deposit of Rs. 250 annually is required to maintain an SSY account. You can deposit as much money as you want up to Rs.1.5 lakhs per fiscal year. Payments are affordable to all social groups. If you miss a fee for an entire year, there will be a penalty of Rs.50 on the minimum missed payment of Rs.250. However, the account will continue.
- Attractive Interest Rate: Enjoys an interest rate of 8% per year (as of Q3 FY 2023-24).
- Tax Benefits: Get a full tax deduction for principal investments up to Rs1.5 Lakh each year under Section 80C. The interest, as well as the maturity amount, is free.
- Long tenure: Protect your daughter’s financial future by granting her a maturity period of 21 years or until she marries after 18 (whichever comes first).
- Educational expenses covered: 50% of your account balance at the end of the previous fiscal year can be withdrawn to pay for your daughter’s education. You can avail of this by submitting proofs of admission.
- Guaranteed returns: As SSY is a Government-backed scheme, there is a guaranteed return upon maturity.
- Convenient transfer: You can transfer the SSY account from any Indian post office or bank to another.
Sukanya Samriddhi Yojana: Tax Benefits
The SSY also received certain tax incentives to encourage investment in SSY:
- Section 80C allows for deductions on investments made under the SSY Scheme up to a limit of Rs. 1.5 lakh.
- Section 10 of the Income Tax Act exempts from tax the interest accrued on this account, which is compounded each year.
- The income tax exemption also extends to the proceeds of maturity/withdrawal.
Sukanya Samriddhi Account Withdrawal And Maturity Rules
Guardians may withdraw up to 50 percent of a girl’s account balance once she turns 18. Under Department of Posts regulations, withdrawals can be made at once or in instalments over five years.
Interest Rates On Small Savings Schemes Will Be Raised By Up To 20 Basis Points In Q4FY24.
The government also increased the rate of the 3-year term deposit by ten basis points in the quarter of January-March. Still, it kept the rates for other small saving schemes. The 3-year deposit will now yield 7.1 percent, down from 7 percent.
Sukanya Samriddhi Yojana interest rate 2023
The interest rates for Sukanya Sariddhi are calculated quarterly. The chart below shows the historical interest rate trend for Sukanya Sariddhi.
- Rate of interest in the third quarter of FY 2023-2024. October to December 20, 2023 (Q3 of FY 2023-24).
- The interest rate is 8% for the second quarter of FY 2023-2024. The rate of interest for the 2nd quarter of FY 2023-2024, i.e.
- Interest rates have increased for the first quarter of FY 2023-2024. The rate of interest for the 1st quarter of FY 2023-2024, i.e.
- The interest rate in the 4th Quarter of FY 2022-2023 is 7.6%. The interest rate for the 4th quarter of FY 2022-2023 was 7.6%.
- Interest rates for the first quarter of FY 2022-2023, i.e., The rate of interest for the 1st quarter of FY 2022-2023, i.e.
Latest Interest Rates On Small Savings Schemes For The Quarter Of January-March 2024
PPF – 7.1%
SCSS – 8.2%
Sukanya Yojana – 8.2%
NSC – 7.7%
The PO-Monthly income Scheme is 7.4%
Kisan Vikas Patra – 7.5%
One-Year Deposits – 6.9%
Two-Year Deposits – 7.0%
Three-Year Deposits – 7.1%
Deposit for 5 Years – 7.5%
Five-Year RD: 6.7%
Sukanya Samriddhi Yojana Age Limit And Maturity Period
Opening an SSY Account
One SSY Account per girl child may be opened. These accounts can be opened at any authorised commercial bank branch or post office between birth and ten years of age.
Beneficiary SSY
From the moment the account is opened until the maturity/closure date, any girl child who is an Indian resident is a beneficiary of SSY.
Deposits Made Under SSY
Guardians may deposit and manage an SSY account until the girl reaches 18 when it will become her responsibility to manage and operate it herself. Minimum deposits to an SSY account (previously Rs.1,000) is Rs.250 multiplied by Rs.50 – maximum annually up to 15 years is Rs.1,50k payable using cash, cheque, demand draft, or online transfers as deposit methods.
Interest On Deposits
Interest for FY 2023-2024 will be at an average annual rate of 8% p.a. If an “Account in Default” (with at least Rs 250 not being deposited annually) remains unregularized by its designated due date, its entire deposit will continue earning interest until the maturity date. Regularisation can occur within 15 years after account opening by paying a penalty of Rs 50 for every year of non-deposit.
After 21 years have elapsed since opening an SSY account, no interest is payable, and none accrues to either citizen or resident status in India. Furthermore, depositors who exceed the maximum limit (Rs 1,50,000) can withdraw it without incurring interest charges.
Period Of Maturity For SSY
SSY maturity is 21 years, starting with the account opening or when she marries after 18 years. Contributions are required for 15 years. The SSY account continues to earn interest even if no further deposits are made.
Calculation of Sukanya Samriddhi Yojana Interest
Interest for the SSY Account is calculated on the lowest balance of the calendar month. The interest is calculated between the 5th day of the calendar month and the end. The interest is credited only once at the end of each financial year.
You can calculate the interest on an SSY using the formula below:
A = P(1+r/n)^nt
Here:
P = Initial Deposit
r = Rate Of Interest
n = Number of Years Interest Compounds
t = Number Of Years
A = Amount at maturity
Manually calculating interest can be challenging when dealing with Sukanya Samriddhi Yojana accounts due to annual compounded interest, making calculations tedious.
Our Sukanya Samriddhi Yojana Calculator simplifies this task by automatically calculating the maturity amount after entering details such as probable investment amount each year, the girl’s age, and the year the account started to date.
Sukanya Samriddhi Yojana Eligibility
- Only the parents or legal guardians can open an SSY account.
- The girl child has to be an Indian resident and under ten years old at the time the account is opened.
- A girl child can only have one account.
- A family can only open two SSY accounts, i.e., One for each girl. More than two girls can open Sukanya Samriddhi accounts if the following special conditions are met:
- A third account may be opened if a girl is born before twins or triplets or if the triplets arrive first.
- A third SSY account can’t be opened when a girl is born following the birth of triplets or twins.
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