Tuesday, August 22, 2017

Why Invest in Sukanya Samriddhi Yojna scheme? Benefits and features

PM Modi has launched several good financial schemes e.g. Atal Pension Yojna to provide retirement solutions to many peoples from un-organized sector, PradhanMantri Jan Dhan yojana to open bank accounts for poor, Pradhanmantri Suraksha Yojna to provide the cheapest insurance to Indian citizens and my favorite Sukanya Samriddhi Yojna to save money for your daughter's education and marriage. It's one of the best, government-backed saving and investment option you will find, I guess only PPF is close matched to it, but this is only for parents with a girl child. If you have a daughter aged less than 10 years, you can open a Sukanya Samriddhi account for her in your nearest post office which provides investment option. The key feature of this account is slightly higher interest rate it offers in comparison of Personal Provident Fund account.

The interest rate is around 9.2% for the year 2015 - 2016 with added tax benefit because this scheme falls under section 80C of income tax in India. All the money you put in this account will be deducted from your taxable income, potentially bringing down you from higher tax bracket to lower one.

I strongly suggest you to learn more about this excellent scheme and if you have a daughter its right time to open a Sukanya Samriddhi account for her. In this article, I will share my experience and why I didn't open SSY account even after so much conviction, its bit of contradiction but I always put visibility, accessibility and inconvenience over investment and interest rate.

What is Sukanya Samriddhi Yojna?

For those who are not aware of this scheme, its an initiative by Narendra Modi led BJP Government under "BETI BACHAO, BETI PADAHO" campaign. Sukanya Samridhi Yojna allows parents to open an account in the name of their daughters whose age is less than 10 years. Like Public Provident Fund scheme this is also a long term scheme where you deposit some amount every year (you can even do multiple deposit in single year).

Main benefit of this scheme is attractive interest rate which is around 9.2% for year 2015 - 2016 and tax benefit, as this scheme also falls under 80C, which means all money invested on Sukanya Samriddhi Yojna is exempted from tax and reduced from your taxable income. You will get the money when your daughter becomes 21 years old but partial withdrawal is also permitted once your girl child become 18 years old.

Intention of this scheme is to safeguard future of your daughter and provide you a lump sum amount for her higher study or marriage. Any amount which is left after maturity will continue to get interest as well, which means you can withdraw money only when you really need it post maturity.

Here are some of the main features of Sukanya Samriddhi Yoja (SSY) for quick review

1) Only parents of girl child can open SSY account.

2) Maximum of two accounts can be open, so if you have two daughter, you can open separate Sukanya Samriddhi account for each of them.

3) Sukanya Samriddhi account is only available in Post office, you cannot open SSY account via bank. This is really disappointing because other schemes launched by PM Modi e.g. Atal Pension Yojna, Pradhan Mantri Jan dhan yojna, Pradhan Mantri Beema Suraksha Yojna all can be opened by both public and private sector banks. This is also main reason I didn't open SSY account for my daughter because managing a post office account that too for long term is quite a hassle.

3) You only need to deposit money for 14 years and account will be matured when your daughter will be 21 years old.

4) Premature withdrawal is permitted keeping higher education in mind. You can withdraw 50% of your investment once your daughter becomes 18 years old. This is similar to PPF because PPF also allows premature withdrawal of funds.

5) If you married your daughter after 18 years then you can also close Sukanya Samriddhi account after that.

6) You can deposit minimum Rs 1000 and maximum  Rs 1,50,000 on yearly basis, which is actually equal to maximum limit of PPF. Though multiple deposits are permitted  thought year until combined value is less than permitted limit e.g. 1.5 lakh.

7) Interest rate is currently higher than any saving scheme, even more than PPF. I think its 9.3% for year 2015-16 but I have also seen it quoted as 9.1% many places like below. So make sure you check with your post master before opening the account. BTW, interest rate is not fixed for 14 years and will be revised every year like PPF.

8) SSY investment falls under section of 80C of income tax, which means all investment in Sukanya Samriddhi Scheme are exempted from income tax.

Benefits and features of Sukanya Samriddhi Yojna

Why Invest in Sukanya Samriddhi Yojna scheme?

When I first come to know about this yojna (scheme) I really liked it, why? because I was always looking for an investment product which safeguards future of my child. Though there are lots of child plans available but they are nothing but insurance policies which are disguised as child insurance plan to take advantage of parents sentiments, and instead of safeguarding your child future they only safeguard the agent's future who is selling that policy. In those plans most of your money is goes as insurance fees rather than investment, but Sukanya Samriddhi Yojna is different, its like PPF where all amount you put in the account are investment.

Since girl child's needs lump sum money for their marriages and higher studies, its very important you start saving for those big ticket item from their early ages. It become even more important in today's expensive world where education and marriage expenses are rising significantly every year.

I have not yet opened an account for my daughter mainly because Sukanya Samriddhi Yojna is not reached to major banks yet and I don't like post office investments but will do it as soon as private or public bank starts offering it.

That's all about Sukanya Smariddhi Yojna. It's really a very good saving scheme because it offers higher interest rate than any other saving scheme, its ultra secured because backed by government like PPF. You can even open multiple Sukanya account, maximum of two if you have more than one daughters. Only drawback of this account is that its available via Post office. It's very difficult to manage Post office account in today's online world, its still 20 years behind and that's why I have not yet open an SSY account for my daughter, I am just waiting for it to be available via banks, but if you are find with Post office investment, go for it. One of the best gift you can give to your beloved daughter.  


  1. It seems banks are now started opening Sukanya Samriddhi Yojna, atlest I can see the link about how to open Sukanya Samriddhi yojna accoutn with ICICI here http://www.icicibank.com/Personal-Banking/faq/detail.page?identifier=faqs-sukanya-samriddhi-yojana-account-20150508163748477

  2. It seems even SBI is allowed to open Sukanya Samriddhi yojna account, see this page https://www.sbi.co.in/portal/web/govt-banking/sukanya-samriddhi-yojana

    1. Yes, now one can easily open Sukanya Samriddhi Account by visiting any authorized bank mentioned by Govt to open SSA account. It is better to open SSA in bank as one can get the benefit of online money transfer by net banking.