The scheme currently offers an interest rate of 8.2%, the highest among small savings schemes for the quarter. It also comes with tax benefits, making it a popular long-term savings option for expenses such as a daughter’s higher education.
But the money isn’t freely available for withdrawal whenever needed. SSY has specific rules governing when and how much can be taken out.
How does Sukanya Samriddhi work?
A parent or legal guardian can open an SSY account at a post office or participating bank for a girl who is below 10 years of age.
An account can be opened with as little as ₹250, while a maximum of ₹1.5 lakh can be deposited in a financial year.
The account matures 21 years after it is opened.
Investments qualify for a deduction of up to ₹1.5 lakh under Section 80C of the Income-Tax Act. The interest earned and the amount received on maturity are also tax-free.
A minimum contribution must be made to keep the account active. If this isn’t done, the account can be regularised by paying the prescribed penalty.
When can you withdraw money?
SSY allows money to be withdrawn before the account’s 21-year maturity in certain circumstances.
A partial withdrawal of up to 50% of the eligible balance is permitted after the girl turns 18, primarily to pay for higher education.
For an education-related withdrawal, documents showing that the money is actually required for higher studies, such as an admission offer or fee details, may have to be submitted.
The full balance is normally available once the account matures.
What documents may be needed?
Parents or guardians can approach the bank or post office where the SSY account is maintained and submit the prescribed withdrawal form.
Documents may include identification and age-related records such as Aadhaar and the girl’s birth certificate. For withdrawals towards higher education, proof of admission or documents showing the fees payable may also be required.
The exact documentation can depend on the reason for withdrawal and the institution processing the request.
Once the application and supporting documents are submitted, the bank or post office will process the request and transfer the approved amount.
Can an SSY account be closed early?
Premature closure is allowed only in certain circumstances.
If the girl dies, the account can be closed and the balance along with applicable interest can be paid to the parent or guardian.
Early closure may also be permitted in specified exceptional circumstances, subject to the applicable SSY rules and supporting documents.
