Tax saving: Earn Rs 70 lakh by investing 12,500/month

The Sukanya Samriddhi Yojana (SSY) is a tax-free small savings scheme for girl children. It offers an attractive interest rate of 8.2% for the January to March quarter of 2024. The principal amount that you invest is eligible for a tax deduction of up to Rs 1.5 lakh under Section 80C and the interest that it earns is also tax-free. High interest rates and tax benefits make Sukanya Samriddhi Yojana a good deal for many parents with a girl child.

How much money can you make from this popular post office scheme? What are the benefits and limitations of SSY that you must know before investing in it this tax-saving season? ET Wealth Online decodes Sukanya Samriddhi Yojana:


What are the features of Sukanya Samriddhi Yojana? Eligibility, entry age, minimum and maximum deposit and more

To invest in the Sukanya Samriddhi Yojana, you need to be a resident Indian and parent or legal guardian of the girl child. She must be ten years or less to be eligible for the Sukanya Samriddhi Yojana. So you can open an SSY account as soon as the girl child is born and up to 10 years of age. Barring some exception maximum of two Sukanya Samriddhi accounts can be opened for two girls.

You can open a Sukanya Samriddhi Account in post offices or any designated bank branches.

You can start a Sukanya Samriddhi Account with a minimum deposit of Rs 250. In the subsequent years you need to deposit a minimum Rs 250 in a given financial year. The maximum deposit can go up to Rs 1.5 lakh in a financial year. You have the option to invest in lumpsum or multiple installments.

What is the interest rate in a Sukanya Samriddhi Account?

For the January-March quarter of 2024, you will get an interest rate of 8.2% in the Sukanya Samriddhi Account. Do keep in mind that the interest rate is revised every quarter, and the new rate will apply to the SSY subscribers.

Sukanya Samriddhi Account: Tenure, maturity, premature withdrawal norms and more

The maturity part of SSY can be a little tricky. In your Sukanya Samriddhi Account, you have to deposit money for 15 years from the date of opening the account. The account will mature 21 years from the date of opening. There is an option to close the account at the time of marriage of the girl child (in whose name the account is) after she reaches 18 years.

The scheme allows a withdrawal of up to 50% of the corpus. But this can be done only for education expenses of the girl child concerned in the year preceding the financial year the girl turns 18 or passes Class X. Premature closure is allowed after five years of the account opening on certain conditions such as the death of the account holder, life-threatening disease of the account holder, or death of the guardian operating the account.

How is the interest of the Sukanya Samriddhi Account credited?

The interest of the Sukanya Samriddhi Account will be calculated for the calendar month on the lowest balance in the account between the close of the fifth day and the end of the month. The interest will be credited to the account at the end of each financial year.

What are the tax benefits of the Sukanya Samriddhi Account?

The Sukanya Samriddhi Account enjoys the EEE (exempt-exempt-exempt) category. You can claim a tax deduction of Rs 1.5 lakh under Section 80C of the Income-tax Act, 1961. The interest that it earns every year is also tax -free. Further, there is no tax on the amount (principal + interest) that the girl child will get on maturity. Partial withdrawal from the Sukanya Yojana Account is also tax -free.

Your money in a Sukanya Samriddhi Account is considered safe as it is a small savings scheme offered by the Government of India. As of now, there is no loan facility available on SSY accounts.

Sukanya Samriddhi Account Returns: All you need to know

Remember that the interest rate of Sukanya Samriddhi Account is revised every quarter. Since inception, Sukanya Samriddhi Yojana has given a maximum interest rate of 9.2%. The scheme’s lowest interest rate has been 7.6%.

For our calculation, we assume that your investment will fetch 8% for the entire tenure of 21 years. Suppose you invest Rs 1.5 lakh in SSY every year (or Rs 12,500 per month) for 15 years and your daughter will get around Rs 70 lakh at maturity after 21 years.

How much money will you get from Sukanya Samriddhi Yojana after 21 years?

Year of Account Opening Balance (Rs) Annual Contribution (Rs) Opening + Annual Contribution (Rs)

Returns (%) Interest Credited (Rs)

Closing Balance (Rs)
1


150,000


8

12,000

162,000

2

162,000

150,000

312,000

8

24,960

336,960

3

336,960

150,000

486,960

8

38,957

525,917

4

525,917

150,000

675,917

8

54,073

729,990

5

729,990

150,000

879,990

8

70,399

950,389

6

950,389

150,000

1,100,389

8

88,031

1,188,421

7

1,188,421

150,000

1,338,421

8

107,074

1,445,494

8

1,445,494

150,000

1,595,494

8

127,640

1,723,134

9

1,723,134

150,000

1,873,134

8

149,851

2,022,984

10

2,022,984

150,000

2,172,984

8

173,839

2,346,823

11

2,346,823

150,000

2,496,823

8

199,746

2,696,569

12

2,696,569

150,000

2,846,569

8

227,726

3,074,294

13

3,074,294

150,000

3,224,294

8

257,944

3,482,238

14

3,482,238

150,000

3,632,238

8

290,579

3,922,817

15

3,922,817

150,000

4,072,817

8

325,825

4,398,642

16

4,398,642


4,398,642

8

351,891

4,750,534

17

4,750,534


4,750,534

8

380,043

5,130,577

18

5,130,577


5,130,577

8

410,446

5,541,023

19

5,541,023


5,541,023

8 443,282

5,984,305

20

5,984,305


5,984,305

8

478,744

6,463,049

21 6,463,049


6,463,049

8 517,044

6,980,093

For monthly installments, invest by fifth of every month

For lumpsum, invest by April 5 every financial year



If you invest Rs 1 lakh every year or Rs 8,333.33 every month for 15 years, your daughter will get Rs 46.5 lakh at maturity after 21 years.

Key things you need to keep in mind before investing in Sukanya Samriddhi Account

1) You can take the benefit of this small saving scheme only if you have a daughter and she meets the eligibility criteria.

2) It has a long lock-in period of 21 years. So SSY is meant for long-term investing or meeting future goals of your daughter.

3) The interest rate of Sukanya Samriddhi Yojana is linked with G-Sec. The rate will be revised every quarter, and it will be applicable to existing investors. So, the interest rate at which you invest will not be fixed for the entire tenure of the investment.

4) A lot of investors look for products that offer a fixed return on maturity and protect the invested amount from volatility. For such investors, Sukanya Samriddhi Account may be a good opportunity for long-term savings.

5) Tax Exempt-Exempt-Exempt (EEE) is one of the key reasons investors are drawn towards this popular small-savings scheme.

(Your legal guide on estate planning, inheritance, will and more.)

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