Gift your daughter a bright future with Sukanya Samriddhi Yojana

5 MinsNovember 12, 2021

As parents, you spend a lot of time planning for your child’s higher education and marriage. The planning often starts right from the birth of your child. You also put a lot of thought into selecting suitable investment avenues for these goals. 

sukanya samriddhi yojana


If you have a daughter, saving for her future is a bit easier thanks to the Sukanya Samriddhi Yojana (SSY), a government-backed savings scheme, exclusively for the benefit of the girl child. Axis Bank is one of the authorised banks offering the SSY Account. Read on to know more about the benefits of the scheme. 

How it works: 
The parent or the guardian can open the SSY Account any time after the birth of the girl child till she is 10 years of age. Your daughter will be the account holder and the beneficiary of the SSY Account. She must be an Indian citizen and resident of India at the time of account opening and has to remain so until maturity or closure of the account, whichever is earlier. If resident status changes to NRI after opening the account, the account can continue till maturity or can be closed prematurely.

Only one SSY Account per girl child is allowed. The parent or guardian may open the SSY Account for a maximum of two girl children only. More than two accounts may be opened in a family if twin girls are born in the first or second order of birth or in both, on submission of an affidavit by the guardian. It has to be supported with birth certificates of the twins/triplets regarding the birth of such multiple girl children in the first two orders of birth in a family. Birth Certificate of the Girl Child is mandatory along with KYC documents of Guardian. To know the KYC documents required to open the SSY Account, click here.

The initial amount for opening the SSY Account is only Rs 250. It can be paid via cash, cheque, demand draft. For subsequent funding, in addition to these options, you can also use internet banking. Thereafter regular deposits have to be made every year till the completion of 15 years from the date of account opening. 

Keep in mind: 

  • The tenure of the SSY Account is 21 years from the date of account opening
  • You can make any number of deposits into the SSY Account in a year.
  • The mandatory minimum contribution is Rs 250 and the upper limit is Rs 1.50 lakh in a financial year. 
  • If the minimum annual contributions are not made, the SSY Account will become inactive.
  • To reactivate such an account you need to pay a penalty of Rs 50 per default year.
  • The account can be operated by the parent or the girl child herself if she is over 10 years. 
  • Once the girl child turns 18 years of age the SSY Account has to be mandatorily operated by her.  

Why you should invest in Sukanya Samriddhi Yojana

  • Secured returns – Since it is a government-backed scheme, the returns are guaranteed. The interest rate is fixed by the government every quarter. It is calculated for the month on the lowest balance in the account between the close of the fifth and the end of the month. 
  • Tax Benefit –Similar to the Public Provident Fund Account ( PPF Account), the SSY also enjoys an Exempt-Exempt-Exempt tax status. This means that the contributions into the SSY Account entitle you to a tax benefit of up to Rs 1.50 lakh under Section 80C of the Income Tax Act, 1961. In addition, the interest earned as well as the amount at maturity is tax-free. 
  • Long-term investment- The lock-in period till 21 years from the date of opening the account makes it suitable for long-term investments. This enables you to save money for long-term goals such as your daughter’s higher education or her marriage.

[Also Read: Supplement Your Income; Generate Wealth by Investing Smartly]

Option for premature withdrawal – Despite a lock-in period till your daughter is 21 years of age, there is the option to withdraw money after completion of 5 years from account opening date. The option is available only for educational purposes.

How to close the account 

The SSY Account matures and formally closes after 21 years of opening. But it can also be closed prematurely under the following conditions: 

  • If your daughter gets married before the maturity of the account
  • If your daughter becomes an NRI or attains Person of Indian Origin status 
  • On extreme compassionate grounds wherein the money is required for her medical treatment, or in the event of untimely death. In such scenarios, a formal application needs to be made in Form-2. 

So wait no more, Sukanya Samriddhi Yojana account with Axis Bank and invest in your daughter’s future financial goals. You could also being to inculcate the habit of saving by deploying the cash gifts she receives into this account.

Disclaimer: This article has been authored by PersonalFN, a Mumbai based Financial Planning and Mutual Fund research firm. Axis Bank doesn't influence any views of the author in any way. Axis Bank & PersonalFN shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.