Opening a Sukanya Samriddhi Account for your daughter? Here’s what you need to know

You can open a Sukanya Samriddhi Account at authorised banks or at a post office

• Sukanya Samriddhi Account is for girls under 10 years old
• Offers high interest, tax benefits, and long-term savings
• Minimum deposit is Rs 250, maximum is Rs 1.5 lakh per year

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If you have a young daughter and are thinking about setting aside money for her education or wedding, the Sukanya Samriddhi Account (SSA) is often the first scheme people suggest.

It’s backed by the government, offers a relatively high interest rate compared to many fixed-income options, and comes with tax benefits. But before you walk into a bank or post office, it helps to know how it works.

Who can open it

The account can be opened in the name of a girl child below the age of 10 years. A parent or legal guardian opens and operates the account on her behalf.

Only one account is allowed per girl child, and a family can open accounts for up to two daughters. In case of twins or triplets, there are exceptions.

If your daughter has already crossed 10, the scheme is no longer available for her.

Where you can open it

You can open a Sukanya Samriddhi Account at authorised banks or at a post office. Most major public and private sector banks offer it.

You’ll need to submit basic documents such as the girl child’s birth certificate, identity and address proof of the parent or guardian, and photographs. Some banks may ask for additional KYC documents.

How much do you need to invest

The account has a low minimum threshold of Rs 250 per financial year to keep the account active. The maximum you can deposit is Rs 1.5 lakh per year.

The money can be deposited in instalments or as a lumpsum — there’s flexibility within the annual limit.

Deposits can be made for 15 years from the date of opening the account. After that, the account continues to earn interest until maturity, even if you don’t contribute further.

Interest and maturity

The interest rate is declared by the government every quarter. It is usually higher than regular savings accounts and many fixed deposits, though it can change. Currently, SSA is offering an 8.2 percent interest.

The account matures 21 years from the date of opening. However, partial withdrawal is allowed once the girl turns 18 for higher education expenses, subject to certain conditions.

Full withdrawal is allowed at maturity or at the time of her marriage after she turns 18.

Tax benefits

Sukanya Samriddhi falls under the EEE category. That means the amount invested qualifies for deduction under Section 80C (within the Rs 1.5 lakh overall limit), the interest earned is tax-free, and the maturity amount is also tax-free.

For parents in higher tax brackets, this tax treatment is a major advantage.

Things to think about before opening

The scheme runs for the long-term. Once you invest, the money is locked in for many years. Premature closure is allowed only in special cases.

If you’re comfortable committing funds for the long term and want a relatively stable, tax-efficient option for your daughter, it can be useful. But it shouldn’t be the only investment in her name. Diversifying across different asset classes may be more helpful in the long run.

FAQs

1.  Can I open the account online?

Some banks allow you to open the account online partially, but in most cases you may still need to visit the branch or post office with original documents.

2.  Can both parents contribute to the same account?

Yes. Anyone can make a deposit into the account, but the total contribution cannot be more than Rs 1.5 lakh per financial year.

3.  What happens if I miss a yearly deposit?

If the minimum Rs 250 is not deposited in a financial year, the account becomes inactive. It can usually be revived by paying a small penalty along with the minimum contribution.