How Sukanya Samriddhi Yojana Works

Summary

Sukanya Samriddhi Yojana (SSY) is a government savings scheme for the girl child, offering one of the highest guaranteed interest rates among small savings schemes (currently 8.2%). The account must be opened before the girl turns 10, contributions are made for 15 years, and the account matures when she turns 21. SSY has EEE (Exempt-Exempt-Exempt) tax status.

How it works

Account rules

• Eligibility: Parents/guardians of a girl child under 10 years
• Maximum 2 accounts per family (one per girl child)
• Contribution period: 15 years from account opening
• Maturity: 21 years from opening (or marriage after age 18)
• Minimum deposit: Rs 250/year
• Maximum deposit: Rs 1,50,000/year

Interest rate

The interest rate is set quarterly by the Ministry of Finance. As of Q4 FY 2025-26, it stands at 8.2%, making it higher than PPF (7.1%) and most FDs.

Interest is compounded annually and credited at year-end.

Withdrawal

• Partial withdrawal: 50% of balance for education or marriage, allowed after the girl turns 18
• Full withdrawal: On maturity (21 years) or marriage (after 18)
• Premature closure: Allowed in cases of the account holder’s death, life-threatening illness, or change in residency status

Worked example

Account opened at birth, Rs 1,50,000/year for 15 years at 8.2%

1. Total deposited: Rs 1,50,000 x 15 = Rs 22,50,000
2. Interest earned (years 1-15): deposits grow with compound interest
3. Years 16-21: no deposits, but balance continues earning 8.2%
4. Maturity value at year 21: approximately Rs 71,82,000
5. Interest earned: approximately Rs 49,32,000
6. All completely tax-free

At lower contributions (Rs 50,000/year):

• Total deposited: Rs 7,50,000
• Maturity value: approximately Rs 23,94,000

Inputs explained

• Annual contribution — amount deposited per year (Rs 250 to Rs 1,50,000)
• Girl child’s current age — determines remaining contribution years and maturity timeline
• Interest rate — current SSY rate (can change quarterly)

Outputs explained

• Maturity value — total amount receivable at age 21
• Interest earned — cumulative interest over 21 years
• Year-by-year growth — annual balance, interest, and deposits
• Section 80C benefit — annual tax deduction value

Assumptions & limitations

• The interest rate is not guaranteed for the full 21-year period. It is reviewed quarterly and has ranged from 7.6% to 9.2%.
• Accounts can only be opened at post offices or designated banks.
• The maximum Rs 1.5 lakh limit is shared with Section 80C under the old regime.
• If minimum deposit is not made in a year, the account is classified as irregular (penalty of Rs 50/year to reactivate).
• Only available for girl children. No equivalent scheme exists for boys under SSY.