Sukanya Samriddhi Yojana in detail

Sukanya Samriddhi Yojana (SSY) was launched in 2015 for the girl child.  It is another small savings scheme like PPF from the government of India and it will be administered through post office and banks.

The maturity amount and the total interest paid on the scheme will be tax free under EEE like in PPF. 

It is a long term debt investment which can help the girl child for her higher education and marriage.

Under this scheme, the account can be opened for a girl child in the age group of 0 -10.

The account can be opened by parents or legal guardian.

The yearly investment is flexible and you can pay any amount between 250 – 1, 50,000 as you like in lumpsum or in installments. If you don’t invest the minimum amount of 250 in a year, there will be a penalty of Rs. 50/- to continue the account. You can invest money for 15 years from the date of opening.

The account will mature after 21 years from the date of opening of the account. In case of early marriage, the account will be closed on marriage after age 18.

There is early withdrawal option in Sukanya Samridhi Account. 50% of the accumulation can be withdrawn after age 18.  This can help funding the child’s higher education.

The interest rate for this scheme will be declared by government every quarter. The interest rate is 7.6% as on date.  Interest will be compounded annually.

The investment upto 1.5 lakhs in a year will qualify for tax deduction under Section 80C of the Income Tax Act. But, more attractive is the taxation of this scheme on maturity. The maturity amount including interest is totally tax free on withdrawal.

Eligibility: A girl child (Indian Resident) between the age of 0-10 years is eligible for Sukanya Samriddhi Yojana.

Minimum investment amount: An account can be opened by depositing Rs 250 with the required documents (Note: earlier, the minimum amount was Rs. 1000). The minimum amount that can be deposited in a Sukanya Samriddhi Scheme is Rs. 250 per annum. The maximum limit is Rs. 1.5 Lakhs per annum for an account.

Maturity Period: The maturity period of Sukanya Samriddhi Yojana is 21 years. For example: If you open an account when the girl child is 8 years old, the account will mature when she will turn 29.

Withdrawal Rules: You can withdraw money from Sukanya Samriddhi account when the girl child turns 18 years old. There are 2 rules for withdrawal:

  • Partial Withdrawal – Maximum 50% of the balance (of the preceding year) can be withdrawn for the higher education of girl child.
  • Complete Withdrawal – After the completion of 21 years from date of opening the account or on marriage of the girl child, whichever is earlier. However, the account holder needs to provide an affidavit stating that she is not below the age of 18 at the time of closing the account.

Closing the account: In the unfortunate event of death of the account holder, the scheme can be closed immediately by producing the death certificate.

The Sukanya Samriddhi account can be closed after 5 years. The pre-closure request can be made after 5 years of opening the account. This request is only considered under extreme compassionate grounds like life threatening disease.

Tax implications: The interest on Sukanya Samriddhi account is not taxable. The scheme comes under EEE category

  • Exempt at the time of investment
  • Exempt at the time of accumulation
  • Exempt at the time of withdrawal.

Documents for Opening SSY Account:

  • Account Opening Form
  • Birth Certificate of Girl Child
  • Address Proof of Parents/Guardian
  • ID proof of guardian/parents

Benefits of SSY Scheme:

  • Interest rates are higher than most of the debt-oriented schemes like bank deposit and FDs / PPF.
  • Since it’s a debt scheme by Govt. of India, chances of defaults are Nil.
  • Tax benefits under Section 80C
  • You can invest any amount between 250 – 1.5 Lakhs per year as per your cash position.
  • Scheme comes under EEE as explained above. This is the most attractiveness of this scheme.


  • Lock in period is high in this scheme. You can not withdraw money till the girl child is 18 years old.
  • You can withdraw only 50% at the time of higher education.
  • Interest rates may higher today but may not be in the same range for long periods.
  • Maturity proceeds would be in the hands of Girl Child.

What can you do?

It is not advisable to create the entire amount for your daughter’s needs by investing in this scheme. If your daughter’s higher education is 15 years away, you can earn better returns by investing in equities through mutual funds. But you should not invest the entire amount in equities.

For the debt portion, you can consider this scheme. When you are nearing the goals like higher education and marriage, you can reduce your allocation towards equity and can increase it towards debt. This account can be useful for this. You can withdraw 50% accumulation after age 18 for her higher education and the balance amount can be withdrawn for her marriage.

Along with an SIP in equity funds, this can be a suitable investment scheme for your daughter.


Smart Money Management for your kids

The more time you give to your children, the better they grow;

The more time you give to your Money, the better they grow.

  • Open a Savings A/c on your child’s name. Guide him how to save money he receives on birthday or any other occasion in his savings account.
  • Make him understand the difference between Saving & Investing.
  • Don’t take your child along with you in ATM to withdraw money as they might mistaken that they will get money whenever required.
  • Make them understand the educational expenses you are paying on monthly or early basis.
  • Ask them to write / maintain the monthly household expenses book.
  • Invite them to hear the financial discussions, they cannot express their views but can logically think on it.
  • Make them understand why the loans has been taken for Home, Car or Education, the breakup of EMI’s, Prinicipal & Interest.
  • Visit an orphanage & donate some with your child through which he will understand the things he uses are not available to them.
  • You have started the Journey of becoming a Smart Investor, its your duty to train your child to become a smart investor by teaching him about financial literacy, products like mutual funds, stocks etc.

Financial Literacy is need of the hour, moreover staying happy in any situation & changing the view towards Money is required.

Happy Children’s Day

#kaustubhdeole, #artharthifinancialservices, #theequitylearners

Money Lessons for your Kid Part – 3

Changing times, social media like facebook, instagram, whatsapp has impression on kids.

Learn how to teach them money lessons.

Money lesson for your kid aged 15-16:

Explain loans & credit reports before the bad habits of his peers get ingrained in him. Ensure he understands the importance of high credit score to eventually get the loans for things he wants, e.g. a house or a car in future. Make him understand how loans work — principal, interest, repayment, good loans Vs bad loans, tax benefits (80C, 80E etc), Insurance cover for loans etc.

Money lesson for your kid aged 17-18:

Give them more leeway in Bank A/c where they can store the money & write cheques. Don’t add money to this account. They should fund it from their savings. Have them write cheques for costs like student activity fees, and sit down with them monthly to balance account. Also, discuss topics like work-life balance, financial freedom etc.

Money is great, but it’s worthless if you’re not leading a balanced life.



Money Lessons for your Kid Part – 2

Why Money Lessons are important for your kid in changing markets.

Money lesson for your kid aged 11:

Keep pointing out advertisements of different brands to your kid. Explain how they try to manipulate consumer’s emotions by making their products look cool through paid advertisements.

Money lesson for your kid aged 12:

While shopping, point out a cheaply-made product & a higher quality alternative, explain the difference (the feel of fabric, brand etc.) and how to choose between the two. If you buy eco-friendly product, explain why you’re willing to spend more on it. She should learn smart purchases rather than just the cheapest.

Money lesson for your kid aged 13:

Get in the habit of clarifying financial concepts. Tell your kid, ‘I invest in Mutual funds, Bonds, Stock Market etc to make money grow’. Show the ups & downs of Nifty (just call it ‘the market’) and explain why people invest in it.

Money lesson for your kid aged 14:

Make your teen work for extra allowance, e.g. chopping vegetables etc. Let her feel the power & freedom of making & spending money. E.g. if she wants a Rs 1200 jacket, explain that she’d have to babysit for 12 hours at Rs 100 per hour to afford it. Convey that she has to work in order to get what she wants.



Money Lessons for your Kid

Money lesson for your kid aged 7:

Talk to your child about career & money. Try to instill positive feelings towards work. Explain what you do at work, why you chose that field and why you like it. Convey that people should try to choose the jobs based on what they enjoy.

Money lesson for your kid aged 8:

Explain that some money that you earn have to be spent on the bills. Let your child sit next to you while you make the payments. Some amounts like rent or EMI — will be too big for her, but you can ask her to match the balances. Focus on Savings too.

Money lesson for your kid aged 9:

Open a Minor Savings A/c. Don’t let him withdraw money at will — if he wants to save for a bike, he should talk to you first. Tell him that he will have to make regular deposits to the bank, monthly or quarterly.

Money lesson for your kid aged 10:

Inform about different kinds of cards & Bank A/Cs. Take your cards out of your wallet and explain which one is for debit, which is for credit, their differences, and the importance of always paying back dues in full & on time.