Sukanya Samriddhi Account with 80C benefits – Special scheme for girl child

POSTED BY manish ON January 29, 2015 COMMENTS (353)

You must have heard about “Beti Bachao Beti Padhao” initiative recently on television advertisements. As part of it, the government has recently announced a scheme called “SUKANYA SAMRIDDHI ACCOUNT”, which is mainly for saving money for the girl child.

This is a welcome move, because a lot of investors will get some extra incentive to save in the name of their girl child once they are born from a long-term perspective. You can see the exact PDF containing all information.

Sukanya Samriddhi Account

Let me share with you all the benefits and features of this scheme in details.

What is Sukanya Samriddhi Account?

Sukanya Samriddhi Account (SSA) is an investment scheme which can be opened for a girl’s child. The scheme is specially designed for girls higher education or marriage needs and should be opened by her parents or legal guardian(in case parents are missing).

One can deposit a maximum of Rs 1,50,000 per financial year (Apr – Mar) and the yearly interest rate in this account is 9.1% compounded on a yearly basis. Note that this interest rate is not fixed and will be notified on a yearly basis or from time to time whenever applicable, very much like PPF.

The best part is that the investment in this account is exempted from income tax under sec 80C.

Amount of Deposit and Frequency

The minimum amount one has to deposit per year is Rs 1,000 and maximum amount is Rs 1,50,000. There is no limit of the number of transactions in a year. When you open the account for the first time, you have to deposit a minimum of Rs 1,000 and above that any multiple of Rs 100 (like Rs 1200 or Rs 1400 , but not Rs 1,450).

You also need to make sure that you do not skip your payments each year, otherwise a penalty of Rs. 50 will be levied for each year of non-contribution. At this point of time, it’s not clear if NRI can invest in these schemes or not. I don’t see any wordings in the official document published by govt. If someone has clarity on that, please share it in comments section.

This account can be opened before the girl attains 10 yr of age. So the moment the girl child is born , you can open this account in her name or wait for some years and open it later, but once the age of 10 is reached, one can’t open a new account for the girl child.

You can deposit the money in the account only for the 14 yr period, from the date of opening, so the best thing is to open the account early itself, so that you get the maximum window of 14 yr to accumulate the money.

You will need following documents to open this Sukanya Samriddhi account. 

  • Birth certificate of girl child
  • Address proof
  • Identity proof

One can open only maximum of 1 account per girl child and in total only 2 accounts can be opened by parents for 2 girls (one for each), but in case the second birth has resulted in twins, then 3 accounts are allowed. You can’t open multiple accounts for the same child like you do in saving bank account.

Where can you open this account?

As per the notification, this account can be opened either in a Post Office or any public sector bank. You will get a passbook under this scheme which will have details of the account holder (daughter name) along with other information like date of opening etc, like it happens in the case of PPF account. Also, the account can be transferred to any city in India later if you wish.

As this has been recently announced, I believe the banks and post office must be in the implementation mode right now and must be training their staff on this.

So if you immediately visit them to open an account, you might face problems as the staff might not be 100% clear of rules. So I suggest to wait for 2-3 months and let the whole thing settle down.

Maturity and Premature Withdrawal

Sukanya Samriddhi Account will get matured after 21 yrs from the date of opening the account or before the marriage of the girl, whichever is earlier. The good part is that if parents want to close the account before 21 year for marriage purpose, they have to give an affidavit that the girl has reached at least 18 yr of age, so that one can’t use it for child marriage (before 18 yr) .

One can also partially withdraw 50% of the balance amount after the girl reaches 18 years of age, for the education purpose and rest has to be left in the account so that it can be used for the marriage purpose.

Sukanya Samriddhi account Rules

Also in the worst case, if there is death of the girl child, the account will have to be closed the money will be paid to the legal heirs (mostly parents). Apart from that, the account can still be closed much before in cases of extreme compassionate grounds such as medical support in life­ threatening diseases. death, etc.

There is no loan facility under this scheme.

How can you deposit the money under this scheme?

You can make the payment by Cash, Cheque or demand draft by going to the post office or the bank where you have opened the account.

Unlike PPF or Saving bank account, you can’t deposit the money online as of now, which will really discourage those investors who are too much into online transactions. However, I am sure this is not a cause of concern for people from smaller cities and villages who are the main target for this scheme.

Tax applicable on the money deposited and earned and maturity amount?

As of now, the taxation status of this scheme is ETE, means money deposited is exempt from tax, interest earned is taxable, but maturity amount is again exempt.

This is exactly how tax-saving fixed deposits work, they also have ETE status. Some people will compare with PPF which is EEE and there is no tax to be paid in any case.

How much corpus you can create by investing in Sukanya Samriddhi Account?

So how much money you can accumulate in this scheme if you try to get the maximum benefit from this scheme. Assuming you open the account the moment you girl child is born, you will have complete 21 yrs in hand, and if you invest the maximum permissible amount Rs.1,50,000 per year for 14 yrs (tenure allowed for investment) .

It can accumulate to approx amount of Rs 72 lacs after 21 yrs tenure. You will have approx 55 lacs, by the time the girl turns 18 years. So in a way this account can be meet your girl’s education and marriage expenses.

You can withdraw 45-50 lacs for education purpose and also have 25-30 lacs for marriage expenses (try to focus more on education expenses rather than marriage).

The below graph gives an approximate idea of how your corpus will grow in this scheme.

Sukanya Samriddhi Scheme Maturity amount
Should you open Sukanya Samriddhi Account for your daughter or not ?

If you look at the features of this scheme, then you will realise that its very much close to PPF features. The lock-in, interest rate, passbook facility, partial withdrawal and taxation status very much mirrors PPF.

So the real question is if this is better than PPF? Or Recurring deposit? In my opinion overall it’s a good initiative by government, its intention is pure and something very much required, but it still does not beat PPF as the product. I personally didn’t find any reason why I would prefer this scheme and not PPF?

However when you look at this scheme, its much better than the traditional child policies and child plans (non-equity) from insurance companies. I would recommend this one over them.

How to open Sukanya Samriddhi Account – Real Experience

Thanks to Dr Dinesh Rohilla for sharing his real life experience of opening the SSA account. I am sharing his exact words and experience below

Quite surprised by the update knowledge of post office staff in a small town like Pataudi regarding this scheme while the commercial banks in the area didn’t have any instructions regarding SSA neither there customer care helpline.

Anyway following is the procedure adapted by me :-

1) Downloaded form from internet along with gazette notification
2) Filled the form and deposit it along with i)Date of Birth Certificate of my daughter, ii) my identity card copy ,iii) Latest electricity bill for residence proof

Note:- I had pasted photo on form on which it is written that photo is optional but at post office they told me to give them two more photos. So be prepared.

3) Please check whether they had correctly written in pass book the name and differentiate who is account holder (girl child) and who is depositor (parent/guardian).

In my case they had written just depositor name ( girl child which is not correct way) and after bringing it to their notice they promptly corrected and said they write this way on all pass books but will be happy to know the correct method.

4) Please deposit original birth certificate .Postal staff told me that there is no need to deposit original certificate and photocopy will be sufficient. Being a Birth and Death registrar earlier I know that wherever required Birth/Death certificate should be original. You can take as many as certificates as you wish from authorities by paying fee .

5) On the day of opening account you cannot do other transaction as per staff but can open account with any amount.

Overall experience was very pleasant and efficient working of staff really make me happy .
Thanks India post.

S.K Morthy also confirms that many people have started opening this account in head post office in Chennai .. See his message below

opening of Sukanya Samriddhi Account

Given the long-term nature of girls education and marriage goal, it’s important to beat the inflation and some part should be invested in equity component too. I would suggest SIP in mutual funds for some amount at least if not full.

For someone who is not willing to take any risk, this scheme is a good choice. Also note that its a good idea to open this account if you are already exhausting your PPF limit and cant invest more on girls child name. Even though you will not be getting tax benefits, but you can still invest more money with help of this account.

Sukanya Samriddhi Scheme vs Other options

Also one good point of this scheme is very much focused on girl’s education and marriage expenses and their future, so mentally it’s easy for investors to relate to it and keep their investment separate.

Below there is a comparison between Sukanya Samriddhi Account and PPF account (SSA vs PPF), along with recurring deposit – because you can open all 3 accounts for long-term and invest on a regular basis like on per-month basis.

Sukanya Samriddhi Scheme comparision

I hope you are the best person to judge if this is better than other alternatives or not.

Please share your thoughts on this initiative and comment back.

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353 replies on this article “Sukanya Samriddhi Account with 80C benefits – Special scheme for girl child”

  1. Vinay says:

    Manish , I have opened two accounts for my two daughters. Let me know that can I deposit 1.5 in each of the account or its is the combined limit .

    1. Its a combined limit

  2. venkat says:

    Hi,

    I have 2 quires.

    1) Can I pay the amount in Mumbai Post office, If I open the Account in Bangalore Post office?
    2) Ho do I get the my money back after my daughter is crossed 21 years ? Will it be cash, Cheque or online ?

    Thanking you.

  3. Dinesh says:

    Hello,

    I want to know that there is any option in this scheme we could see the money. Actually we have only pass book. Pass book does not show with the interest money. Is there any tool which I can see total money with the interest? Please tell me

    1. I have no idea on that !

      1. Dinesh says:

        Thank you Manish!

  4. Sachindeshmukh says:

    Hi, I want to know if we continue paying for 5 years and due to unavoidable circumstances if we could not continue future investment then what will happen to the money which was invested for 5 years.

    1. Thats not an issue .. you will still get the money

  5. Manish says:

    Hi Manish,
    Can NRI parents open SSA for their girl child,
    Please update.

    1. Yes, there is no such flexibility for NRI’s. As per new Sukanya Samriddhi Amendments, if after opening the account your kid become NRI, the account need to be closed within time line given.

      1. Thanks for sharing that SankanyaSamriddhiAccount

  6. Joel says:

    Hi Manish,

    Please update the following information .

    This scheme has been classified as EEE . That is from Tax Exemption point of view :

    Investment in Sukanya Samriddhi Yojana scheme is exempted from Income Tax under section 80C. The scheme offers Tax Benefit under TripleE regimen ie. Principal, interest and outflow all are tax exempted

    1. Thanks for the update, will do that !

  7. Amd says:

    Hi Manish,

    Thanks for the detailed article.

    My daughter is a OCI card holder and is US citizen. In some of the comments I saw that if daughter is US citizen then she cannot have SSA account. I was able to open her SSA account with her US birth certificate. Also, in the gazette notification I do not see any requirements for citizenship. Can you please clarify?

    1. May be the rule was changed later.

    2. sunny says:

      Hi ! which bank did you open the SSA a/c ?

  8. shashikumar k naidu says:

    Suppose I inves t 15000 per year and unfortunetly I died what happen for my paid money
    Pose tell me fact

    1. YOur nominee will get it

  9. shashikumar k naidu says:

    I have a 2years daughter I feel this scheme free my 80 % stress about my daughter’s future fulfill

    1. Glad to know that shashikumar k naidu ..

  10. Ashwin says:

    Is the scheme still operative can i invest now.

    1. Yes, its still operational , you can invest in that

  11. Sagar says:

    Dear Sir,
    I have already invested 1.50 Lakhs in PPF for this financial year.Can I invest further in Sukanya Samruddhi and get further tax benefit.
    Kindly confirm weather one can invest in both schemes 1.5 Lakhs each?

    1. You wont get extra tax benefit, however you can put the money if you want

  12. Iqbal says:

    Hi Manish,

    I am planning to invest Rs, 18000/year to my kid in sukanya scheme. Can I do mode of payment in yearly. Can you please confirm me yearly is possible in sukanya schemr?

    Thanks

    1. I dont think its possible

  13. spguptahyd says:

    My grand daughter is born in US.Parents are now living in India and are indians.Post office says her birth certificate from US is not acceptable . Is PIO card not sufficient to open SSY a/c .Please clarify to mail Id ‘spguptahyd@yahoo.com

    1. Hi spguptahyd

      I suggest that you now take the RTI route. You can file the RTI and ask your queries to them. THey are bound to reply you on your queries.

      Its a bit long cut, but works well

      Manish

  14. Bijananda says:

    Hi Manish,
    I have a doubt regarding SSA. Both my wife and I are working, and I’ve opened an SSA account in our daughter’s name in SBI bank, with me as the operator. Now, my wife wants to know
    1. if she can also deposit money in the SSA account (online transfer is possible)
    2. if so, whether she’ll be able to claim tax benefit for her share of deposit.
    Tried searching the net for the answers but not successful. Will be really grateful if you could clarify.
    Thanks.

    1. 1. She can do it, but only offline

      2. Yes

  15. suma says:

    Hi Sir,

    Thanks for nice article…….

    My husband are paying the amount to sukanya samriddhi yojana……….. Can I get the tax benefit ?

    Thanks & Regards
    Suma

  16. Narsing says:

    Hi,

    In PPF to earn better interest, it’s advisable to deposit amount on/before 5th of every month. Is there any such best practice to follow for SSA account?

    Thanks,
    ..Narsing

    1. No , I think that would be an over kill .. The final amount will not matter too much even if you apply too much of optimization

  17. Jaykumar says:

    Hi Manishji,
    1) Can we invest twice in a year instead of in one time lump sum or every monthly for e.g 75,000/- Now in Oct’15 as 1st Installment and next installment of 75000 in Apr’16?

    So Total Investment for 1 Year comes out to be 1,50,000.

    2) If allowed then in this case will Maturity Amount at 21st Year will be Less than what paid in Lump sum or same?

    Regards,
    Jaykumar

    1. I dont think it allows half yearly payments

  18. vijay says:

    What is better invest for girl child SIP or sukanya smiridhi yojana?

    1. SIP would be a better choice !

  19. Bhargav says:

    Dear Sir,
    Rather than being generic, I will put the question straightforward.
    I am trying to meet PPF amount investment to the fullest possible every year (ie 1,50,000) and that is the only pure debt investment I currently rely on, but unable to do so due to shortage of funds because of diversification of investments across debt , insurance and equity/oriented funds. But then I am content if not happy with current diversification and portfolio. Now the confusion is whether should I split my planned yearly contribution to PPF and SSA from now onwards.
    Now 2 questions:
    1) Dont you think (esp for an educated and (hopefully) organized investor like me,) increasing amount of debt in single compounding fund (say PPF) fetches more than splitting it it to 2 debt funds? Wont I lose the base amount on which compounding happens, if I split. ( I am not concerned about 14 yrs withdrawal option, maturity period etc features)
    2) Only thing I think SSA needs to be considered by me is that the govt may in future declare more interest rate for SSA than PPF….. and at later point of time I should not repend why I had not invested in SSA earlier… Isnt it? (This is also confusing existing planned investors. These kind of things should be addressed too actually when government declares them. )

    Thank you
    Bhargav

    1. praveen s says:

      Dear Bhargav, you have hit the bullseye. I had exact same question.
      Question 1: Compounding. I really believe its better to continue with PPF to get max benefit of compounding rather than splitting it.

      Manish, Nandish look forward for your valuable inputs here.
      Question2 again very good perspective. You never can predict GOI steps. But I am thinking I will just invest 1 lakh to begin with and subsequent years keep it few thousands

    2. Please ask your query in one one lines.

      1. Bhargav83 says:

        Dear Sir,
        Question 1: I am currently investing around 40000 yearly in PPF and that is the only debt instrument that I invest in. Now sukanya samridhi scheme came which is very similar. Do you suggest splitting my yearly debt investment (say 20K each) between PPF and Sukanya samridhi ( I have an year old daughter). Reason for my asking is splitting reduces overall returns on these fixed return instruments, right?

        1. No , dont complicate it. Just keep continuing in PPF

  20. santosh says:

    0

    down vote

    favorite

    I am living in Saudi Arabia from 25 Jan 2008 to till date. My salary is 110000 rupees per month. I have some friend they are working 600 km from city. They tell to me send money for them also. In this case more than 15 lakh rupees send by me. Will there be any problem for me in future. Just give me your opinion.

    1. What kind of problem are you expecting ?

  21. Anil says:

    Interest earned on Sukanya Samriddhi Scheme is taxable but it also says there is tax benefit on the maturity amount. Does this mean once the amount is withdrawn after the maturity period , the interest earned also will not be taxable .

    Can you pls clarify . Thank you.

    1. As per announcement in budget, the interest is NOT TAXABLE

  22. shravan says:

    I see a disconnect here. SSA has “Tax benefits on interest earned” — TAXABLE where as PPF exempts the tax on it. I hope this is not a typo or something. If it is correct, then I don’t see why one should go for SSA over PPF. Please clarify.

    1. Hi Shravan

      Now interest part in SSA is tax exempt !

  23. AMIT says:

    CAN I GET BENEFIT OF TAX ON HUF FILE. IF I INVEST IN SUKANYA SAMRIDDHI YOJNA.

    Regards
    Amit

    1. I dont think so , only parents are allowed deduction

  24. Rachit says:

    Hi Manish,

    I’ve a query regarding deposit in Sukanya Saving Scheme.

    Can we deposit the 1.5 Lacs at the end of financial year perhaps (20th – 31st March) to avail full year interest?

    E.g. we are in 2015-16 FY now, which option will give most of the return:

    1. Deposit 1.5 Lac right away

    2. Keep 1.5 Lac in Saving account (fixed deposit to earn interest), redeem it before 20th March’15 and then deposit it in sukanya account.

    Will they pay full year interest in any of the above written situations.

    Thanks,
    Rachit

    1. No , you will get interest only for the number of months you will have money deposited !

  25. Subramanian says:

    We are Indian citizens who have moved back from the USA. Our daughter is 4 years old and is a US citizen but has a valid PIO (person of Indian orgin) card. Is she eligible for this Sukanya Samruddhi scheme? The post-office were not sure about this.

  26. santosh kumar says:

    sir,

    One doubt to me my daughter born in my native place . but i am living in lucknow last four year,can open account in SSY scheme in lucknow. So pl. suggested.

    Regards
    Santosh

    1. Yes you can do that .. If you have access to documents needed . you can do it !

  27. Anand Prabhu says:

    Hi Manish,

    Thanks for the inputs on SSA. A quick question. In the same financial year, can my wife and I invest 75,000 each for our only daughter’s SSA account and claim exemptions under 80c individually?

    1. Hi Anand Prabhu

      Yes you can do that

      1. Anand Prabhu says:

        Thank you Manish.

  28. Sarita says:

    hi,
    My daughter is born in 2005.is she eligible for this scheme.

    Regards
    Sarita

    1. Yes, for the first year only . For girls who have completed 10 yrs just now are also eligible !

  29. Amit says:

    Hi,
    Thanks for the nice article. I’ve a couple of questions if you can please clarify.
    1. The restriction of deposit till 14 years: The completion of 14 years is calculated based on date of opening the account OR the age of the girl child?
    2. Maturity after 21 years: On the same line as Q1 above, the completion of 21 years is calculated based on the date of opening the account OR the age of the girl child?
    3. Partial Withdraw :I assume 50% can be withdrawn after the girl attains 18 years of marriage.
    4. If the girl marriage happens before 21 years of maturity, will the account be closed automatically and the proceeds will be given to the girl child? Can the money be withdrawn just before the marriage to manage the marriage cost.
    Thanks for your input on the above.
    Regards
    Amit

    1. 1. Date of opening
      2. After opening the account or when girl marries, which ever is earliar
      3. yes
      4. You can then close the account on declaration that the marriage is happening and account will be closed and proceeds will be given

      Manish

      1. Amit says:

        Thanks Manish for the crisp reply. it’s quite helpful.

  30. Sudhir says:

    Hi Manish, I went to the PO yesterday to open an SSY account in the name of my daughter. To my surprise, the person at the PO said that I had already exhausted my limit of 150000 on my PPF for this year and cannot put in any money to the SSY. I told him specifically that these two are two independent investments and each has a cap of 150000. But he would not listen. Am thinking of opening the SSY in a PSB as this will provide me with the option of online investment. Just thought of highlighting the ignorance of the people who are supposed to guide investors.

    1. they might be telling you that because the tax benefit limit is only for 1.5 lacs. You could have told him that you are not looking for tax benefit .

  31. Ravi says:

    Hi Manish,

    Could you please help me to highlight this point..
    – Will the investor loose the interest amount if he deposits the money in different intervals , for example FY (15-16) –
    Apr – 20000/- ; June 50000- ; Oct 80000/-

    1. No you wont loose any interst

  32. yogesh says:

    Hi Manish,
    If some NRI opens the SSY then is it possible for post office or bank to trace it ?I think they will be least bother about that.What can be possible impact at maturity time?

    1. yogesh says:

      Hi manish/All

      pls comment on my query

  33. yogesh says:

    Hi Manish,

    Scheme is under EEE .

    http://taxguru.in/income-tax/sukanya-samriddhi-account-tax-benefits.html.

    If kid is 10yrs old and we need to invest for 14yrs then maturity in this case will be after 21yrs of age rite?
    We need to remain invested for 14yrs right ?

    1. Hi yogesh

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  34. Anshudeep says:

    Hi Manish,
    There are couple of points that should be changed.
    1- Accrued interest is not taxable any more. So SSY is EEE too.
    2- Interest rate is 9.2% now (2015-2016).
    3- In the difference you can add PPF offers 25 basis points higher than the bond yield where as SSY 75 basis points. So interest rate of SSY will always be a li’l higher than the PPF ( almost 0.5%)

    1. I guess I have changed it

  35. Shiva says:

    As always…. nice article Manish… Thanks for your time in consolidating & sharing it at right time…. 🙂

    1. Thanks for your comment Shiva

  36. Kalyani says:

    I might be asking relatives or friends to do so on my behalf. I think anybody can deposit the amount? Is it correct?

  37. kalyani says:

    Query:
    What happen if parents and the daughter become NRI after opening the account and invested 1.5lakhs already on it when their status was resident?

    Thanks
    Kalyani

    1. In that case, you can continue it. But how will you deposit the amount each year ?

  38. uma says:

    I paid Rs.10000 against this sukanya samriddhi account on March 30th. When I tried to give this as tax exemption in my office they say it can’t be claimed under 2014-15 and it’s valid from 2015-2016 only. Please clarify

    1. Hi uma

      I am not very sure on this. Will find it out !

      Manish

  39. Sarang says:

    Manish,
    While the lock-in period of SSA is much higher as compared to PPF, there is another perspective to look at. SSA is a populist scheme and will involve only a certain sector of Indian citizens ( parents with daughter/s less than 10 years old). PPF has far bigger investor circle. So when the time comes for revising the interest rates, the govt will benefit more by reducing the interest rate of PPF rather than SSA. Second, as this is a populist scheme, I don’t see change in govts making any diff to SSA policies/rates. No party will be inclined to touch this sensitive area. As of today, SSA interest rate is 9.2% where as PPF is 8.7%. SSA is also EEE now i.e. interest earned is tax exempted as well. I see a fair point in investing in SSA and not just in PPF.

    1. Hey Sarang

      Thanks for sharing your experience with all of us. It was a great learning.

      Manish

  40. Deson Sachdeva says:

    Hello Sir,
    I want to know that can both parents contribute money to single girl child for eg if one lakh has to be deposited, 50000 from each , do they both claim for tax exemption

    1. Yes, that should be possible !

  41. sunil says:

    The Gazette notification ( the PDF doc ) does not mention any taxable on interest part ? @Chauhan Could you please point the right document on the tax part.
    If there is tax applicable on interest earned, then I wont go for it, rather I would go for PPF in the name of everyone of family members. However, if you left with more corpus and still want to invest more in safe deposits, then think about this plan.

    – Sunil

    1. Hi Sunil

      I am not sure if the gazzete document has come or not . But I think you should not doubt it because in budget speech itself it was clearly mentioned by finance minister. The PDF might take some time to arraive !

      Manish

  42. Mukul Sabharwal says:

    Hi Manish,

    I have two queries:-

    ie. Money Deposited from Father’s HUF will be eligible for 80 c deductions ?
    and
    Some other articles over internet, like the one below, are suggesting that the entire maturity value and the interest earned under this, is tax-free ?
    http://profit.ndtv.com/budget/sukanya-samriddhi-scheme-10-key-highlights-744148

    Kindly help & suggest above.

    Kind Regards

    Mukul

    1. With recent changes, its cleared that there is no income tax on maturity

  43. maharudra says:

    My daughter
    born on 7/4/1994 and studying in 3rd year BDS. Whether i can open acount in her name.

    1. No , its only for daughter below 10 yrs age

  44. M. Anirudh says:

    Hi Manish – It’s really a well drafted and eye opener to many of us to understand the pros and cons of the scheme. I have few questions related to the Interest calculation on this scheme as well as PPF.
    Ideally we have to deposit the amount of contribution before 5th of every month for the interest to be calculated by End of the month – If the frequency is monthly right!

    If it is yearly then how the interest part is calculted
    I depoisted 1000 on April 4 by opening of the account and later if by the end of the year say in 10 Jan’16 if i deposit 120000 and then on march 25th i deposit the remaining amount to make it 150000 i.e; 29000- if you could let me know the following
    1. Is the interest is calculate on a monthly basis on a certain date or at the end of the year.
    2. will the investor won’t loose the interest amount if he deposits the money in different intervals like above

    Thanks for your help on this in advance…nice work………..!

    1. 1. Yes , like the PPF I guess

      2. No

  45. jagdeep says:

    Hi,

    Per finance bill 2015-2016- comparison chart needs to be updated as now this scheme is EEE.

    “Investments in Sukanya Samriddhi Scheme is already eligible for deduction under Section 80C. All payments to the beneficiaries including interest payment on deposit will also be fully exempt”

    Please update.

    thanks,
    Jagdeep.

  46. Ajay Kumar Yadav says:

    Dear Sir
    Account open only Post office bank account wrong
    Regards
    Ajay Yadav

    1. So what is the question ?

  47. Rajeev says:

    Manish ji
    Can you kindly simplify what the following clause mean. Is the interest taxable for this FY 2014-15. Is it recommended to open account next year

    Clause 7 of the Bill seeks to amend section 10 of the Incometax Act relating to incomes not included in total income.
    It is proposed to amend the aforesaid section by inserting a new clause (11A) so as to provide that any payment from an account opened in accordance with the Sukanya Samriddhi Account Rules, 2014 made under the Government Savings Bank Act, 1873, shall not be included in the total income of the assessee.
    These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent assessment years.

    1. Rajeev

      Thats beyond my understanding truly speaking .

  48. Atanu says:

    Can someone please share the – website “link/URL” from where the relevant form can be downloaded along with gazattet notification

  49. DHABAL SATAPATHY says:

    Dear Sir,
    I feel instead of SUKANYA SAMRIDDHI YOJNA it must be SANTAN SAMRIDDHI YOJNA which doesn’t differentiate between girls & boys.
    If govt is so much serious then it must reserve & exempt some percentage of fees for higher studies.

    1. Hi DHABAL SATAPATHY

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  50. Aravinda Baliga says:

    I had been to Sri Chowdeshwari Post Office Bengaluru last week. Being one woman P.O with lots of queries on the SSA A/C. It was quiet surprising to see the lady part time helper in the office giving full information on the scheme along with details of KYC requirements, interest details parents details etc. She also was telling about the convenience of Core Banking which is to be implemented shortly. Kudos to the Postal Dept.

    1. Welcome .. Glad to know that Aravinda Baliga ..

  51. Nisha Sahaay says:

    One more question Sir. What us meant by interest is taxable and maturity amount in not taxable in Sukanya Samriddhi Account ???

    1. Now everything is non taxable !

  52. Nisha Sahaay says:

    Thank you so much Sir for giving complete information to us. I have one question related to deposit scheme. How many deposits I can made in one year in Sukanya Samriddhi Account ???

  53. RAMAN THAKUR says:

    To open an account for the girl child(Age 01 Days- 10 Years) is very easy and also the tax free investment . Just dont approach to the bank , because the proper guideline is yet to receive at any bank. But can be easily opened in any Post office with the simple process. Produce 2 photographs of the girl child and any one of residential proof of parents(which is easily available to every one in India. Thanks to AADhaar) . Also the Birth certificate is required for the proper age proof of the children. Up to 150000 Rs /Year can be invested for the one girl child.

    Thanks….

    1. Hi RAMAN THAKUR

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  54. Praveenkumar E says:

    Hi Manish,
    Great article. I request you to consider updating the PPF – SSY comparison table to include EEE instead of ETE as it is now. Otherwise to get the updated info one has to traverse thru the entire comments section.
    Thank you.

    Regards,
    Praveen

  55. Anand Chauhan says:

    Hi Manish,

    I would like to know, if i can open SSA account for my daughter. She is USA born. 3 yrs old. she is currently in india on PIO card.

    Thanks,
    Anand

    1. No Anand

      Its only for Residents !

  56. Vijay Sharma says:

    Hi, can somebody tell me what’s the definition of the maturity amount?
    The table above says that for a FD interest is tax exempt while maturity amount is taxed. Does that mean that if I invested Rs 100 in a FD and got Rs 105 on maturity out of which Rs 5 is interest. Then apart from Rs 5 being taxable , Rs 100 is also taxable?

  57. BIJAY GUPTA says:

    सुकन्या समृद्धि अकाउंट खोलने की कोई भी गाइड लाइन आज तक १९/०३/२०१५ नहीं है न आज की तारिक मै कोई भी बैंक मै खता खुला है

    1. I have added few experiences in the article . Please go through them

  58. I have Opened the Sukanya Samriddhi Account for my 6yr young. In the place of Depositor name, they have mentioned my daughter’s name and “in the brackets (through Mother and My Name”

    I have submitted daughter’s DOB photocopy, my ID & address proof and my 2 photos. And, the postal staff told me that Rs 1000 is minimum amount (mandatory) to open this account. I am NOT sure whether this is a rule. But, I feel this minimum Rs 1000 may discourage lower income people from opening the account.

    1. Rs 1000 is the minimum you need to open the account

  59. manish says:

    tax benefit on earn interest- I mean need to pay the tax on earn interest or not?

  60. Dr Dinesh Rohilla says:

    Experience of Opening SSA

    Quite surprised by the update knowledge of post office staff in a small town like Pataudi regarding this scheme while the commercial banks in the area didn’t have any instructions regarding SSA neither there customer care helpline.
    Anyway following is the procedure adapted by me :-
    1) Downloaded form from internet along with gazette notification
    2) Filled the form and deposit it along with i)Date of Birth Certificate of my daughter, ii) my identity card copy ,iii) Latest electricity bill for residence proof

    Note:- I had pasted photo on form on which it is written that photo is optional but at post office they told me to give them two more photos. So be prepared.

    3) Please check whether they had correctly written in pass book the name and differentiate who is account holder (girl child) and who is depositor (parent/guardian).
    In my case they had written just depositor name ( girl child which is not correct way) and after bringing it to their notice they promptly corrected and said they write this way on all pass books but will be happy to know the correct method.

    4) Please deposit original birth certificate .Postal staff told me that there is no need to deposit original certificate and photocopy will be sufficient. Being a Birth and Death registrar earlier I know that wherever required Birth/Death certificate should be original.You can take as many as certificates as you wish from authorities by paying fee .

    5) On the day of opening account you cannot do other transaction as per staff but can open account with any amount.

    Overall experience was very pleasant and efficient working of staff really make me happy .
    Thanks India post.

    1. Hi Dr Dinesh Rohilla

      Thanks a lot for sharing this amazing information. Many people were looking for it . I have included this experience of yours in the main article

      Manish

      1. Dr Dinesh Rohilla says:

        Thanks to you too Manish.This is first investment in my life which I had done after thoroughly understanding the financial implications both long term and short term;the knowledge of which I had after going through all 3 books published by you. I wish I had read that book when I had started earning.!!!

        1. Welcome .. Glad to know that Dr Dinesh Rohilla ..

  61. spguptahyd says:

    Very good article. Can we open SSY a/c for girl child born in US for Indian parents of Indian citizens? This scheme can be made ver attractive and better than PPF
    by making EEE class instead of ETE. Govt may consider on popular demand.

    1. Its already EEE now !

  62. Poornima says:

    Can SSA can be opened in the name of the girl child who is an NRI?

    1. Hi Poornima

      There is no clarity on that at the moment

      Manish

  63. Elizabeth says:

    Hi manish,
    I have 2 daughters, one is 2 years and the other is 2 months. My question is if i open one account for each of my daughter, can I invest 1.5 lacs in each account(total 3 lacs) or is there a limit that both accounts can have only maximum of 1.5 lacs per financial year?

    .

    1. You can invest 1.5 lacs into each ! , but you will be able to claim tax benefits only upto 1.5 lacs in total

  64. varalakshmi says:

    it is useful for NRI GIRL Who was born in America for Indian Parents?

    1. I dont think so . AS of now the guidelines does not mention anything about NRI

      1. varalakshmi says:

        Thank You Manish

  65. gopal says:

    Sr SUKANYA SAMRIDHI ACCOUNT ARMY POST OFFICE (APO) mei bhi bhar sakte hain kya? Plz sr i am army person clarify me.

    1. If the post office allows, then I think you can

  66. Vikash Rana says:

    Friends, don’t take it as inferior step of Govt or inequality issue between boys and girls..And pls don’t take it in terms of Tax exemption only. It is great initiative for encouraging girls child because most of parents always worry about girls future, education and marriage..This scheme can relief the parents upto a great extent…small routine saving of parent can brighten the future of our Laadli…Thanks for indian Govt..

    1. Hi Vikash Rana

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  67. Manoj says:

    Very nice article and great initiative by Indian Government for Girl child.

    1. Hi Manoj

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  68. Rajeev says:

    Sam Mehta ji and Manish ji
    Pl post here if any information as to any Bank or post office opening this account.

  69. Sam Mehta says:

    Does anyone know if ANY public sector bank or Post office where these accounts are actually opening? I checked in Noida at PNB, SBI, Union Bank, Bank of India and one more…none of them have any instructions to open it. The Ministry of Finance website does not mention which branches of scheduled commercial banks have been allowed to open these accounts.

    Now that this is EEE scheme, there is a lot of interest and the financial year ends in a few days.

    If you can share any branch in New Delhi or Noida that is opening these accounts, it will be helpful

    Regards

    1. Hi Sam Mehta

      I am not sure of the exact branch where it can be opened .

  70. Rahul Amaram says:

    Quick question. I have already invested upto 1.5 L under 80C. Now if I invest further 1.5L under this scheme, then obviously I will not get any additional tax benefit on my income. But what about tax on interest earned and maturity amount? Will those be taxable?

    1. Mahesh says:

      So you do not get additional benefit since you have exhausted 1.5 L under 80C. However the rest of the two “EE” would still be applicable which is exemption from Interest earned and Exemption on Maturity. That is what I could interpret from what was said on 28th.

    2. No tax on interest and maturity in Sukanya Samriddhi scheme

  71. Sharad Madan says:

    Another addition to scheme in budget speech I heard few hours back!!! Interest earned will be now tax free (just like ppf). Big boost to the sheme now.

    1. Mahesh says:

      Seems like this is EEE now. Might get some special treatment in terms of interest rates for next couple of years I guess.

      1. Hi Mahesh

        Yea, now its EEE 🙂

    2. Hi Sharad Madan

      Yea , that was annouced !

  72. Srinivas Rao says:

    Dear Sir/Madam,

    I am working in Lao PDR country since 2008 with a yearly basis work visa and have an NRE account in India.

    For saving some tax burden may i know which scheme i can take?

    Thanks in advance for your kind reply.

    Regards

    1. Hi Srinivas Rao

      You can start a SIP in ELSS funds. Or take a 5 yr Tax saving FD !

  73. rajendra jangid says:

    which is good plan for child

  74. Sri says:

    I have enquired about this account in SBI , they said they did not get any instructions from Govt and their Management till now to open this account

    SBI is a big Govt Orgnaisation who should not tell like this.

    Does any one opened this in any other Govt Banks in India.

    1. Hi Sri

      Its still not notified to all state banks . Wait for couple of months before you apply !

  75. datta says:

    It is Good for Low income people they can at least save some money for Girl Future. indirectly it is Long run Saving. And saving is good habit.

    1. Hi datta

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  76. Shravani says:

    Hi Manish

    1 Query on SSA Scheme

    Can Mother / Father open separate a/c of SSA for their daughter

    1. Are you saying mother opens account for daughter and father also opens the account for same daugther.

      Then the answer is NO , one account for one person !

  77. Dipankar Das says:

    sir
    date of maturity wheather 21 years from the date of opening or the child attained 21 years Pl. let me know on my given e mail address

    1. 21 yrs from the date of opening !

  78. Rajeev says:

    Rajiv ji
    You have overlooked tax factor.Even if one fall in 10% bracket return is less than PPF.

  79. Rajiv says:

    Dear Manish,

    I need to clear myself here.

    Suppose if I put Rs. 1000 per month in PPF and Rs. 1000 in SSA, what will be the returns?

    As per my understanding below is the approximate calculation for PPF and SSA account—–

    For PPF account –
    Rs. 1000 per month , i.e. Rs. 12,000 per years
    At 16th year —
    total investment in 15 years tenure will be Rs. 1,80,000
    Returns on investment will be Rs. 3,74,073 (with assumed interest rate of 8.7%)
    At 21st year —
    total investment in 20 years tenure will be Rs. 2,40,000
    Returns on investment will be Rs. 6,45,280 (with assumed interest rate of 8.7%)

    For SSA account :
    Rs. 1000 per month , i.e. Rs. 12,000 per years
    At 21st year —
    total investment in 21 years tenure will be Rs. 1,68,000 (we need to pay for only 14 years)
    Returns on investment will be Rs. 5,95,551 (with assumed interest rate of 8.7%)
    Returns on investment will be Rs. 6,31,261 (with assumed interest rate of 9.1%)

    based on upon it is giving good returns upon less investment.

    1. You have not considered taxation here . PPF will beat SSA

  80. Aditya says:

    Thanks sharing this infomation Manish

  81. Rajeev says:

    Manish ji
    Whether this scheme has any advantage over PPF or Long term FDR except little excess rate of interest.
    Under this scheme
    Interest is taxable and tax will be paid every year by one of the parent due to clubbing.
    80c is already loaded with options and is also available in PPF and long term FDR.
    When we have already paid tax on principal/investment (it is not income but investment from tax paid income) and interest (accrual basis every year) then what is the meanig of exempt on receipt when all tax is already paid.
    Pl guide why one should invest in this scheme.

    1. Hi Rajeev

      The scheme is not better than PPF

  82. Bhushan says:

    I thing this scheme will work only in rural area & intest point of view it will be work

    1. Hi Bhushan

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  83. rahulavyas@gmail.com says:

    Hello,

    I tried asking to many banks about this scheme but they seemed to be unaware of this. will take the print out of the Gazette to them and lets see how they react

    1. Hi Rahul

      Its a new scheme and not launched in every state as of now . Wait for some months before you apply for it !

      Manish

  84. Ramesh says:

    A very good initiative by the government to actually encourage parents to bring up and raise girl-child (and not abandon or shun them when they are born).

    As a proud father of girl-children i find this scheme both good and “incomplete”.

    As someone else pointed out, this is a kind of incentive of luring-with-carrot. This is only fixing the symptoms, but not the root cause ( culture and mind-set take a lot of time to change – No amount of carrots are going to fix this problem. The solution should start from each individual families).

    I am now afraid that this scheme can also be potentially misused (especially due to the “lenient” clauses under which a premature withdrawal or closure is allowed)..i would not want to list in any situations..but will leave it to the reader’s imagination on how this could be misused.

    -Ramesh

    1. Hi Ramesh

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  85. Kashi says:

    Hello Manish,
    Thanks for info, I have one doubt here, who can claim 80C mother or father of the Kid or both ?

    1. The parent who has become the guardian will get the benefits !

  86. manoj nair says:

    The point worth mentioning here is that you can open a PPF Account only once .
    so if zou want to avoid opening a PPF account for zour child then this scheme is a great idea because your child might want to open a PPF account later as a savings instrument.

  87. Saket says:

    Thank you Manish for such a great article.

    I heard regarding swavalamban pention yojana. I asked SBI regarding the scheme but they said they don’t have any idea. Could you please share details on the same in one of your blog?

    1. Its not launched at each and every state . Wait for some months !

  88. Mohan says:

    Good initiative by government but i think PPF is still better than SSA.
    PPF:
    More transparency than SSA.
    Online facilities.
    Interest earned is tax free.
    but little less interest rate than SSA.

  89. Satish says:

    Hi Manish,

    This is a excellent artcile. Have below queries?
    1. If SSA is similar to tax saving FD, then which benefit makes SSA different from FD?
    2. If father is in 30% income tax bracket and mother is in 10% or tax exempt bracket, then I assume that mother can be guradian of girl and avoid tax on interest. is this possible.
    Thanks

    1. Satish

      1. Its more closer to PPF and not tax saving FD . SSA maturity amount is not taxable like tax saving FD !
      2. Yes its possible, but only when she contributes her own money. If she takes money from father and then deposited, then clubbing of income still applies and father has pay the tax !

  90. Sandip Sabnis says:

    Thanks for useful info.
    SSA has bit more interest rate than PPF. Wouldn’t it affect in long term?
    I assume Gov. [at least Modi in this term] will keep SSA’s interest rate bit more to attract more people.

    I would like to share this info [along with link obviously] with friends. Please allow.

    1. SSA has interest more, but then its taxable which makes it less after calculating tax ! . So in long run, its not a better option

      Manish

      1. Sandip Sabnis says:

        Thanks Manish..!

  91. ddm says:

    Hi,
    I have my own PPF account and I know I can deposit maximum of 1.5 lakh per year in it. My daughter is 2 years old and wife is house wife. My question is can i deposit 1.5 lakh in my account and another 1.5 lakh in daughter’s PPF account and one another 1.5 lakh in wife’s PPF account ?

    1. Jay Sheth says:

      No, by the law, you cannot (though there have been folks who have done that and have not been caught). I can invest a total of 1.5L including my own and my dependent childrens’ PPF accounts. The total should not exceed 1.5L. It is ok to invest separate 1.5L for spouse, but not children.

      1. ddm says:

        Thank you @Jay Sheth,
        So if this is the law then as per my understanding “Sukanya Samriddhi Account” is advantage over daughter’s PPF account to those peoples who are already investing 1.5 lakh in own and 1.5lakh for spouse’s PPF account and still they have extra money with them then they can open Sukanya Samriddhi Account instead of opening daughter’s PPF account.

      1. ddm says:

        Thanks Manish,
        I got my all answers. This means there is no any benefit to open so many accounts on family members name if (max limit to invest in all accounts) is equal to (max limit to invest in one’s account) i.e say 1.5 lakh for now.

        1. yes, incase of PPF !

        2. Jay Sheth says:

          @ddm, yes, you can invest 1.5L for you in PPF and an additional 1.5L for your spouse. You cannot invest on behalf of your minor children beyond this. So if you have 4.5L to invest, yes, you can go for PPF for yourself, PPF for your spouse, and Sukanya Samridhhi Account for your daughter. Until we get clarity (further concession) on tax treatment, PPF would be anytime superior to Sukanya Samridhhi Account, being an instrument under EEE category.

  92. goiGohil Bharat says:

    Hi Manish,
    very nice article. in my opinion SIP/ ELSS is best in long run. Am I right ?
    regards.
    Bharat gohil

    1. Correct ! .. most of the times !

  93. Rahul says:

    Hi Manish
    Thanks for the insight..was wondering if you could attach an excel on the cumulative amount of 72 lacs ..

    1. I didnt get it ? You mean you want the excel sheet which I used to calculate ?

  94. samvu says:

    Great Effort Manish 😉

    Presumed deposit in this a/c is by persons other than father / mother.

    So 80 (c ) benefit shall be enjoyed by depositor

    Querry

    1. will deposit in this a/c will be deemed income of father or mother?
    2. will interest paid by bank form part of income of father or mother as their deemed income.

    1. 1. No , its the deposit .. I mean when you invest in PPF , you invest out of your income only right ?

      2. Yes, it will be part of their income , above Rs 1500 per child !

  95. JS says:

    I liked the way content is presented with details and especially chart views. Excellent.

    I believe it would have been nice to get links for saving schemes better then presented below.. I mean you compared three that itself is good.. but may be more detailed would have been better.

    1. Which other point you need in comparision ?

  96. saurav says:

    but you have made and assumption of 9.1% every yr.

    and that’s not true

    1. Correct . Its just assumption . And its mentioned clearly that its assumption . It just gives an rough estimate and its not reality .

  97. Rajeev says:

    Tax has to be paid from your other income every year. Then what is the meaning of exemption on maturity. Except that rate of interest declared is slightly higher, in my opinion this has no edge over PPF if you have taxable income. Since we have so many options for 80C investing in this will only be attractive if interest is exempted from taxation or clubbing provisions.

    1. Thanks for sharing your opinion on this point !

      1. chethan says:

        make sense Thank you!

  98. chethan says:

    Hi

    First of all I thank you for sharing such a useful information in detail.
    As per the information mentioned above “one account per child”.
    But is there any way to open two separate account by both the parents(father and mother) separately?
    And how both parents(father and mother) can get tax benefit?

    1. NO , One child should have just one account on her name, opened by any parent.

      1. chethan says:

        Thank you!

  99. Anuj says:

    wanted to know about ELSS i mean its EEE or ETE

    1. mahesh says:

      ELSS IS EEE UP TO LIMIT OF RS. 150000/- PER YEAR UNDER SECTION 80C OF I,T. IT HAVE LOCK-IN OF 3 YEARS.

    2. Its EEE if the investment tenure is more than 1 yr

  100. Apurva says:

    Hi,
    I tried reaching out to SBI and post office last week but the staff was not even aware about the scheme. Do you have any update / information on which all areas are covered or if any bank has started offering the scheme.

    Regards,

    1. Apurva

      This is launched right now from only some districts . Wait for some time and let it get implemented all over India

  101. Renga says:

    I am just thinking why Govt is not doing the same for male child too?? It will be a good investment for male baby too and they can use the money after 21 as by the time they would have finished their education so may can use the money for starting the business etc…

    1. Anjan says:

      Because the government thinks male babies are no longer important. Most of the laws in India are biased against males as it is, so schemes like this are only a logical follow up to tilt the scales even further. It’s all vote bank politics.

  102. Sitaram Taparia says:

    Thanks Manish. Very good article.

    1. 80C is too crowded with too many options. I think Govt need to give additional deduction – else, there is no charm.

    2. For RD a/c, why you said it is TTT. To my mind, maturity (Principal) is not taxable as interest would be taxed in respective years. Pls correct me, if I am wrong.

    1. 1. Yes- Lets see it 80C limit is revised this year or not ?

      2. Thats not true. the interest part is taxable in respective years, but still when it matures , if you get money more than your principle , then rest is your income and income tax is to be paid. Let me find more on this and make an article.

      Manish

      1. mahesh says:

        RD A/C IS TTE. INTREST IS CREDITED IN OUR A/C ON QUARTERLY BASIS. THE INTREST IS TAXABLE YEAR TO YEAR. BUT ON MATURITY IT BECAME TAX-FREE,BECAUSE U HAD ALREADY PAID TAXES ON INTREST EARNED IN PREVIOUS YEARS……

        1. Ok thanks for sharing . Will also make a post on this

  103. Bharani says:

    Excellent coverage, all components needed are included. 2 things come to my mind:
    1. Can add somewhere for clarity that: for tax purposes, the parent who contributes to the account can claim for 80C benefit (I assume that is the case here).
    2. You can compare post-tax return of both PPF and SSA for better comparison, assuming 10%, 20% or 30% bracket. I think PPF’s return will beat SSA with 20% taxation.
    Granted, I don’t think it is taken up yet by all post offices or banks, at least in the state I live in (TamilNadu).

    1. 1. Yes, I have already mentioned that it comes under 80C

      2. Yes, it can be done .

  104. Lakshmaiah says:

    Dear Manish,

    Thank you for the article.
    Here is my opinion and some doubts. Please help to clarify.

    PPF is better than this new scheme because the Interest is not taxable for PPF. For new scheme, If interest is taxable.. definitely it will come below the PPF returns.

    Second point is recently I tried to open the PPF account at SBI, They refused open saying that Minor’s can not open the PPF Account. This may be due to bank staff not aware of rules fully. Even if I can open PPF Accounts for my two kids, Together with my PPF account, I can deposit only 1.5Laks in total. This is again limitation.

    With these two points, May be SIP may be only option available for amounts above 1.5 Laks year.

    Please correct me if my understanding is wrong.

    Thanks
    Lakshmaiah

    1. You can surely open the PPF account for minor. Show them the govt rules as per Post Office website . Meet branch manager if required.

      Like you said, SIP is one of the best options for long term duration !

  105. Ram says:

    This is a good initiative by government, but 1,50,000 per year is a big amount for people who don’t know anything about Mutual funds. IN fact, it’s quite a big chunk even for a person who’s earning close to a lac if you calculate per month.

    However, i think on the upside, the 9.5% interest rate is very attractive. Given that mutual funds generate around 12%, this is a close tie-up, but the biggest disadvantage is that the interest rates can vary year to year. So that makes it a risky investment. What if the interest rates are lowered to 5% next year? Your money is locked in and you don’t get the best bang for your buck.

    Overall, good attempt, but faulty execution

    1. Ram

      The interest rate is 9.1% and not 9.5% . Also the interest rate will not be lowered to 5% unless the FD interest also comes to the same level . More or less it will be in line with the FD rates.

      Manish

  106. Priyesh says:

    It’s a wow write up Manish. Personally I feel for parents who are unable to fund the girl child’s PPF account due to restriction of capping if ₹.150,000/- this is a boon & for knowledge purpose is the interest linked to 10 yr GSec rates as in case of PPF, if 9.10% is guaranteed for the full tenure then I feel this will beat the PPF returns. Isn’t it ???

    1. Hi Priyesh

      The interest rate as of now is fixed at 9.1% and will be updated from time to time as per govt notifications . But I am not sure if its linked to 10 yr GSec or not . Also its not fixed for whole tenure, exactly like PPF . Overall I think its very much in line with PPF form returns point of view

  107. Dr Nilesh Kate says:

    Great article.
    Nice initiative from government.
    But I think it’s bias. Why for girl child.
    Those parents who have mentality of saving for their kids generally don’t differentiate between girl and boy.
    Thank you for nice and clean insight.

    1. Its not biasness. Its for encouragement . YOu are talking about those parents who dont differentiate, but then this scheme is for those who do ! . There are millions of them .

      1. Anjan says:

        So, the government is basically rewarding bigoted parents who look down upon the girl child. Way to go, GOI!

  108. PURUSHOTTAM RAMAVAT says:

    All the informations are provided in much proper way.
    Extremely helpful information.
    One chance should be given to those parents whose girl child has crossed 10 years recently.
    Thanks.

    1. As per notification, those parents whose girl child has recently crossed 10 yrs can also open the account .

  109. Dear Manish,
    Thanks for sharing.
    I think sukanya samridhi account is better than children plan of insurance companies.
    Thanks

    1. Thanks for sharing your view on this Prabir !

  110. asha says:

    This scheme I thought is for poor people – especially, children of maid servants – how can they afford saving Rs.1000/- in a disciplined way ? For them, if the Govt. can think of their contribution if the servants invest, say, Rs.50/- p.m. that would be really of help to them.

    1. Yea its a good idea . But then there is NPS where govt contributes Rs 1000 a year !

  111. vipul says:

    Is the amount invested in scheme is within the maximum upper limit of 1.5 lac under 80C? or it is in addition to it

    1. Its not seperate limit. Its with in 80C only . The max you can invest in this scheme, PPF ,ELSS, insurance policies is 1.5 lacs only

      1. Ramesh says:

        ” The max you can invest in this scheme, PPF ,ELSS, insurance policies is 1.5 lacs only”
        I think the correct statement would be that max tax benefit that we would be getting under 80C is still 1.5lac … however, one can invest upto 1.5lacs/year in PPF, this account 1.5lacs/year, limit less on ELSS, insurance policies etc … total max amount that can be considered for tax benefit under 80C would still be 1.5lac

        1. Yes Ramesh

          I think your statement is more accurate .

  112. mahesh says:

    YOU MAY OPEN ACCOUNT AT ANYTIME TILL THE AGE OF 10, BUT AS GIRL ATTAINS THE AGE 21, IT MATURES…! THIS IS THE TRUE INFORMATION.

    1. Did I not say exactly that ?

      1. varalakshmi says:

        it is useful for NRI GIRL) (INDIAN PARENTS)?

    2. As per document by govt, it matures when girl marriages or in 21 yrs , which ever is earliar !

      1. Sreekanth says:

        Dear Manish,
        Small confusion regarding ‘maturity of the account.’
        Is it 21 years from the account opening date (or) is it after the girl child attains 21 years?

        If an account is opened on the girl child’s name (age 10 years), account matures in 11 years (girl’s age 21) or in 21 years (girl’s age 31 ).

        Thank you!

        1. Sreekanth

          I was also confused on this point earlier, but when I read the exact point made in the PDF, seems like its 21 yrs from the date of opening .

          13. Closure on maturity .- (1) The account shall mature on completion of twenty-one years from the date of
          opening of the account :
          Provided that where the marriage of the account holder takes place before completion of such period of twentyone
          years, the operation of the account shall not be permitted beyond the date of her marriage :

          1. Sreekanth says:

            Manish,
            Thank you for the reply.

            I believe the no of contributions and maturity of the account are based on account opening date and not on girl child’s age.

            Maturity of account – 21 years from account opening date.

            Contributions allowed – till 14 years from account opening date. ( I think the condition, 14 years from account opening date (or) 21 years of age whichever is earlier, is not available in the gazette.) What is your opinion?

            Thank you!

  113. Sreekanth says:

    Dear Manish,
    Very well written article.
    One query on ‘corpus accumulation’ part. Are the contributions allowed for 14 years or 21 years?

    1. Contributions are allowed only for 14 yrs from the date of opening of account or upto the age of 21 yrs, which ever is earliar !

      1. Sreekanth says:

        Dear Manish,
        Thanks for the reply.
        Then in that case the maximum allowed no of contributions can be 14 only (in case an account is opened for a new born girl child).
        If my assumption is right, the corpus of Rs 85 lakh can not be accumulated.
        Correct me if i am wrong?

        1. Yes Sreekanth

          I think you are correct. I made the mistake of calculating it for all 21 yrs, let me correct it . Give me some time

          Manish

  114. Anupamita says:

    Very informative.

    Thanks.

  115. natarajan says:

    Sir, I am having a PPF a/c in the name of my 5 years old daughter this year ,I am not claiming exemption under sec 80c.can I open one sukanya-samriddhi a/c.Can a HUF open this a/c and claim under Sec 80c.
    natarajan

    1. HUF can do that. But why are you not claiming 80C for PPF ?

  116. Manoj says:

    Is interest taxable or exempt ?

    as per The Hindu, it states that “Mr. Modi said interest income and withdrawal from the scheme has been exempted from taxation.”

    1. As per the document provided by govt, the interest is taxbale.

  117. DK says:

    The campaign will be initially implemented in the 100 districts, including 12 in Haryana, and across the country where the sex ratio is rather poor.

    http://timesofindia.indiatimes.com/india/PM-Modi-launches-Beti-Bachao-Beti-Padhao-campaign-says-female-foeticide-is-a-sign-of-mental-illness/articleshow/45985741.cms

    1. Thanks for sharing that DK!

  118. Suresh D says:

    Hi Manish, Good day!

    Comparison table is really Excellent. Interest rate is fine if we compare with PPF as of now. I think its a Modi’fied scheme of PPF by Modi Govt.
    Good initiative for future of Girl child…..!

    Regards,
    Suresh D

    1. Thanks for your comment Suresh !

  119. DK says:

    Dear All,
    As far as Maharashtra, This scheme is valid only for 10 districts (Pune excluded!!). Please read the news carefully to know if your state and your district is selected for this scheme.
    Please correct if I have wrong inputs.

    1. Thanks for sharing that !

    2. Amit Kulkarni says:

      How can they restrict this scheme only for certain districts? Don’t they want to help the girl children from other cities? I am sure, it would be rolled out to the entire country – all villages and cities soon. Anyway can you please share the link, where is the list of districts mentioned?

      Thanks,
      Amit

      1. Hi Amit Kulkarni

        As its a big initiative , its going to spread slowly. So wait for sometime !

  120. Chinmoy says:

    Hi Manish,

    I have a query :- Can only parent be responsible to open this account for their daughter? I mean, Consider an example, Let say Son age is 20 and Daughter Age is 10. Parents can’t spend or they don’t have the spending limit to open the account,but Son is currently on Job and he want to spend the money for his sister.So will this be possible,that instead of Parent,Brother will open the account.

    1. Chinmoy

      As of now the document says that Parents have to do it . But why cant parents open the account, brother gives money to parents and parents make the payment, Its easy to set this up !

      Manish

    2. Chinmoy says:

      Thanks Manish,

      The main reason for the above query is, Son can get the tax exemption on his salary by investing to this account. But as you said, only parents are responsible to open this account.

      1. No , Son cant get tax exemption for contributing for sister . Only parents can get it .

  121. Rakesh P says:

    Nice Information Shared, Thanks!!!
    Its a good initiative from GoI.

    I think, We should not compare SSA account with PPF in any case as Both accounts are of different purpose and use.

    While one invest in PPF mostly for retirement in his mind where as SSA is purely for Girl child’s Educational and Marriage purpose.

    You can Invest 1.5lacs max in a year (including your PPF acc, child1 PPF acc, child2 PPF acc) wheare as in SSA you can invest additional (If you can) 1.5lacs for your girl child, if you have two girl you can invest 3.0 lacs total. (One should have money to invest :D)

    I am not sure but I guess, SSA will give good returns if we compare it to traditional child plan.

    And Good thing is that you can invest upto 14 yrs of your child age, which force you to start early.

    1. Its a very important point thats its much better compares to traditional plans ! 🙂

  122. Chinmoy says:

    Nice Article Manish with good clarity.

  123. Jay Sheth says:

    Hi Manish,

    There are a couple of important corrections in the above article:

    1) “Account can be opened only before the girl child completes 10 yrs age” => This is not true. If the girl child is say 12 year old, the girl can herself open the Account in that case, without the need of parent or guardian.

    2) “Sukanya Samriddhi Account will get matured when the age of girl child reaches 21 yr” => This is not true. The account matures on completion of twenty-one years from the “date of opening the account”. So if I have a 5 year old daughter, and if I open her account today, it will mature after 21 years from today, that is when my daughter turns 26.

    Regards,
    Jay

    1. Jay Sheth says:

      Hi Manish,

      I apologize for my misunderstanding and confusion caused on the eligible age for account opening. It is indeed 10 year (or max 11) as government is giving a buffer time of 1 year.

      But I still read the maturity term as 21 years from the date of account opening, irrespective of the age of the child attained.

      1. Yes, I see that I made that mistake earlier . Now I have changed it in the article. Thanks for pointing that out !

  124. Sandeep says:

    The point from a taxation perspective which everyone is missing is that in case of minor child the income is clubeed in the hands of the parent. In that scenario interest earned on this deposit will be taxed at the rate of 30% in the hands of the guardian. Wheres in PPF, the income from PPF deposits is exempt hence no income is clubbed in the hands of the parent. Thus effective yield for PPF is 8.70% and that of this scheme is 6.37%.

    This is the real difference.

    1. Sandeep thanks for sharing that perspective !

  125. Mukul Rao says:

    Thanks Manish for the detailed and descriptive information provided for SSA.
    This is really very informative and helpful.

    You are doing a good work. We appreciate it… Keep it up

  126. Sameer Bane says:

    If Interest earned is taxable then PPF is the best and safe option. Safe option as in compared to SIP in mutual funds as well of-course for those who don’t want to take risk.

    1. Sameer

      Yes, agreed !

    2. Yes, agreed to your take !

  127. YR Suri says:

    This proves that Government of India will encourage dowry custom and also costly Higher Education, mid day meal or free education up-to 10th or 12th is a (Loli-Pop) Government investment only and Government will reap the crop until the age of 17 and there after for Higher studies, as most of the Institutions are being run by the Indian Rulers and the Politicians. Bureaucracy Zindabad ! Zindabad.

    1. Jay Sheth says:

      @Y R Suri, suggest you to take a look at the brighter side. It is an absolutely GREAT and respectable initiative taken by the government, helping the girl child in every manner while serving both – proud parents of girl child/children, and not-so-proud guys (pity them!!!). In any case, it is a great way to build corpus for one’s daughter. Expenditures are inevitable, be it a son or daughter, and this is a great tool to give inflation adjusted (or even better) long term returns. There is no need to link it with dowry or educational costs.

      It is unjust to blame government like this.

      1. Anjan says:

        I completely agree with Suri in this case. This scheme seems to encourage the tradition of dowry and nothing else. Why else should this scheme be restricted to girl child only? Higher education you say? Well, that applies to both the boy & girl child, so this scheme could not have been introduced with that in mind which only leaves us with one possible angle….

        Shame on the Indian government for promulgating such one sided schemes.

        1. Pradeep says:

          What is dowry? Its distribution of your wealth among children. Sons are given immovable property and daughters are given cash and gold. I would give as much Gold as I can to my daughter in her wedding. But then greedy people doesnt miss any opportunity. Only loosers marry for dowry.

    2. Thanks for sharing your view on this topic Mr. Suri !

    3. Thats a good point Suri , this is what exactly happens in PPF too !

  128. C J Gopinath says:

    First it was Varishta bima pension, then kisan vikas parta and now sukanya samriddhi account.
    This look a a hybrid of RD and PPF.

    Anyway thanks for detailed analysis

  129. Shaz says:

    This is targeting those people who feel overburdened cause of girl’s marriage or education and therefore the locking period. I think its a great initiative and motivates people to exclusively save for their girl child and be little relaxed about the future. PPF, SIP, RD s are all good and meant for those who would anyways want to provide the best to their girls. But for those who had this psychological block that having a girl is a bigger financial responsibility this scheme should help.
    A minor error i’d like to point out in the comparison chart. The maximum contribution values are missing from row for “Minimum and maximum contribution”.
    Otherwise, great info Manish. Thanks for sharing.

    1. I just realised that, and made the correction . Thanks for pointing it out !

      Manish

    2. Thanks for sharing that. I just fixed that !

  130. Phani says:

    i have one doubt in this. is it possible to investet different amounts in each year or we need to continue fixed amount what we will deposited in first year.
    like
    First Year – 100000
    Second Year – 10000
    Third Year – 50000
    Fourth Year – 40000
    Phani Kumar

    1. Jay Sheth says:

      @Phani, that is absolutely allowed. No need for fixed amount each year.

    2. Yes, its possible . the only rule is that minimum is 1000 and max is 1.5 lacs

  131. Jayaraman V says:

    For a disciplined investor, any investment in ELSS / PPF are good avenues for long term planning depending on their risk profile. It is a very good initiative for a girl child and parents who are very keen to ensure good education and respectable marriage to their daughter, this will be a right fit. In my opinion, it is a good investment opportunity if it is allowed to accumulate till its tenure + maximum investible contribution in this scheme.

    1. Thanks for your comment Jayaraman !

  132. Surendra says:

    Hi Manish,

    Thanks for sharing this information. I understand that the total amount deposited in Sukanya Samridhi account, PPF, ELSS, etc … should not exceed rupees 1,50,000 for taking 80C exemption. Or is there a separate provision for Sukanya Samridhi account to deposit maximum 1,50,000
    Regards
    Surendra

    1. Jay Sheth says:

      Hi Surendra,

      There is no rule which says that the total contribution under various instruments cannot exceed Rs.1,50,000/-.

      I can very well invest Rs.1,50,000/- in my PPF and another Rs.1,50,000/- towards my daughter’s sukanya samriddhi account. Total 3,00,000/-. It is just that my benefit under Section 80C, in that case, will be capped to Rs.1,50,000/-

  133. manu says:

    Hi Manish

    This is great information. The interest earned is taxable …as you had said…is taxable under parent income / child income. I mean do clubbing rule will apply here.

    If yes..then I think you need to update the graph taking into consideration the taxation part.

    1. Clubbing will surely apply here .

  134. Happyinvest007 says:

    Fantastic article Manish… Thanks a ton!!

    From my perspective, difference in interest rate between PPF and this scheme and tax exemption. Looking from that I think, PPF is always better than this scheme since interest rate on this scheme can be lower in future.

    SIP in mutual fund or ELSS is anytime BEST 🙂

    1. Yea PPF is overall better . SIP is best !

      1. rashmi says:

        How do we determine which sip is best?

        1. Rashmi

          You cant decide for a fund from a long term point. The best shortcut is to choose a fund with a 4-5 star on sites like Valuesearch or moneycontrol

  135. santanu107 says:

    Very nice comparison chart Manish. This is a good initiative but I think Govt has only thought about those people who don’t have internet access.

    1. I think you should not look at this in that manner. Its just a start . Implementing it all over India is a challenge . Online deposit might be a possibility later, but primarily I think the target is middle and lower income class !

      1. santanu says:

        You are right. This is just beginning only. And anyway in long run if this got success, we can see more features. 🙂

  136. Sagar Pednekar says:

    Thanks again Manish for detailed information,
    I think SIP for 21 years is best options
    Regards,
    Sagar

    1. Yes, even I think SIP is the best option !

  137. Deepali says:

    Hi Manish and Nandish,

    If we compare PPF and this scheme, parent can invest total of Rs. 150000/- if they have PPF account for parent and their girl child. But in this scheme they can deposit Rs.150000/- in each account (PPF and Sukanya Samriddhi) . In this way they can save Rs.300000/- (PPF + Sukanya Samriddhi) in a year if they have one girl child (not considering 80C limit but just a saving perspective). So they can keep PPF only for retirement and Sukanya Samriddhi amount for their girl 🙂

    Regards,
    Deepali

    1. Tarun says:

      Good one 🙂

    2. Thats a good point Deepali

    3. Shalabh says:

      Hi Deepali,

      I was also thinking on the same line.
      My query is the amount we deposit in Sukanya account do we have to pay taxes on the interest earned every year or that is also exempted. If yes then there is some benefit in this otherwise not.

      Thx,
      Shalabh

  138. Bharat says:

    Thanks for this information.

    Could you add a similar graph showing the case of money invested in PPF? You could extrapolate the calculation to show what would be the return on PPF hypothetically, if it was extendable for 21 years. This would help readers to compare the two schemes better.

    1. Will do it a bit later.

  139. Sucharita Sinha says:

    Hello Manish and Nandish,

    Thanks a ton for sharing such a nice and detailed description of this new plan, with various comparison aspects of the “looks like” similar savings options. Glad that government is taking such initiatives towards saving Girl child. Hope more and more people will get awareness from such initiatives. Thanks for bringing it to the forum!!

    Regards,
    Sucharita

    1. Santanu says:

      Initiate-wise definitely a great one. But have couple of drawbacks as well. I don’t what is the point if stopping investment after 14 years. If your kid is now 9 year old then you will get only 5 more years to invest.

      1. Navneet says:

        Santanu,
        The limit for depositing till 14 years is from the date of opening account. Not based on child’s age.

      2. Jay Sheth says:

        Hi Santanu,

        That is not true. Stopping the investment after 14 years means 14 years after the account was opened. So for a 9 year old child, you can still invest for next 14 years, until your child becomes 23. Hope this is clear.

        Please see my other comment (Comment #16) as well.

        Further extrapolating the above statements, I am led to believe that even a 15 year old girl can open an Account for herself, today, and let it go on until she turns 36 (21 years from today).

        1. vluday says:

          Jay/Santanu….

          “You can deposit the money in the account only for the 14 yr period, from the date of opening”, so 14 years is correct; whereas 36 seems to be wrong. As maturity is 21 years age of the child.

          Santanu’s case as his daughter is 9, he has got 12 years I guess.

          1. Jay Sheth says:

            @vluday, this is not correct. The maturity is 21 years after the account was opened. So if I open the account in year 2015, for my 9 year old daughter, maturity would be 2036 (which is when she turns 30).

            This is therefore independent of the age your child attains.

            Please go through the PDF link posted by Manish, which states these rules.

            1. santanu says:

              Thanks everyone, i took it wrongly.

            2. Anshudeep says:

              To clarify it a bit, maturity of the account happens 21 years after the opening of the account, same way deposit for 14 years from the time of opening of the account. Nothing to do with the age of girl child here… Only thing where the age matters is opening of the account which is restricted to the age of 10 (grace period of 1 year in 2015 only). So the perception of 15 years and the account going on till 36 is wrong.

      3. Anjan says:

        Actually this is a shameful initiative by the government in my opinion. When will the government realize that reservation and quotas never work? This scheme may not sound like it, but its nothing but another glorified form of reservation or quota (say what you may) that only benefits a portion of society and not entire society.

        Indian society can only evolve when all such quotas and schemes that only benefit one portion of society is completely abolished. Laws, policies and scheme purported by the government should be such that it benefits all sections of society and true equality is promoted by giving equal benefits to all.

        Do you really think this is the right way to save a girl child? Government has to analyze why people don’t want a girl child first and then bring reforms to eradicate those barriers. Just dangling the financial carrot in front of people via such scheme will not do anything to change people’s mindset in the long run.

        1. Thats a good perspective Anjan.

        2. Jay Sheth says:

          I personally disagree with Anjan, but that’s okay to have a difference of opinion, so won’t argue further. I personally see “financial carrot” as one of the means, among other efforts, and certainly not the “only mean”. We can see it as a good attempt by the government.

          1. Anjan says:

            If you need a financial carrot as an incentive to love & care for your girl child, then it only strengthens my argument. This kind of mindset does nothing to take our society forward. Its like a short term band-aid to stop the flow of blood but the disease still remains.

            1. Jay Sheth says:

              Ah, looking from that perspective may be you are correct. Being a very proud father of a daughter myself I have been deeply saddened by the heinous acts in our country. But I see your perspective now.

            2. Kamal says:

              I respect your view but at the same time, I would see this as an opportunity given to save in a government scheme ( relatively lesser risk ) for a girl child when you have exhausted the PPF limit.
              If we talk about inequality, then how do you see higher interest rates being paid to Senior Citizens ?

            3. hari says:

              I agree with Anjan.
              I too feel its a sick policy.
              Because of the following points
              1) This is like forcing/planting-in the people’s mind to show in-equality between boy and girl child. Why do you need to save separately for girl child? Are you telling that the girl child is a burden?
              2) I feel this is going to be slowly a dowry-save-instrument.These kind of concept based (NOT POLICY) strengthens the dowry system.
              3) By this, the govt is telling that it is very expensive to raise girl child.

            4. Aslam says:

              Agreed

          2. Ramesh says:

            I agree with Jay’s perspective
            (while still appreciating the thoughts of Anjan as he made a very very relevant point).

            1. Ramesh says:

              I agree with Jay’s perspective
              this is good for fature

            2. Welcome .. Glad to know that Ramesh ..

        3. Aditya says:

          Hi Anjan,

          I totally agree with you government is more interested in their Liquidity.

      4. Its 14 yrs from the date of opening the account .

  140. Kiran says:

    Thanks for sharing this information. Good part of the scheme is you can have one account per child (beneficial if you are parent of two girls) and also you cant withdraw before 18 yrs or 21 yrs of the account holder.

    1. Yea . Thanks for your comment Kiran !

  141. Anuj says:

    SIP in ELSS is still the best … don’t know its EEE or ETE but above said scheme has good emotional comoulsion & less liquidity that’s why it is more likely shall be carried to 21 years

    1. Yes Anuj

      For that big term, Even I am inclined towards SIP personally . BUt a lot of people do not want equity in their portfolio, especially for their kids education goal !

  142. Hi Manish

    This is a detailed analysis worth sharing. I also agree that the scheme doesn’t seem to have much more benefits vis-a-vis PPF. Its aimed to have a psychologically motivate people as in our society people still distribute laddoos when a boy is born and refuse to eat food if a girl is born in the family. i think this account is aimed to encourage people in that way which is good.

    1. Yes thats correct Rachna !

  143. vaz says:

    Excellent first hand information and comparison table as always. Hope this comes about with all the hiccups ironed out after a few months as you suggested.

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