Sukanya Samriddhi Account or Girl Child Prosperity Scheme is a special deposit scheme launched by Prime Minister Narendra Modi on 22 January 2015 for girl child. Under the scheme an account can be opened by the parent or legal guardian of a girl child of less than 10 years of age with a minimum deposit of Rs 1,000 in any post office or public sector bank. Under the scheme, interest rate is fixed above 75 basis points on 10-year Government bond yield which is revised every quarter. The account will remain operative for 21 years from the date of opening of the account or till marriage of the girl child. Partial withdrawal up to 50 per cent of the account balance is allowed to meet education expenses of the girl child till she attains 18 years of age.

The opening of Sukanya Samriddhi Account:

For a girl child who is less than 10 years old natural or legal guardian can open only one account in her name.  Account can be opened from the birth of the girl child till she attains the age of ten years. Guardian of the girl child will be allowed to open and operate accounts of maximum of two girl children except in the case where they have twin girls the second time or triplets (three girl children). One can open account for girl born after Dec 2003.

Deposits in Sukanya Samriddhi Account:

The initial deposit: Rs. 1,000 and then in multiples of Rs. 100.

Minimum deposit: Rs 1000. Failure to deposit Rs 1000 a year will cost Rs. 50 in penalty.

Maximum Deposit: Total deposit should not exceed Rs 1.5 lakh. The deposit shall be made by cash, cheque or demand draft.

Maturity or closer of Sukanya Samriddhi Account:

The account will mature after 21 years from the date of opening. If the girl gets married before completion of twenty one years, the operation of the account will not be permitted beyond the date of her marriage. An affidavit also has to be provided to the effect that girl is not less than eighteen years of age as on the date of closing of account.

Withdrawals from Sukanya Samriddhi Account:

Withdrawal before the daughter turns 18 is not allowed. Partial withdrawal, 50% of the total amount, is allowed when the account holder turns 18, for financial requirements such as education or marriage.

Interest on Sukanya Samriddhi account

  • The Sukanya Samriddhi Yojana interest rate for January to March 2019 (Q4, FY 2018-19), is 8.5%.
  • The interest rate will be set every year
  • The Interest earned is also tax free.

Interest calculation on Sukanya Samriddhi account

Calculation of interest will be similar to Public Provident Fund (PPF). PPF interest is calculated monthly on the lowest balance between the end of the 5th day and last day of month, however the total interest in the year is added back to PPF only at the year-end.

Taxation on Sukanya Samriddhi account

The taxation comes under EEE which means exempt on deposit, exempt when account is functional and exempt on closing..

  • The amount deposited in Sukanya Samriddhi Account is deductible under section 80C
  • No tax will be levied on the interest amount.
  • No tax will be levied on the maturity amount