How the Sukanya Samriddhi Yojana works
Sukanya Samriddhi Yojana (SSY) is a government-backed small savings scheme designed to build a fund for a girl child's education or marriage. A parent or legal guardian can open an account for a girl child any time from birth up to 10 years of age, at a post office or an authorised bank branch. Deposits can be made for 15 years from account opening, and the account matures 21 years after opening — so for the last 6 years, no further deposits are required, but the balance already accumulated keeps earning interest until maturity. That's exactly what the calculator above splits out: a deposit phase and a hold phase.
Eligibility
- The account can be opened only in the name of a girl child, by a parent or legal guardian.
- The girl must be below 10 years of age at the time of account opening.
- A family can open a maximum of two SSY accounts, one per girl child — except that a third account is allowed if the second or subsequent birth results in twin or triplet girls.
- Minimum deposit is ₹250 and maximum is ₹1,50,000 per financial year.
Tax status — EEE, fully exempt at every stage
SSY carries the most favourable tax treatment available to a savings instrument in India, commonly called EEE (Exempt-Exempt-Exempt):
- Deposit: qualifies for deduction under Section 80C, up to the overall ₹1.5 lakh 80C limit.
- Interest: the interest credited every year is fully exempt from income tax.
- Maturity: the entire maturity amount, including the final year's interest, is fully tax-exempt on withdrawal.
Partial withdrawal at 18
Once the girl turns 18 (or has passed 10th standard, whichever is applicable per the current rules), up to 50% of the account balance as it stood at the end of the previous financial year can be withdrawn — typically for higher education expenses. This can be taken as a lump sum or in instalments over a few years, subject to submitting proof of the education expense.
Premature closure
The account can be closed before maturity in a few specific situations: after the girl turns 18 and gets married (closure is allowed only after marriage, not in anticipation of it); on the death of the account holder, with the balance paid to the guardian; or on compassionate grounds such as a life-threatening medical condition of the account holder or the death of the guardian, subject to producing supporting documents. Closing the account for reasons outside these specific grounds before maturity is generally not permitted.
Interest rates on SSY are notified by the government every quarter and can change — always check the current rate on the National Savings Institute (nsiindia.gov.in) website before making a fresh deposit, and use this calculator to re-run your numbers whenever the rate changes.
Why the deposit-then-hold structure matters
SSY's two-phase structure is what makes it different from a plain fixed deposit: you only need to actively deposit for the first 15 years, but the account keeps earning interest on the accumulated balance for a further 6 years without you putting in another rupee. This "hold phase" adds a meaningful chunk to the final maturity value, which is why the year-15 balance and the final maturity value shown above can differ so much — it's the same money continuing to compound, just without fresh contributions.
How SSY compares to other options for a daughter's future
SSY generally offers a higher interest rate than PPF, precisely because it's a targeted scheme with a narrower purpose and a defined maturity horizon. If you're weighing SSY against PPF or a plain fixed deposit, the trade-off is flexibility: PPF can be opened by anyone and used for any goal, while SSY is locked to a specific child and specific withdrawal conditions in exchange for its typically better rate. Many families use SSY as one part of a broader savings mix for a daughter's education or marriage, alongside other instruments.