Sukanya Samriddhi Yojana: rules, deposits, withdrawal and tax

What is Sukanya Samriddhi Yojana?

Sukanya Samriddhi Yojana is a government small savings scheme in which a parent or guardian saves in a girl's name, and the account runs for 21 years. A small savings scheme is a savings product run by the Government of India's Ministry of Finance and sold at post offices and some banks. The formal name is the Sukanya Samriddhi Account Scheme, 2019.

You pay in for the first 15 years after opening the account. For the last six years you pay nothing, and the balance keeps earning interest until the account matures at 21 years. Maturity means the end of the account's term.

Both periods count from the day you open it. If you open the account when your daughter is 3, you can pay in until she is 18, and the account matures when she is 24.

It is one of nine post office schemes, and the only one of them open to girls alone. Our guide to post office savings schemes covers the other eight.

Who can open a Sukanya Samriddhi Yojana account, and where?

One guardian can open the account in the name of a girl who has not turned 10 on the day it is opened. The guardian runs the account for her until she turns 18. After that she operates it herself, after submitting a revised application with fresh KYC documents.

The account is opened by the girl's guardian, usually a parent. If a grandparent wants to help, the simplest route is to give the money to the parent who holds the account.

The scheme allows one account per girl and at most two girls in a family. For twins or triplets the scheme sets out extra cases, and the guardian gives an affidavit supported by the birth certificates.

Both the guardian and the girl must be resident citizens of India.

To open the account you need:

• the girl's birth certificate
• the guardian's Aadhaar, and either PAN or Form 60
• a mobile number and a nominee

The guardian's Aadhaar and PAN (or Form 60) are the KYC (know your customer) documents, the identity check the post office or bank makes before it opens the account.

You can open the account at a post office or at an authorised bank. Authorised banks include all public sector banks and ICICI, Axis and HDFC Bank.

At the post office you open the account in person. Some banks let existing customers open one through net banking or their app, so check with your bank. Once it is open, you can pay in online.

How much can you deposit, and for how many years?

You must deposit at least ₹250 and at most ₹1,50,000 in a financial year, in multiples of ₹50, for 15 years from the date of opening. A financial year runs from April to March. You can pay in a lump sum or in several deposits.

If you miss the ₹250 minimum in a year, the account goes into default but keeps earning the scheme rate. To revive it, pay ₹250 for each missed year plus a ₹50 penalty for each, at any time until 15 years from opening.

India Post says account holders can pay in online through its e-banking, which needs a post office savings account. They can also pay through the India Post Payments Bank app, or by NEFT or RTGS from a bank account. NEFT and RTGS are ways of moving money from one bank account to another.

What interest does Sukanya Samriddhi Yojana pay, and is the rate fixed?

The rate is 8.2% a year for 1 October to 31 December 2026, and it is not fixed. The Ministry of Finance announces the rate every quarter, and the whole balance earns whatever rate is notified. A notified rate is the rate the government announces for that quarter.

That separates it from a time deposit or a National Savings Certificate, which lock in the rate on the day you open them. PPF (Public Provident Fund) and Sukanya Samriddhi move with each quarter's rate.

The rate has stayed at 8.2% since 1 January 2024, when it rose from 8.0%, so it has held for 12 quarters. It has ranged from 9.2% (2015-16) to 7.6% (April 2020 to March 2023).

When the Ministry moved to quarterly rates in 2016, it said they would follow government bond yields of similar maturity.

Interest is worked out each month on the lowest balance between the 5th and the end of the month, and added to the account once a year, on 31 March. India Post lists its compounding as yearly: once interest is added, it earns interest itself in the years that follow. Paying in before the 5th of a month earns interest for that month.

What could the account grow to?

Take Meera, who pays ₹40,000 at the start of each financial year for 15 years. That is ₹6,00,000 paid in. If the rate stayed at 8.2% for all 21 years, the account would hold about ₹19.15 lakh (₹19,15,232) at maturity, of which ₹13,15,232 is interest.

That is arithmetic on an assumed, unchanged rate, not a forecast. To work out your own figures, use the Sukanya Samriddhi Yojana calculator.

When can you take money out of a Sukanya Samriddhi Yojana account?

The account matures 21 years after opening, and before that money comes out only in the cases below.

Education. Once your daughter turns 18 or passes Class 10, whichever comes first, she can take out up to half of the balance. The balance counted is the one on the previous 31 March, and the money is for her education. You need an admission letter or a fee slip. She can take only what the fees need, in one go or once a year for up to five years.

Say Meera opened the account when her daughter was 2. At an assumed 8.2% held throughout, it would hold about ₹12.9 lakh when the girl is 18, so half is about ₹6.5 lakh. The fees cap what she can take.

Marriage. She can close the account for her marriage if she will be at least 18 on the wedding day, from one month before the wedding to three months after it. She needs a notarised declaration and proof of age. She gets the full balance with interest.

Compassionate grounds. After five years from opening, the post office or bank can allow early closure on extreme compassionate grounds. Examples are a life-threatening illness of the girl or the death of the guardian. The account pays the full scheme rate, and the post office or bank decides each case, not the Central Government.

The girl's death. The account is closed on application. The balance, with interest at the scheme rate up to the date of death, is paid to the guardian. After the date of death, interest is at the post office savings rate.

What happens after 21 years, or if you move abroad?

After 21 years the account stops earning the scheme rate. If you leave the money in, it earns only the post office savings rate, which is 4% now. So close the account when it matures.

If your family moves abroad, the account can stay open until it matures, but the money can be used only in India. If your daughter or you give up Indian citizenship, the account is closed.

How is Sukanya Samriddhi Yojana taxed?

Under the old tax regime, deposits count towards the ₹1.5 lakh limit of section 123 (the old Section 80C). In both regimes, what the account pays out, interest and maturity, is not taxed. A deduction is an amount you subtract from your income before tax is worked out.

The old regime allows deductions such as section 123; the new regime does not. The new regime applies unless you opt out, so the deposit gets no deduction. If you have no business income, you choose the old regime in your return each year. Our guide to the new tax regime explains the choice.

The ₹1,50,000 limit is one limit for the whole year, shared by every eligible item. PPF, ELSS (equity-linked savings scheme) funds and tuition fees are among them, and our guide to saving tax in India lists the rest.

Suppose Meera deposits ₹40,000 in a year and chooses the old regime. Her income was already inside the 20% slab (the band of income taxed at 20%) before the deduction and stays inside it after. Her total income is at or below ₹50 lakh, so no surcharge applies, and the section 123 limit is not already used up. The deduction saves ₹8,000 of tax plus ₹320 of 4% cess, which is ₹8,320. At the 30% slab, with the same conditions, it saves ₹12,000 plus ₹480 of cess, which is ₹12,480. Under the new regime it saves nothing.

Is the Sukanya Samriddhi Yojana safe?

It is a Government of India scheme, and the money goes into a government account, the National Small Savings Fund. The Ministry of Finance says its national savings schemes "offer complete security of investment".

DICGC, the Deposit Insurance and Credit Guarantee Corporation, insures bank deposits. Its cover does not apply to these schemes.

The rate can change in any quarter, and the money is tied up for a long time.

Sukanya Samriddhi Yojana, PPF, NPS Vatsalya or a mutual fund: how do they differ?

The Sukanya Samriddhi Yojana is for a daughter and pays a notified rate. PPF can be opened by an adult for themselves, or by a guardian for a child of either sex, at a lower notified rate. NPS Vatsalya is a market-linked pension account for any child. A mutual fund has no set rate and can fall in value.

An exit load is a fee some funds charge if you sell within a set time after buying. A lock-in is a period in which you cannot sell at all.

What you put into your own account and your children's accounts together cannot pass ₹1.5 lakh a year. Like Sukanya Samriddhi, PPF is only for resident citizens of India; NRI and OCI children can have NPS Vatsalya.

For the wider picture, read our guide to investment options for your child. The detail on each product is in our articles on opening a PPF account, NPS and NPS Vatsalya, mutual funds for a child's education and tax on mutual fund redemption.