One of the most confusing aspect of Sukanya Samriddhi Yojna (SSY) is its maturity timeline. Many parents open the account several years after their daughter’s birth—when she is 5, 6 or even—and are unsure about when the scheme will actually mature.
A frequently asked question is: If the account is opened when the girl is 5 years old, will the maturity amount be paid when she turns 21, or will the maturity date extend to age 26? Here all you need to know
SSY is a Government-backed small deposit savings scheme for the benefit of a girl child.
How SSY’s maturity period is decided?
The maturity of a SSY does not depend on the age of the girl child, but on when the investment starts. So, the investment will mature 21 years after the account has been opened and the contributions for the same would be continue for 15 years.
So, if the account is opened when the girl is 5, deposits can be made until she turns 20. After the 15-year contribution period ends, no further deposits are required. The accumulated balance will continue to earn the prevailing government interest rate for the remainder of the 21-year maturity period.
And at the age of 26, the girl will be able to withdraw a sizable corpus.
How it works:
- Consider a case where a SSY is opened in 2026 when the girl is 5 years old, an amount of ₹1.5 lakh is invested every year.
- Over the mandatory 15-year contribution period, the total investment would amount to ₹22.5 lakh.
- Although deposits stop after 15 years, the account does not mature immediately.
- Instead, it continues to earn interest until the completion of 21 years from the date of opening. In this example, the account would mature in 2047, when the girl turns 26.
- Thanks to the power of compounding, the accumulated interest over 21 years would be roughly ₹49.32 lakh at 8.12% interest rate.
- As a result, the maturity corpus reaches about ₹71.82 lakh
Can girl access the money before maturity?
Once the girl turns 18, up to 50 percent of the previous year’s balance can be withdrawn, primarily for higher education expenses such as tuition or admission fees and marriage.
For instance, if the balance is ₹10 lakh at that point, up to ₹5 lakh can be accessed
Key things to know about SSY
- This scheme can only be opened by a parent or a legal guardian of a girl child whose age is below 10 years. They can start by investing a minimum of ₹250 per year up to a maximum investment of ₹1.5 lakh annually. Here are some key things to know about the scheme:
- Maturity period: The SSY account matures after 21 years from the date of opening or upon the marriage of the girl child after she attains 18 years of age, subject to prescribed conditions.
- Premature closure of SSY account: Premature closure is permitted in specific circumstances, such as the death of the account holder, if they are suffering from a life-threatening illness or death of the guardian.
- Pre-maturity withdrawal rules: An account holder is allowed to withdraw 50% of the account balance as of the previous financial year’s end, However, this proceeds can only be used for educational or marriage expenses. This withdrawal is allowed only when the child has crossed 18 years or passed 10th standard, whichever is earlier.
- Tax Benefits: The scheme enjoys EEE (Exempt-Exempt-Exempt) tax status. Contributions qualify for a deduction of up to ₹1.5 lakh per financial year under Section 80C, while the interest earned yearly and maturity proceeds are completely tax-free upon withdrawal.