SSY offers 8.2% tax-free interest for your girl child's future. Here is how much you need to invest, the maximum deposit, when the account matures, partial withdrawal rules, and how it compares with PPF.
Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme for a girl child's education and marriage. It currently offers 8.2% tax-free interest — one of the highest guaranteed, tax-free returns available in India. A small monthly investment started when your daughter is young can grow into a substantial corpus by the time she turns 21. Here is exactly how it works, the numbers, and what you should know before opening an account.
Interest rate: 8.2% for Q2 FY 2026-27
The SSY interest rate is set quarterly by the government, linked to government bond yields. For the July-September 2026 quarter, it is 8.2% per annum, compounded annually.
Like PPF, the interest rate can change quarterly — but the compounding effect over 15-21 years means even small rate changes have a large impact on the final corpus.
Tax treatment: The interest earned is fully exempt from tax. The maturity amount is fully exempt. Contributions qualify for Section 80C deduction — so SSY has EEE (Exempt-Exempt-Exempt) status.
Eligibility — who can open an account
- The account must be opened in the name of a girl child. - The child must be an Indian resident. - The child must be below 10 years of age at the time of opening (age calculated from date of birth). - A parent or legal guardian opens and operates the account until the girl turns 18. - Only two accounts per family are allowed (exceptions for twins or triplets).
Deposit rules
- Minimum deposit: Rs 250 per financial year. - Maximum deposit: Rs 1,50,000 per financial year. - Deposits can be made in multiples of Rs 50. - Deposits must be made for 15 years from the year of opening. After 15 years, no further deposits are required, but the account continues earning interest until maturity.
If the minimum Rs 250 is not deposited in a year, the account becomes 'defaulted.' It can be revived by paying a penalty of Rs 50 per year of default plus the minimum Rs 250 deposit for the missed year.
Maturity and withdrawal
- The account matures 21 years from the date of opening. - Partial withdrawal of up to 50% of the balance is allowed after the girl turns 18, for higher education expenses. - Premature closure is allowed only in specific circumstances: death of the account holder, or on compassionate grounds (life-threatening illness of the account holder). - If the girl marries before maturity (after turning 18), the account can be closed early — but this must be done within 3 months of the marriage date.
How much will you accumulate? — worked example
Let us assume an SSY account is opened for a girl aged 2 years, with deposits of Rs 10,000 per month (Rs 1,20,000 per year) for 15 years. Interest rate: 8.2% throughout (illustrative).
| Year | Annual Deposit | Balance (cumulative) | |---|---|---| | 1 | Rs 1,20,000 | Rs 1,29,840 | | 5 | Rs 1,20,000 | Rs 7,86,000 | | 10 | Rs 1,20,000 | Rs 20,15,000 | | 15 (deposits stop) | Rs 1,20,000 | Rs 39,30,000 | | 21 (maturity, no further deposits) | Rs 0 | Rs 61,20,000 |
The corpus grows from Rs 39.3 lakh at year 15 to Rs 61.2 lakh at year 21 — even though no deposits were made in those 6 years. The power of compounding continues.
Total deposited: Rs 18,00,000. Total maturity: Rs 61,20,000. Total interest earned (tax-free): Rs 43,20,000.
SSY vs PPF — which one for your child?
| | SSY | PPF (in child's name) | |---|---|---| | Who can open | Girl child under 10 | Anyone can open for a minor | | Interest rate | 8.2% (Q2 FY26-27) | 7.1% (Q2 FY26-27) | | Lock-in | 21 years (partial withdrawal from 18) | 15 years (partial withdrawal from 7) | | Tax benefit | EEE (tax-free at all stages) | EEE (tax-free at all stages) | | 80C deduction | Yes, within Rs 1,50,000 | Yes, within Rs 1,50,000 | | Best for | Girl child education/marriage | Any child's long-term goal |
SSY offers a higher interest rate than PPF (8.2% vs 7.1% currently) but with a longer lock-in and specific purpose. If you have a girl child, SSY should generally be the first Rs 1,50,000 you allocate for her future. PPF can supplement it if you want an additional long-term vehicle.
How to open an SSY account
Accounts can be opened at any post office or authorised bank (SBI, PNB, Bank of Baroda, Canara Bank, etc.).
Documents required: - Girl child's birth certificate. - Parent/guardian's PAN and Aadhaar. - Address proof of parent/guardian. - Two passport-size photographs (of parent).
Frequently Asked Questions
### Can I open SSY for two daughters? Yes. A family can open up to two SSY accounts — one for each girl child. For twins or triplets, more than two accounts are allowed with proof of multiple birth.
### What if the girl child becomes an NRI? If the girl child becomes an NRI (or the parent becomes an NRI), the SSY account must be closed. The interest will be paid at the post office savings account rate (currently 4%) from the date of the account becoming NRI until closure — which is significantly lower than the SSY rate.
### Can I change the deposit amount every year? Yes. You can vary the deposit amount each year, as long as it stays between the minimum (Rs 250) and maximum (Rs 1,50,000). There is no requirement to deposit a fixed amount.
### What happens if the girl child dies before maturity? The account is closed and the balance (deposits + interest up to the date) is returned to the parent or guardian.
### Is SSY better than a child education plan from an insurance company? In most cases, yes. Insurance-cum-investment child plans typically deliver 4-6% returns after charges, compared to SSY's 8.2% tax-free. The insurance component adds a cost that usually outweighs the benefit. A combination of SSY (for guaranteed, tax-free returns) and a separate term insurance policy (for pure life cover) is generally more efficient than a bundled child plan.
Disclaimer
This article is for educational purposes only. Interest rates are subject to quarterly revision. Verify the current SSY rate before investing. The worked example uses an illustrative, constant interest rate for simplicity — actual rates may vary across quarters.