The Sukanya Samriddhi Yojana scheme increased interest rates by 20 basis points in the January-March quarter.
2 min read 2023-12-30, 04:50 PM IST
Summary Of the content
- Interest Rate Hike: Government increases Sukanya Samriddhi Yojana (SSY) interest rates by 20 basis points for January-March 2024. New interest rate: 8.2%, up from 8%.
- Benefits of SSY: Government-backed scheme offering guaranteed returns. Income tax benefits on contributions up to ₹1.50 lakh per financial year under Section 80C. Tax-free interest earned through the Sukanya Samriddhi Account (SSA). Allows a minimum annual contribution of ₹250 and a maximum of ₹1.5 lakh.
- Withdrawal and Maturity Rules: After the girl reaches 18, guardians can withdraw up to 50% of the balance in a financial year. Withdrawals can be in a single transaction or installments, with a maximum of one withdrawal per year for up to 5 years.
- Interest Rate Adjustments: Three-year term deposit scheme rate increased by 10 basis points for January-March 2024. New rate for the 3-year term deposit is 7.1%, up from 7%.
The Narendra Modi government has taken a significant step in bolstering the financial well-being of families and promoting long-term savings by announcing a hike in the interest rates on the Sukanya Samriddhi Yojana (SSY) scheme. This move, coming just ahead of the Lok Sabha polls in 2024, reflects the government’s commitment to providing enhanced financial benefits to the citizens.
The recent finance ministry circular has outlined a 20 basis points increase in the interest rates on deposits made under the Sukanya Samriddhi scheme for the January-March quarter. The new interest rate stands at 8.2%, up from the previous 8%. This decision is in line with the government’s practice of notifying interest rates on small savings schemes, primarily managed by post offices, on a quarterly basis.
Key Benefits of Sukanya Samriddhi Yojana
- Government-Backed Scheme: As a government-backed initiative, the Sukanya Samriddhi Yojana ensures guaranteed returns for investors.
- Income Tax Benefits: Investors can claim income tax benefits on investments made in an SSY account, with a limit of up to ₹1.50 lakh in a single financial year under Section 80C of the Income Tax Act.
- Tax-Free Interest: The interest generated through the Sukanya Samriddhi Account (SSA) is exempt from income tax, providing an additional financial advantage.
- Flexible Contribution: The scheme allows a minimum annual contribution of ₹250 and a maximum contribution of ₹1.5 lakh in a financial year, offering flexibility to investors based on their financial capacity.
Sukanya Samriddhi Account Withdrawal and Maturity Rules
Upon reaching 18 years of age, the account holder (girl child) or her guardians can initiate withdrawals from the account, allowing access to up to 50% of the balance in a financial year. The Department of Posts has established regulations for withdrawals, permitting them in a single transaction or installments, with a maximum of one withdrawal per year and up to a limit of 5 years.
In addition to the SSY, the government has also adjusted the interest rates for other small savings schemes for the January-March 2024 quarter. The three-year term deposit scheme, for instance, has witnessed a 10 basis points increase, bringing the new rate to 7.1% from the previous 7%. The government’s move aims to encourage savings across various durations by offering competitive interest rates.
Latest Interest Rates for Small Savings Schemes (January-March 2024)
- PPF (Public Provident Fund): 7.1%
- SCSS (Senior Citizens Savings Scheme): 8.2%
- Sukanya Samriddhi Yojana: 8.2%
- NSC (National Savings Certificate): 7.7%
- PO-Monthly Income Scheme: 7.4%
- Kisan Vikas Patra: 7.5%
- 1-Year Deposit: 6.9%
- 2-Year Deposit: 7.0%
- 3-Year Deposit: 7.1%
- 5-Year Deposit: 7.5%
- 5-Year Recurring Deposit: 6.7%
The adjusted interest rates not only make small savings schemes more attractive for investors but also align with the government’s broader financial inclusion agenda. By providing competitive rates and tax benefits, the government aims to encourage a culture of savings and secure financial futures for individuals and families across the country. This proactive approach reflects the government’s commitment to economic development and citizen welfare.