Quick answer
Sukanya Samriddhi Yojana (SSY) gives your daughter’s savings full EEE tax treatment: deposits up to ₹1.5 lakh a year qualify for deduction under Section 80C (now Section 123 of the Income Tax Act, 2025) in the old tax regime, and the interest plus the maturity amount are fully tax-free in both regimes. The account currently earns 8.2% a year, compounded annually.
Sukanya Samriddhi Yojana tax benefits mean a parent saving for a daughter gets a Section 80C deduction up to ₹1.5 lakh a year in the old tax regime, tax-free interest at 8.2% a year, and a fully tax-free maturity amount after 21 years — the rare EEE combination no bank fixed deposit can match.
What is Sukanya Samriddhi Yojana?
Sukanya Samriddhi Yojana (SSY) is a government-backed small savings scheme for a girl child. It started in 2015 under the Beti Bachao Beti Padhao campaign. You can open an account at any post office or authorised bank branch.
The idea is simple: parents or guardians save a small amount every year while the girl is young, and the money grows into a large tax-free sum for her higher education or marriage. The government guarantees both the deposits and the interest, so there is no market risk.
Who can open an SSY account?
Only a girl child can be the account holder, and these rules decide eligibility:
- Age at opening: the girl must be below 10 years old when the account is opened. Once opened, the account runs its full course even after she turns 10.
- One account per girl: a girl child can have only one SSY account in her name.
- Two accounts per family: a family can open accounts for up to two girl children. If twins or triplets are born, a third account is allowed for the extra girl child.
- Who operates it: a parent or legal guardian opens and manages the account. The girl can operate it herself after she turns 18.
- Residency: the girl must be an Indian resident at the time of opening.
If your daughter is already close to 10, do not wait. Once she crosses 10, the window to open an account closes for good.
How much can you deposit?
- Minimum deposit: ₹250 per financial year.
- Maximum deposit: ₹1.5 lakh per financial year.
- Deposit period: deposits can be made for 15 years from the date of opening.
- Maturity: the account matures 21 years from the date of opening, or at the girl’s marriage after she turns 18 if the family closes it then.
- Flexibility: you can deposit in one lump sum or in instalments through the year, as long as the yearly total stays within the ₹1.5 lakh ceiling.
Deposits can come from the guardian, the girl herself, or anyone else on their behalf. The account can also be transferred free of charge between post offices and banks anywhere in India.
What is the SSY interest rate in 2026?
For the October to December 2026 quarter, the SSY interest rate is 8.2% a year, compounded annually. The government reviews small savings rates every quarter, so the rate can change — but 8.2% has held steady through 2026, and SSY remains the joint-highest rate among small savings schemes, tied with the Senior Citizens Savings Scheme.
Interest is added to the account at the end of each financial year, and it keeps compounding even during the six years between the end of the 15-year deposit period and maturity at 21 years. One warning: no interest is paid after the 21-year maturity date, so withdraw the money on time instead of leaving it in the account.
SSY tax benefits: the EEE advantage
SSY is one of the few schemes in India with full EEE (Exempt-Exempt-Exempt) status. That means tax is saved at all three stages:
| Stage | Tax treatment |
|---|---|
| Deposit | Deduction up to ₹1.5 lakh a year under Section 80C (old regime only) |
| Interest earned | Fully tax-free, no upper limit |
| Maturity amount | Fully tax-free |
The deposit deduction: old regime only
Under the old tax regime, SSY deposits qualify for deduction under Section 80C of the Income Tax Act, 1961 — now Section 123 of the Income Tax Act, 2025. The ₹1.5 lakh ceiling is shared with PPF, ELSS, NSC, life insurance premiums and other 80C items, so splitting money between them does not raise the limit.
Under the new tax regime there is no deduction for SSY deposits. This is the point most articles get wrong: the new Act renumbers 80C as Section 123, but it does not make the deduction available in the new regime. What the new regime keeps is the second half of EEE — the interest and the maturity amount stay fully tax-free even if you file under the new regime. That alone makes SSY better than a taxable fixed deposit for new-regime families.
How much tax does the deduction save?
If you deposit the full ₹1.5 lakh and you are in the 30% slab under the old regime, the deduction saves ₹46,800 a year (30% plus 4% cess). In the 20% slab it saves ₹31,200 a year. Over 15 years of deposits, that is a large sum back in your pocket — on top of the tax-free interest.
Interest and maturity: exempt in both regimes
The interest on SSY is exempt under Section 10(11A) of the 1961 Act, and the maturity proceeds are exempt too. There is no TDS on SSY interest or maturity. Unlike a bank FD, where interest is added to your income and taxed at your slab rate every year, SSY interest is never taxed at all.
How much will the money grow?
The table below is an illustration at a constant 8.2% rate. The real rate is revised every quarter, so the final amount will differ, but the shape of the growth is the same.
| Deposit per year | Total deposited (15 years) | Maturity value at 21 years (approx.) |
|---|---|---|
| ₹25,000 | ₹3,75,000 | ₹11.54 lakh |
| ₹50,000 | ₹7,50,000 | ₹23.09 lakh |
| ₹1,00,000 | ₹15,00,000 | ₹46.18 lakh |
| ₹1,50,000 | ₹22,50,000 | ₹69.27 lakh |
At the maximum deposit, ₹22.5 lakh of deposits grows to about ₹69.27 lakh — roughly ₹46.77 lakh of interest, all tax-free. A taxable FD at the same rate would hand a chunk of that interest back as tax every year; SSY keeps the whole amount.
Can I withdraw SSY money before maturity?
Yes, but only in defined situations.
Partial withdrawal for higher education
Once the girl turns 18 or passes Class 10, whichever is earlier, you can withdraw up to 50% of the balance as it stood at the end of the previous financial year. The withdrawal must be for her higher education, with proof such as an admission offer letter or fee slip. It can be taken as one lump sum or in instalments — at most one withdrawal a year, for up to five years. The account stays open after a partial withdrawal.
Premature closure
The account can be closed before 21 years only in these cases:
- Marriage of the girl after she turns 18: apply between one month before and three months after the wedding date, with age proof and the marriage certificate or affidavit.
- Death of the girl child: the balance with interest is paid to the guardian.
- Compassionate grounds after five years: for example, a life-threatening illness of the account holder or death of the guardian, as allowed under the scheme rules.
There is no general early closure option. You cannot simply close an SSY account because you need the money — that is the trade-off for the high rate and full tax exemption.
What happens if I miss an SSY deposit?
If you do not deposit the minimum ₹250 in a financial year, the account is treated as defaulted. It can be revived any time before maturity by paying a penalty of ₹50 for each year of default plus the minimum ₹250 deposit for the revival year. Interest on the existing balance continues during default; only the missed deposits themselves earn nothing, because that money was never put in. Do not let defaults pile up — the penalty is small, but a lapsed account is easy to forget for years.
SSY vs PPF: which is better for your daughter?
Both SSY and PPF carry EEE status and share the ₹1.5 lakh Section 80C ceiling, so the choice comes down to the goal.
| Feature | SSY | PPF |
|---|---|---|
| Who can open | Guardian of a girl below 10 | Any resident Indian (one account per person) |
| Interest rate (Oct–Dec 2026) | 8.2% a year | 7.1% a year |
| Deposit per year | ₹250 to ₹1.5 lakh | ₹500 to ₹1.5 lakh |
| Tenure | 21 years (deposits for 15 years) | 15 years, extendable in 5-year blocks |
| Tax on deposit | 80C / Section 123, old regime only | 80C / Section 123, old regime only |
| Tax on interest and maturity | Fully exempt | Fully exempt |
| Partial withdrawal | 50% at 18 for higher education | Limited withdrawals after 7 years |
If the goal is saving for a daughter, SSY wins on rate — 8.2% against PPF’s 7.1% — and on purpose: the money is earmarked for her. For general long-term savings with no age condition, PPF stays the right choice. Many families run both: SSY for the daughter, PPF for themselves, within the shared ₹1.5 lakh deduction limit.
What changed and what stayed the same?
| Item | Old law (1961 Act) | New law (Income Tax Act, 2025) |
|---|---|---|
| Deposit deduction | Section 80C | Section 123 — same ₹1.5 lakh limit, same old-regime-only rule |
| Interest and maturity exemption | Section 10(11A) | Exemption continues; interest and maturity remain fully tax-free |
| New regime deduction | Not available | Still not available |
| Scheme rules (age, limits, tenure, rate) | As per SSY scheme rules | Unchanged — the scheme itself is not a tax-law change |
Nothing about the SSY scheme changed with the new Act. Only the section numbers moved. Any article claiming a new-regime SSY deduction under Section 123 is wrong.
Documents needed and how to open an SSY account
You need the account opening form (Form-1), the girl’s birth certificate, identity and address proof of the guardian (Aadhaar and PAN), and passport-size photographs. Since April 2023, Aadhaar is required for small savings accounts — an account opened without it must have the Aadhaar number submitted within six months or it gets frozen.
Steps to open:
- Visit the nearest post office or authorised bank branch with the documents.
- Fill Form-1 with the girl’s name, date of birth, and guardian details.
- Submit the form with the documents for verification.
- Make the first deposit (minimum ₹250) and collect the passbook.
The process usually takes 15 minutes at the counter. Keep the passbook safe — you will need it for every deposit and withdrawal.
Frequently asked questions
Is Sukanya Samriddhi Yojana tax-free?
Yes. SSY has full EEE status: deposits qualify for Section 80C deduction in the old regime, and the interest and maturity amount are fully tax-free in both regimes. There is no TDS on SSY interest or on the maturity payout.
Can I claim SSY deduction in the new tax regime?
No. The Section 80C deduction — now Section 123 under the Income Tax Act, 2025 — is available only in the old tax regime. If you file under the new regime, you get no deduction for SSY deposits, but your interest and maturity amount still stay fully tax-free.
What is the SSY interest rate in 2026?
The SSY interest rate is 8.2% a year for the October to December 2026 quarter, compounded annually. The government revises small savings rates every quarter, so check the latest notification before assuming the rate for a future quarter.
What is the maximum amount I can deposit in SSY per year?
You can deposit up to ₹1.5 lakh per financial year, with a minimum of ₹250 per year. Deposits are allowed for 15 years from the date of opening, and the account matures after 21 years.
Can I withdraw SSY money before maturity?
You can withdraw up to 50% of the previous year-end balance for the girl’s higher education once she turns 18 or passes Class 10, whichever is earlier. Full early closure is allowed only for her marriage after 18, on death, or on compassionate grounds after five years.
How many SSY accounts can a family open?
A family can open one account per girl child, for up to two girls. If twins or triplets are born, an extra account is allowed for the additional girl child. One girl can never hold two SSY accounts.
What happens if I miss an SSY deposit?
The account becomes defaulted, and you can revive it before maturity by paying ₹50 per year of default plus the ₹250 minimum deposit. Interest on the money already in the account keeps running; only the deposits you skipped earn nothing.
Is SSY better than PPF for my daughter?
For a daughter’s goal, yes — SSY pays 8.2% against PPF’s 7.1%, with the same EEE tax treatment. PPF is better only as a general savings tool, since anyone can open it and it can be extended beyond 15 years. If you have a daughter below 10, open SSY first and use PPF for your own savings.
Official sources
- Income Tax Department e-filing portal — deduction and exemption provisions: https://www.incometax.gov.in/
- India Post — Sukanya Samriddhi Account scheme rules and forms: https://www.indiapost.gov.in/
- Department of Economic Affairs, Ministry of Finance — quarterly small savings interest rate notifications: https://dea.gov.in/
Reviewed by Asuthod Rathod, CA
This guide was reviewed for tax accuracy by Asuthod Rathod, Chartered Accountant. Last updated: 30 October 2026.
Disclaimer: This article is for general information only and is not tax or investment advice. Interest rates are revised quarterly by the government, and section references follow the Income Tax Act, 2025 for Tax Year 2026-27. Check the latest notification and consult a Chartered Accountant for your specific situation.
Editorial byline for eircicai tax saving guides — covering 80C investments, ELSS, PPF, NPS, and regime comparison. Content is reviewed by Asuthod Rathod, CA.