Sukanya Samriddhi Yojana: Can non-resident Indians invest in this high-yield savings scheme?

The Sukanya Samriddhi Yojana (SSY) is one of the most popular government-backed small savings schemes in India, designed to secure the financial future of girl children. Aimed at meeting their higher education and marriage expenses, this scheme offers a highly attractive interest rate and excellent tax benefits, making it a go-to investment option for many parents.

Eligibility and account opening rules
Parents or legal guardians can open a Sukanya Samriddhi Yojana account in the name of a girl child before she attains the age of 10. These accounts can be opened at any authorised post office branch or designated commercial banks. A family is generally allowed to open accounts for a maximum of two girls, with only one account permitted per child. However, exceptions are made for triplets or twins born during the second delivery, allowing families to open more than two accounts under specific conditions.

Deposit limits and maturity details
To keep the account active, a minimum deposit of ₹250 is required every financial year, while the maximum investment limit is capped at ₹1.5 lakh annually. Deposits do not need to be made monthly; investors can contribute any amount in multiples of ₹250 whenever convenient. The scheme requires contributions for a period of 15 years, while the total maturity period of the account is 21 years. Even after the 15-year payment period ends, the account continues to remain active and earn interest until maturity. Currently, the government offers a highly competitive interest rate of 8.2% per annum on these deposits.

Dealing with defaults and withdrawal rules
If a parent fails to deposit the minimum amount of ₹250 in a financial year, the account will become inactive. Fortunately, it can be easily revived by paying a nominal penalty of ₹50 along with the minimum deposit amount. Once the girl child turns 18 or completes her Class 10 education, partial withdrawals are permitted to fund her education or wedding expenses. The funds can be withdrawn either in a lump sum or in instalments.

Can non-resident Indians invest in Sukanya Samriddhi Yojana?
A crucial eligibility criterion for the scheme is that the beneficiary girl child must be an Indian citizen residing in India. Consequently, Non-Resident Indians (NRIs) are not eligible to open a Sukanya Samriddhi Yojana account. If a resident Indian opens an account and subsequently acquires NRI status or moves abroad, they are obligated to inform the respective bank or post office immediately. The account status and interest applicability will then be reviewed based on the prevailing guidelines.

Triple tax benefits
One of the biggest draws of this government scheme is its tax-exempt status. Sukanya Samriddhi Yojana falls under the exempt-exempt-exempt (EEE) tax category. This means that the principal invested, the interest earned, and the final maturity amount are completely exempt from income tax. Furthermore, the deposits made towards the account are eligible for tax deductions of up to ₹1.5 lakh under Section 80C of the Income Tax Act.