Sukanya Samriddhi Yojana interest rate

Sukanya Samriddhi Yojana current interest rate

For October to December, the rate is 8.2% a year. Compare this with 7.1% for PPF in the same quarter. The girl child scheme has generally been given a higher rate than PPF since it began, because the government treats it as a priority savings scheme for daughters.

Post offices and banks cannot add to or cut this rate. If any agent or app quotes a different Sukanya Samriddhi rate, check the India Post savings page or the Ministry of Finance notice for that quarter.

How the rate is decided each quarter

Small savings rates are linked, as a guide, to the yields on government bonds of a similar term during the previous months, with a margin added for each scheme. The Department of Economic Affairs announces the next quarter's rates shortly before it begins, and the Press Information Bureau carries the list.

The formula is a guide, not a rule. The government has often kept the Sukanya rate unchanged for many quarters even when bond yields moved. No one can say in advance what the next quarter's rate will be.

How interest is added to the account

1. For every calendar month, the office finds the lowest balance between the close of the 5th day and the last day of that month.
2. One month's interest is worked out on that lowest balance at one twelfth of the yearly rate.
3. The twelve monthly amounts are totalled when March closes and credited, rounded to the nearest rupee.
4. From the next year, that interest earns interest too.

Why the rate matters so much over 21 years

The account runs for 21 years, and the rate in each quarter applies to the whole balance. So small changes add up. Take a family that puts in 1.5 lakh rupees before 5 April every year for 15 years:

A half point gap shifts the result by nearly 5 lakh rupees. That is why projections should be read as estimates; real rates will vary quarter to quarter. Try your own figures in the Sukanya Samriddhi Yojana calculator.

Sukanya Samriddhi Yojana interest rate history

Since the account was launched, its rate has been revised many times, mostly in small steps, and it has usually sat above the PPF rate. During the quarterly review system the rate has moved up and down with bond yields and then stayed flat for long runs.

For the exact rate in any past quarter, for example to check old passbook entries, ask the post office or see the rate tables kept by the National Savings Institute. Past rates are useful for records but say nothing about what future quarters will bring.

Is Sukanya Samriddhi interest taxable

No. Interest credited to the account is exempt under Section 10(11A) of the Income Tax Act, and so is the amount paid at maturity. Deposits up to 1.5 lakh rupees a year count for the 80C deduction of the guardian who deposits, in the old tax regime only. There is no TDS on this interest.

Interest in special situations

• Default: an account where the yearly 250 rupees was missed still earns the scheme rate on the whole balance, and can be revived within 15 years.
• Death of the girl: the account is closed; scheme interest runs until the girl's death; from then until closure the savings account rate, now 4%, applies.
• Compassionate closure after five years for serious illness or the guardian's death: the account is settled with full scheme interest.
• After 21 years: the scheme notification fixes maturity at 21 years. Check with the post office about any money left beyond that date before you leave it there.

Withdrawal and closure rules are on the Sukanya Samriddhi withdrawal page.