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How to Calculate Sukanya Samriddhi Yojana

28 Jun 2023

What is Sukanya Samriddhi Yojana?

The Indian government launched the Sukanya Samriddhi Yojana (SSY) under its campaign - Beti Bachao, Beti Padhao. The scheme allows parents to open a savings account for their daughter with an authorized commercial bank or an India Post branch. Parents can use this invested money for the girl’s higher education or wedding expenses. 

Before learning how to calculate the Sukanya Samriddhi Yojana interest earning, it is essential to understand how the account earns returns. SSY accounts offer an attractive interest rate of 8%. You can deposit a minimum of Rs. 250 and a maximum of Rs. 1,50,000 per financial year for 15 years. The scheme matures on the completion of 21 years from the account’s opening date or until the girl child’s marriage after 18. 

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The deposits in an SSY account help you avail of a tax deduction of up to Rs. 1,50,000 per year (Section 80C of the Income Tax Act, 1961). You can withdraw a maximum of 50% of the deposit for the girl’s higher education expenses. Please note that at the time of withdrawal, the girl child for whom the account was opened should have either passed class 10th or turned 18. The interest earned on the deposits and the amount withdrawn on maturity are tax-free. 

How to calculate Sukanya Samriddhi Yojana?

To calculate the interest you will earn and the maturity value of your SSY account, you can use the manual formula given below:

A = P(1 + r/n) ^nt

where,

A refers to compound interest

P is the principal amount

r is the interest rate

n is the frequency at which interest is compounded annually

t refers to the tenure

For instance, you deposited Rs. 1,50,000 every year for 15 years, and the compounded rate of interest is 8% per annum. The closing balance of the SSY account at the end of 15 years will be Rs. 43,98,642. But the maturity amount is calculated for 21 years. So, when the maturity period ends, the girl child will receive Rs. 69,80,093. 

As you can see, SSY account calculation involves the compound interest formula, making the process complicated. To prevent errors and see instant and accurate results, you can rely on an SSY calculator

How to use the SSY calculator?

The calculator requires simple details like the yearly invested amount, the age of the girl child, and starting year of the investment. Once you enter these details and click Calculate or Submit, the results will display within seconds. 

Before you use the calculator to understand how much you will receive when the SSY account matures, it is vital to ensure that you meet the scheme’s eligibility criteria. 

  • The girl is a resident of India. 
  • The girl is not more than 10 years old. 
  • You can open up to two SSY accounts for two girl children.

If you cannot set aside a large amount of money, you keep the account operational by depositing only the minimum amount of Rs. 250 per year for 15 years. 

Benefits of using the SSY calculator

  • The tool is available online, which means you can use it at any time from anywhere. 
  • It is easy to use, and you do not require any prior technical knowledge or mathematical expertise.
  • The calculator completes calculations instantly and delivers results within seconds. 
  • The results are error-free, ensuring you do not make any investment mistakes. 
  • You can use the calculator as many times as desired. 
  • It is updated with the prevailing interest rates for ease of calculation. 

Summing up

The Government of India introduced an initiative known as Sukanya Samriddhi Yojana in 2015. It aims to give the girl child a secure future. It attracts returns at an interest rate of 8% and offers attractive tax benefits under Section 80C of the Income Tax Act 1961. The interest is compounded annually, and the scheme matures 21 years after its opening date. 

Since investing in an SSY account is long-term, you must plan the investments ahead. Learning how to calculate the Sukanya Samriddhi Yojana closing balance through manual calculation or an online calculator is a great way to start. 

 

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