The Narendra Modi government has made a significant move by raising the interest rates on the Sukanya Samriddhi Yojana (SSY) scheme just before the 2024 Lok Sabha elections. The interest rates have been increased by 20 basis points for the January-March quarter, making it 8.2 percent, up from the previous 8 percent.
This change was announced through a finance ministry circular. The Sukanya Samriddhi scheme, a popular savings option primarily operated by post offices, experiences adjustments in its interest rate every quarter.
Benefits of Sukanya Samridhi Yojana (SSY):
- Guaranteed Returns: SSY, being a government-backed scheme, offers guaranteed returns to its investors.
- Income Tax Benefits: Investors can claim income tax benefits on investments of up to ₹1.50 lakh in an SSY account within a single financial year, under Section 80C of the Income Tax Act.
- Tax-Free Interest: The interest generated through the Sukanya Samriddhi Account (SSA) remains tax-free.
- Contribution Limits: The minimum annual contribution to the Sukanya Samriddhi Account is ₹250, while the maximum contribution allowed is ₹1.5 lakh in a financial year.
Sukanya Samriddhi Account Withdrawal and Maturity Rules:
Upon reaching 18 years of age, guardians have the flexibility to withdraw up to 50% of the balance in the account within a financial year. The Department of Posts has laid down regulations allowing withdrawals to be made in a single transaction or installments, with a maximum of one withdrawal per year, up to a limit of 5 years.
Apart from the SSY scheme, the government has also increased the interest rates for the three-year term deposit scheme by 10 basis points for the January-March quarter. The new rate for the 3-year term deposit stands at 7.1 percent, up from the previous 7 percent.
Here are the latest interest rates for various small savings schemes for the January-March 2024 quarter:
- PPF – 7.1%
- SCSS – 8.2%
- Sukanya Yojana – 8.2%
- NSC – 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 RD – 6.7%
These adjustments in interest rates reflect the government’s efforts to provide attractive savings opportunities for citizens in the lead-up to the 2024 Lok Sabha election.