SSY interest rate: How much should you invest to build a Rs 50 lakh corpus?

The Sukanya Samriddhi Account (SSA) is a government-backed small savings scheme launched under the 'Beti Bachao Beti Padhao' campaign. It is designed to help parents build a corpus for their girl child's education and marriage. With disciplined investing, the scheme can help accumulate a corpus of around Rs 50 lakh.

The Sukanya Samriddhi Account currently offers an 8.2% interest rate per annum, compounded annually. The interest rate is reviewed by the Finance Ministry every quarter. The current rate has been applicable since January 1, 2024.

An SSA account requires a minimum annual deposit of Rs 250 and allows a maximum investment of Rs 1.5 lakh per financial year. Deposits can be made for 15 years from the date of opening the account, while the account matures 21 years after opening.

If you invest Rs 1.05 lakh every financial year for 15 years and the interest rate remains 8.2% throughout the tenure, the SSA can generate an estimated maturity value of around Rs 50 lakh at the end of 21 years. Although contributions stop after 15 years, the corpus continues to earn compound interest for the remaining six years.

The illustration is based on these assumptions:
● Annual investment: Rs 1.05 lakh
● Investment period: 15 years
● Total investment: Rs 15.75 lakh
● Interest rate: 8.2% per annum
● Maturity period: 21 years
● Estimated maturity value: Around Rs 50.27 lakh
● Estimated interest earned: Around Rs 34.52 lakh
(Assuming the interest rate remains unchanged throughout the tenure.)

Interest is calculated every month on the lowest balance between the close of the fifth day and the end of the month. However, the interest is credited to the account at the end of each financial year.

An investor contributes to the SSA for 15 years. After that, no further investment is required, but the accumulated corpus continues to earn compound interest for the next six years. At the end of 21 years, the account holder can withdraw the maturity amount.

The Sukanya Samriddhi Account enjoys EEE (Exempt-Exempt-Exempt) tax status. Deposits qualify for a deduction under Section 80C of the Income Tax Act, 1961, up to Rs 1.5 lakh a financial year. In addition, both the interest earned and the maturity amount are tax-free, subject to the prevailing rules.