Enter your daughter's age and yearly contribution. See what the SSY account is worth when she turns 21 and how much of that is tax-free interest.
The structure of SSY is unusual: you contribute for 15 years, then the account runs for another 6 years with no contributions and no withdrawals, compounding silently at 8.2%. Those last six years are often where half the total interest is earned. This SSY calculator shows the full picture: year-by-year growth, total invested, and the maturity amount when your daughter turns 21.
SSY launched in 2015 under the Beti Bachao Beti Padhao initiative and has since become the most financially efficient long-term savings product available in India for those eligible. The rate of 8.2% is currently the highest among all government small savings schemes, 1.1% above PPF and 0.5% above SCSS. The tax status is EEE: the annual contribution reduces your taxable income under Section 80C, the interest compounds tax-free throughout, and the maturity payout is fully tax-free. A family contributing Rs.1.5 lakh per year from when the daughter is born gets roughly Rs.69 lakh at maturity, of which Rs.47.5 lakh is tax-free interest.
Before opening the account or deciding how much to contribute, a few things worth working out:
SSY works in two phases. The contribution phase and the compounding phase:
Formula:
For years 1-15 (with contributions):
A = P × [(1 + r)^n - 1] / r × (1 + r)
For years 16-21 (no contributions, only interest):
A = Previous Balance × (1 + r)^remaining years
Variables:
Full worked example: Daughter is 5 years old, annual contribution Rs.50,000, rate 8.2%
Three things that affect the actual outcome:
The rate for FY 2024-25 is 8.2% per annum, the highest among all government small savings schemes. PPF earns 7.1% and NSC earns 7.7%. The rate is set quarterly by the government and the rate that applies at the time of each year's contribution is what that contribution earns for the full year. On an 8.2% tax-free annual return, a parent in the 30% tax bracket would need to find a taxable investment paying roughly 11.7% to match it. No FD or government bond comes close to that on an after-tax basis.
The minimum deposit is Rs.250 per year and the maximum is Rs.1,50,000 per year. Below Rs.250 in any financial year, the account gets classified as discontinued and fresh deposits are blocked until you reactivate. At the maximum Rs.1.5 lakh per year for 15 years, the total invested is Rs.22.5 lakh and the tax-free maturity corpus is approximately Rs.69 lakh, depending on when the account was opened and what rate applies. The full Rs.1.5 lakh qualifies for Section 80C deduction each year. If both parents file separately and one parent is the account holder, only that parent claims the deduction.
SSY is one of only three savings products in India with EEE tax status alongside PPF and EPF. The annual contribution, up to Rs.1.5 lakh, reduces taxable income under Section 80C. The interest accumulates without any annual tax, meaning you are never required to report SSY interest as income during the 21-year account period. The maturity payout is received entirely tax-free with no capital gains tax or TDS. The 50% partial withdrawal at age 18 for education is also tax-free. Under the new tax regime, the 80C deduction disappears, but the interest accumulation and maturity exemptions under Section 10(11A) still apply.
Either parent or a legal guardian opens the account on behalf of the girl child. The account must be opened before the girl's 10th birthday. Birth certificate is mandatory. Additional documents: parent's PAN card, Aadhaar, recent passport-size photographs, address proof, and the initial deposit of at least Rs.250. Once the girl turns 18, she takes over the account operation herself and the parents or guardians step back. One account per girl child, maximum two accounts per family. If twins or triplets include more than two girls, accounts for the third and beyond require a sworn affidavit confirming the birth was not through reproductive techniques.
Once the daughter turns 18, up to 50% of the balance at the end of the previous financial year is available for withdrawal. The purpose must be higher education or marriage. For education, you need proof of admission or a letter of admission to a recognised institution. For marriage, a wedding invitation is required and the marriage must be at least 30 days away. You withdraw the education amount in a lump sum or in annual instalments over a maximum of five years. Premature full closure for reasons other than the girl's death or a life-threatening medical emergency comes with an interest rate penalty: the account earns PPF rate instead of SSY rate for the entire holding period.
The account matures when the girl turns 21, provided the account has been open for at least 21 years from the opening date. Whichever is later applies. The daughter collects the full corpus at her bank or post office by submitting the maturity claim form, original passbook, and identity proof. The settlement typically takes 7 to 15 working days. If she is not ready to withdraw at 21, the account continues to earn interest at the prevailing SSY rate until she formally closes it or the account has been inactive beyond the grace period. The account does not auto-close on the maturity date.
For a girl child's education and marriage corpus, SSY wins on every financial metric compared to PPF. The rate is 1.1% higher (8.2% versus 7.1%). The account runs for 21 years versus PPF's 15-year lock-in. The 21-year compounding period on the same annual contribution produces a materially larger corpus. The full Rs.1.5 lakh annual contribution qualifies for 80C in SSY as it does in PPF. On Rs.50,000 per year from age 5, SSY produces roughly Rs.16.4 lakh at age 21. A PPF opened at birth and extended once matures at 20 years with approximately Rs.13 lakh on the same annual contribution. The difference, Rs.3.4 lakh, comes from both the higher rate and the longer compounding period. The practical strategy: maintain SSY for the girl's corpus and PPF separately for the parents' retirement.
Any post office or authorised bank accepts SSY applications. Banks that process SSY accounts include SBI, PNB, Bank of India, Canara Bank, ICICI, HDFC, Axis, and several cooperative banks. The account is backed by the Government of India regardless of where it is opened, so there is no safety difference between a post office account and a bank account. Many major banks now allow SSY account management through net banking or mobile apps, which makes deposit and balance tracking more convenient than a post office passbook. Passbooks are issued at both institutions.
SSY accounts transfer between any post office and any bank anywhere in India, free of charge and with no penalty. Submit a transfer request form at your current branch with the passbook and address proof. The current branch forwards the account to the new institution. The new branch issues a fresh passbook typically within 7 to 15 days. Interest continues to accrue normally during the transfer. No balance adjustment or interest recalculation is needed. This is useful for families who relocate frequently for employment.
If no deposit is made in a financial year, even the minimum Rs.250, the account is classified as discontinued. A discontinued account does not lose the interest already earned, but fresh deposits are blocked. To reactivate, pay a penalty of Rs.50 for each year the account was discontinued plus the minimum Rs.250 for each missed year. On a three-year gap, the reactivation cost is Rs.150 penalty plus Rs.750 minimum deposits, totalling Rs.900. This is a small amount but the compounding loss from not depositing the full annual amount across those three years is far more significant. Schedule an annual reminder for April or set up an auto-debit from your savings account.
If the girl child passes away, the account terminates on the date of death. The parents or guardians receive the full balance including all accrued interest, with no premature closure penalty. The process requires submitting the death certificate, account closure form, original passbook, and parent or guardian identity proof at the post office or bank. Settlement is typically completed in 30 to 45 days. Keep the account nomination updated. If no nomination is recorded and the account holder has passed, the family needs to provide additional documentation for the claim.
