Sukanya Samriddhi: what ₹1.5 lakh a year becomes

The rules that set the arithmetic

Sukanya Samriddhi Yojana (SSY) is the small-savings account for a daughter. Four rules decide what it grows to:

• Who and when. A parent or guardian opens it for a girl before her tenth birthday. A family can have two, one per daughter, with an exception for twins or triplets.
• How much. At least ₹250 and at most ₹1.5 lakh in each financial year.
• How long. Deposits run for 15 years from opening. The account matures 21 years from opening, not on her 21st birthday, so the last six years earn interest with nothing paid in.
• At what rate. 8.2% a year for the October–December quarter of FY 2026-27, compounded annually. Unlike NSC, where the purchase rate is locked, an SSY balance earns whatever is notified each quarter, so any 21-year projection at today's rate is a what-if.

The tax treatment is the best available: deposits count towards the ₹1.5 lakh deduction (the old section 80C, now section 123 of the Income-tax Act, 2025) under the old regime, and both the interest and the maturity amount are tax-free. Our SSY guide covers the background; this post is about the numbers.

What the deposits become

The SSY calculator assumes each year's deposit goes in at the start of the year and the rate holds. At 8.2%:

At a fixed rate the maturity value scales with the deposit, so every row ends at 3.19 times what was paid in. ₹12,000 a year is ₹1,000 a month, but the table assumes it goes in as one deposit each April.

Three things the table hides

The silent years do over a third of the work. On ₹1.5 lakh a year, the balance when deposits stop is ₹44,75,989. The six years after that add ₹27,06,130 with nothing paid in, 37.7% of the final ₹71,82,119. That is compounding at work, and it is why the 21-year clock matters more than the 15-year one.

When in the year you pay matters. Paid at the end of each year instead of the start, the same ₹1.5 lakh leaves ₹66,37,818 at maturity, ₹5,44,301 less. Money deposited earlier has longer to earn.

The rate will move. SSY's rate is reset quarterly and has changed many times. If it averaged 7.1%, the rate PPF carries today, for the whole 21 years, ₹1.5 lakh a year would end at ₹61,39,600, about ₹10.43 lakh less than the 8.2% projection. Treat the table as a range, not a promise.

Getting the money out

The account is in the daughter's name and the money is legally hers; she operates it herself from 18. There are three ways money comes out:

1. For higher education. Once she turns 18 or passes Class 10, up to 50% of the balance at the end of the previous financial year can be withdrawn.
2. For marriage. The account can be closed early for her marriage after she turns 18.
3. At maturity. 21 years from opening, the whole balance is paid out, tax-free.

Opening age sets the timing. An account opened at birth matures as she turns 21. One opened at nine matures at 30, long after most education bills. Take an account opened when she is three, with ₹1.5 lakh a year: she turns 18 around the time deposits stop, when the balance is about ₹44.76 lakh. Drawing half, roughly ₹22.38 lakh, for college leaves the rest to compound to about ₹35.91 lakh by maturity at 24, using the same 8.2%.

Hardship closures exist too, such as on the account holder's death, but SSY is not money to plan on reaching early.

Keeping the account alive

Missing the ₹250 minimum in a year puts the account in default. It can be regularised by paying the arrears plus a ₹50 penalty for each year missed. The real cost of a lapse is not the penalty but the deposits that did not compound: at 8.2%, the first year's ₹1.5 lakh is worth ₹7,84,989 at maturity, while the fifteenth year's is worth ₹2,60,425. Early deposits are the valuable ones.

Where SSY sits beside PPF and equity

PPF is the nearest relative. The same ₹1.5 lakh a year for 15 years in PPF at 7.1% grows to ₹40,68,209, against SSY's ₹44,75,989 at the same point. Both are exempt at every stage, and both draw on the same ₹1.5 lakh deduction limit. Putting the full ₹1.5 lakh into SSY leaves no deduction room for PPF or ELSS in the same year, as our 80C comparison shows; the section 80C calculator does the sum. PPF explained covers the differences in access.

Under the new regime there is no deduction, but the interest is still tax-free, which still beats a taxable deposit at the same rate. The old vs new regime calculator settles which you are on.

Education costs have historically risen faster than general prices. Our post on education cost inflation works through a goal 12 years out. The usual structure is SSY as the guaranteed floor with an equity SIP carrying the growth, whether in a diversified fund or one of the children's funds, as in investing for children's education. The child education calculator sizes the gap, and the PPF vs mutual fund calculator shows the trade between a fixed tax-free rate and a market-linked one. Because SSY interest is exempt, it also sidesteps the clubbing rules that apply to many other investments made in a child's name.

Rates and scheme rules are notified by the Ministry of Finance and can change; check the current terms on India Post before opening an account. This post explains the arithmetic and is not a recommendation.