The Sukanya Samriddhi Yojana (SSY) interest rate, currently at 8.2% per annum for April-June 2025, is a key factor in its popularity as a government-backed savings scheme for girl children. Launched in 2015 under the “Beti Bachao, Beti Padhao” campaign, SSY offers higher returns than schemes like PPF, with tax-free interest and maturity amounts. This article covers the current and historical SSY interest rates, calculation methods, tax benefits, and their impact on maturity value, helping parents plan for their daughter’s future.
SSY Interest Rate Overview
The SSY interest rate is central to its appeal, offering a high, government-guaranteed return for securing a girl child’s financial future. At 8.2% per annum, it outperforms other savings schemes like Public Provident Fund (PPF) at 7.1% and bank fixed deposits (FDs) at 6-7%. This competitive rate, combined with tax exemptions, makes SSY a preferred choice for funding education and marriage expenses. By leveraging compounding over 21 years, the interest rate helps build a substantial corpus, ensuring long-term financial stability.
Current Interest Rate and Revisions
Current Rate
As of the April-June 2025 quarter, the SSY interest rate is 8.2% per annum, compounded annually.
Rate Determination
- Authority: Set by the Ministry of Finance, Government of India.
- Frequency: Reviewed and revised quarterly based on economic conditions.
- Basis: Linked to Government Security (G-Sec) yields, ensuring competitive returns.
Where to Find the Latest Rate
- India Post Website: www.indiapost.gov.in provides quarterly updates.
- Authorized Banks: Websites of banks like SBI, HDFC, and Axis Bank list current rates.
- Financial News Portals: Sites like Economic Times and Paisabazaar offer timely updates.
How SSY Interest is Calculated
Compounding Frequency
Interest is compounded annually, credited at the end of each financial year (March 31).
Monthly Calculation Basis
- Interest is calculated on the lowest balance in the account between the close of the fifth day and the end of the month.
- Deposits made on or before the 5th of the month earn interest for that month; later deposits earn from the next month.
Importance of Timing
Depositing before the 5th maximizes interest by ensuring the full deposit is considered in the lowest balance calculation.
Compounding Formula
The maturity amount is calculated using:
A = P(1 + r/n)^(nt)
- A: Amount at maturity
- P: Principal (total deposits)
- r: Annual interest rate (e.g., 0.082 for 8.2%)
- n: Number of times interest compounds per year (1 for annually)
- t: Tenure in years (up to 21)
This formula accounts for annual compounding, making manual calculations complex but accurate with SSY calculators.
Historical SSY Interest Rates
Overview Since Inception (Jan 2015)
Since its launch, SSY rates have fluctuated but remained competitive:
- High: 9.2% in 2015-16, reflecting high G-Sec yields.
- Low: 7.6% in 2020-21, due to economic slowdown.
- Stability: Rates stabilized around 8-8.2% since 2023.
Trend Analysis
SSY consistently offers higher rates than PPF and NSC, making it a top choice for risk-free savings. Quarterly revisions ensure alignment with market conditions, balancing investor returns and government fiscal goals.
Historical Rates Table
| Period | Interest Rate (%) |
|---|---|
| Jan 2015–Mar 2016 | 9.1–9.2 |
| Apr 2016–Mar 2017 | 8.5–8.6 |
| Apr 2017–Mar 2018 | 8.3–8.4 |
| Apr 2018–Mar 2019 | 8.1–8.5 |
| Apr 2019–Mar 2020 | 8.4–8.5 |
| Apr 2020–Mar 2021 | 7.6 |
| Apr 2021–Mar 2022 | 7.6 |
| Apr 2022–Mar 2023 | 7.6–8.0 |
| Apr 2023–Mar 2024 | 8.0–8.2 |
| Apr 2024–Jun 2025 | 8.2 |
Tax Benefits Related to Interest
EEE Status
SSY enjoys Exempt-Exempt-Exempt (EEE) tax benefits:
- Deposits: Deductible up to ₹1.5 lakh annually under Section 80C.
- Interest: Fully tax-exempt under Section 10 of the Income Tax Act.
- Maturity Amount: Tax-free, including principal and interest.
Significance
Tax-free interest enhances effective returns, significantly boosting wealth creation over 21 years. For example, a ₹1.5 lakh annual deposit at 8.2% yields ₹65.93 lakh tax-free at maturity, compared to taxable schemes where returns are reduced by 20-30% tax.
Impact of Interest Rate on Maturity Value
Power of Compounding
Over 21 years, annual compounding at 8.2% significantly grows the corpus. Small, regular deposits benefit from exponential growth, ideal for long-term goals like education or marriage.
Illustrative Scenarios
Assuming 8.2% constant rate and no withdrawals:
- Minimum Deposit (₹250/year for 15 years):
Total Deposit: ₹3,750
Maturity (21 years): ₹10,974 (Interest: ₹7,224) - Moderate Deposit (₹10,000/year for 15 years):
Total Deposit: ₹1,50,000
Maturity: ₹4,39,891 (Interest: ₹2,89,891) - Maximum Deposit (₹1.5 lakh/year for 15 years):
Total Deposit: ₹22,50,000
Maturity: ₹65,93,071 (Interest: ₹43,43,071)
Calculated using SSY calculators.
Role of SSY Calculators
Online calculators from banks (e.g., HDFC, SBI) or portals (e.g., Paisabazaar) estimate maturity values based on deposit amount, tenure, and current rate. They simplify planning by projecting returns for various scenarios.
Scenarios Affecting Interest Calculation/Payment
Defaulted Accounts
- Condition: If the minimum ₹250 annual deposit is not made, the account defaults.
- Impact: Existing balance earns interest at the prevailing rate, but no new deposits are accepted.
- Reactivation: Pay ₹50 penalty per default year plus ₹250 arrears per year.
- Excess Deposits: Deposits over ₹1.5 lakh annually earn no interest.
Premature Closure
- Allowed Cases: Death of the account holder or life-threatening illness. Interest at SSY rate applies until closure.
- Other Cases: Non-specified closures (e.g., NRI status) earn Post Office Savings Account rate (4% as of 2025) from deposit date to closure.
- Impact: Reduced returns if closed early for non-eligible reasons.
Summary
The SSY interest rate of 8.2% for April-June 2025, combined with tax-free returns and annual compounding, makes it a highly attractive scheme for securing a girl child’s future. Its competitive edge over PPF and FDs, quarterly revisions, and EEE tax benefits ensure robust wealth creation over 21 years. By depositing before the 5th of each month and using SSY calculators, parents can maximize returns for education and marriage goals.
FAQs
The current interest rate is 8.2% per annum for April-June 2025.
It is revised quarterly by the Ministry of Finance.
Interest is compounded annually on the lowest balance between the 5th day and month-end, credited at financial year-end.
No, it varies quarterly based on G-Sec yields.
Yes, SSY has EEE status, so deposits, interest, and maturity amounts are tax-exempt.
No, deposits after the 5th earn interest from the next month.
Check India Post, authorized bank websites, or financial portals like Paisabazaar.
Yes, the existing balance earns interest, but the account remains inactive until reactivated.
For death or illness, SSY rate applies until closure; otherwise, Post Office Savings Account rate (4%) applies.
SSY’s 8.2% is higher than PPF’s 7.1%, making it more attractive.
Yes, online calculators from banks or financial portals project maturity based on deposits and current rate.
