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Business News/ Money / Personal Finance/  Have you missed SSY investment contribution? Here's how to reactivate an inactive account
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Have you missed SSY investment contribution? Here's how to reactivate an inactive account

You have the option to reopen a terminated Sukanya Samriddhi Yojana (SSY) account, provided it has been closed for less than three years. Beyond this three-year threshold, the account loses its eligibility for revival.

How to re-activate your default SSY investment?Premium
How to re-activate your default SSY investment?

Experiencing the freezing of savings or investment accounts can be distressing for numerous individuals, particularly those who are unfamiliar with the regulations pertaining to banking and investments. An increasing number of investors are turning towards market-linked funds instead of opting for government-sponsored schemes such as the Sukanya Samriddhi Scheme (SSY). This shift is primarily driven by apprehension regarding the freezing of investments in the latter.

For those unfamiliar, SSY is a government-backed savings program specifically crafted to safeguard the future of girls. It provides a variety of advantages, including:

Elevated interest rate: The present annual interest rate for SSY stands at 8%, compounded annually. This rate is notably higher compared to the interest rates provided by the majority of other savings schemes.

Tax advantages: Contributions to an SSY account qualify for tax deductions under Section 80C of the Income Tax Act, 1961. Furthermore, the total amount received upon maturity is exempt from taxation.

Extended investment horizon: The scheme is a long-term investment plan, featuring a maturity period of 21 years. This characteristic renders it well-suited for strategically planning for significant expenses like a daughter’s education or marriage.

Adaptable investment option: Parents have the flexibility to deposit any sum ranging from 250 to Rs. 1.5 lakh annually into an SSY account. Additionally, they can opt for monthly installment payments.

Convenient initiation: Opening SSY accounts is hassle-free and can be done at any post office or bank branch that provides the scheme.

Persisting with substantial investments in this scheme enables the accumulation of a significant fund for your child’s future. Yet, if you cannot make the minimum annual deposit in your SSY account, the account will go inactive. Nonetheless, you can reactivate the account by undertaking the following steps:

  • Head to the post office or bank branch where the account was initially opened.
  • Submit a written request outlining the revival of the account, including details such as the account holder's name, account number, and the reason for the default.
  • Settle the necessary penalty and arrears. The penalty stands at 50 for each year of default, and the arrears encompass the minimum annual deposit amount, i.e., 250, for each year of default.
  • Upon the payment of the penalty and arrears, the account will be reinstated, allowing you to resume making deposits into the account.

You must consider the following additional points too.

  • An SSY account is revivable only if it has been inactive for less than three years.
  • Once the account surpasses three years of inactivity, it loses eligibility for revival.
  • Failure to revive the account within six months of becoming inactive results in forfeiture, with the remaining balance being transferred to the government.

This scheme is ideal for investors seeking assured returns without exposure to market fluctuations. Additionally, it offers the advantage of compounding on the invested amount. This means that not only do you earn interest on the principal amount, but also on the accumulated interest. In such circumstances, substantial profits can be realized through this scheme. Investors must thus take care to ensure that the accounts are continued, albeit with small amounts, to ensure the continued security of their children’s financial future. 

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Published: 01 Dec 2023, 11:15 AM IST
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