SSY Calculator

Formula with Practical Example

The Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme designed to secure the financial future of a girl child. To calculate the maturity amount, our SSY Calculator uses a compound interest formula. Below, we explain the formula in detail and provide a practical example to help you understand how it works.

The Formula

The formula used to calculate the maturity amount under SSY is based on compound interest:

Maturity Value = Σ [Annual Deposit × (1 + Interest Rate)^{(21 - n)}]

Where:

• Annual Deposit: The amount deposited annually into the SSY account.
• Interest Rate: The current annual interest rate (e.g., 8.2% as of 2024).
• n: The year of deposit (starting from Year 1 up to Year 15).
• 21: Total duration of the scheme in years.

This formula calculates the compounded growth of each annual deposit over the 21-year period.

Practical Example

Let’s walk through a practical example to see how the formula works:

Scenario:

• Annual Deposit: ₹50,000
• Interest Rate: 8.2% per annum
• Duration of Deposits: 15 years
• Total Scheme Duration: 21 years

Step-by-Step Calculation

1. Year 1 Deposit:

   ₹50,000 × (1 + 0.082)^{(21 - 1)} = ₹50,000 × (1.082)²⁰ ≈ ₹2,36,997

2. Year 2 Deposit:

   ₹50,000 × (1 + 0.082)^{(21 - 2)} = ₹50,000 × (1.082)¹⁹ ≈ ₹2,18,897

3. Year 3 Deposit:

   ₹50,000 × (1 + 0.082)^{(21 - 3)} = ₹50,000 × (1.082)¹⁸ ≈ ₹2,02,289

4. Repeat for All 15 Years:

   Continue this calculation for each year up to Year 15. Each deposit grows for the remaining years of the scheme.

5. Total Maturity Amount:

   Add up the compounded values of all 15 deposits. For this example, the total maturity amount after 21 years would be approximately ₹20,45,000.

Key Insights from the Example

• Power of Compounding: Even though the annual deposit is only ₹50,000, the power of compounding at 8.2% results in a significant maturity amount of ₹20.45 lakhs.
• Tax-Free Returns: The entire maturity amount is tax-free under Section 10(10D) of the Income Tax Act.
• Long-Term Growth: Investments made in the early years grow exponentially due to the extended compounding period.

Why Use Our SSY Calculator?

While the manual calculation above provides insight into how SSY works, our SSY Calculator simplifies the process by:

• Saving Time: Instantly calculates maturity amounts without manual effort.
• Accuracy: Uses the latest RBI-approved interest rates and official formulas.
• Detailed Breakdown: Provides a year-by-year breakdown of deposits, interest earned, and maturity value.
• User-Friendly: Easy-to-use interface with no technical knowledge required.

Start using our SSY Calculator today to plan your daughter’s financial future with confidence!