Should you continue Sukanya Samriddhi Yojana after becoming NRI?

By / October 15, 2024

Are you eligible to continue Sukanya Samriddhi Yojana after becoming NRI? As there is no clarity on this front, many NRIs are confused.

SSY or Sukanya Samriddhi Yojana is one of the best debt instruments launched by the government for a girl child. I have written various posts on this. You can refer them all –

Now in this post, I will not dwell much on the rules, regulations, and features of SSY. Instead, I will concentrate on the main topic of this post which is – Are you eligible to continue Sukanya Samriddhi Yojana after becoming NRI?

Many investors are already aware that an SSY account is not eligible for NRIs. However, the confusion is whether one should close the SSY account once the status of the girl child changes to NRI or not.

Are you eligible to continue Sukanya Samriddhi Yojana after becoming NRI?

Let us look into the 2016 notification and 2019 (the latest one) notification of SSY rules. The gazette notification dated 18th March 2016 has these lines. Note that in SSY, beneficiary and account holder means a girl child.

“Beneficiary” means an eligible girl child who is a resident Indian citizen at the time of opening of the account and remains so till the maturity or closure of the Account;

If, after the opening of an Account, the Account holder becomes a non-citizen or non-resident of India, intimation to this effect shall be given by the guardian or the Account holder to the post office or the Bank concerned, as the case may be, within a period of one month from the date of such status of the Account holder’s citizenship or resident status.

It is clear from this 2016 notification that once the girl child’s status changes from resident to non-resident, then you are not allowed to continue the SSY account.

However, the confusion started after the publication of the 2019 gazette notification on SSY (Notified vide G.S.R. 914(E) dated 12/12/2019 and further amended vide G.S.R. 288(E) dated 05/05/2020) In this notification, the government was silent about what should investors do who opened the SSY and later turned into NRI.

However, in one such RTI reply, the National Savings Institute referred to the below lines to interpret the rules.

RTI on SSY

Referring to point 4, it is mentioned that even if the account holder turns into NRI, the SSY account will continue to earn interest as usual up to maturity. However, point 5, which I wrongly interpreted earlier that it’s applicable to NRIs is wrong. It refers to the citizens of India. However, as per Indian law, a “Non-Resident Indian” (NRI) is considered a citizen of India, meaning that even though they reside outside the country, they still hold Indian citizenship according to the Citizenship Act, 1955; essentially, an NRI is an Indian citizen living abroad.

I have one more proof to cross-check. It is the Post Office’s internal circular, where they mentioned as below.

“In this connection, it is clarified that if the account holder or guardian or both becomes NRI subsequently after opening the account under National (Small) Savings Schemes including Sukanya Samriddhi Account in accordance with the provisions in Rules 4 (3) of Government Savings Promotion General Rules 2018 and accordingly, SSA account shall be operated till its maturity under the provisions of SSA Scheme 2019 if the account holder/guardian turns NRI.“

Here, they are referring to two notifications. One is from 2018 and another is from 2019 (which I have referred to above). If you cautiously check the “Rules 4 (3) of Government Savings Promotion General Rules 2018”, then it’s actually the same which is available in the RTI reply (Image shared above).

“If a depositor in a single account, or any of the depositors in a joint account, or either the guardian of a minor or person of unsound mind or minor depositor, as the case may be, subsequently becomes Non-resident Indian during the period the account is in operation, the account may be continued till its maturity and the benefits available to the depositor in the said account shall be available only on non-repatriation basis and the account shall not be allowed to be extended or continued beyond maturity, even if such extension or continuation is and otherwise permissible, and no interest shall be payable after the date of its maturity.“

By referring to all these notifications from 2014, 2019 (subsequent 2020 notification), the RTI reply of the National Savings Institute, and the Post Office internal circular, we can clearly conclude that if during the account opening the status of the girl child is resident and later her status changes into non-resident, then SSY account can be continued till maturity and such accounts are eligible to earn the applicable interest rates.

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29 thoughts on “Should you continue Sukanya Samriddhi Yojana after becoming NRI?”

  1. Chaitra

    We moved to Netherland in 2019. It was opened when we visited India in 2022, Account guardian being my husband. My Father in law wanted to open SSY account in post office. We didn’t knew it was not meant for NRIs. Even Post office staff didn’t say so.

    What should we do now? What will happen to the amount and interest if we close now?

    Thanks.

    Reply
  2. shiva

    Hi Team,

    First of all thank you for providing this information.

    My daughter became Canadian Citizen. Now her SSY account is blocked due to KYC. We are not holding any Aadhaar. Do the SBI bank consider Canadian Citizen passport along with the OCI card. Please suggest!

    Reply
  3. Saurabh Kukreja

    Hi,

    Thank you for providing information that NRI can continue with SSY account if account was opened as resident Indian.
    I have opened SSY account for my daughter when she was 2 year old and we become NRI when she is 7+ years and will be NRI for 5 years.
    Now when we are checking on SBI bank website and also with bank officials they are saying that SSY account will stop earning interest from date of become NRI. As they are referring the rules mentioned on their website https://sbnri.com/blog/nri-investment/sukanya-samriddhi-yojana-for-nri

    How can i make them understand that I can continue investing in this account till maturity. Please help in this regard. Thanks in Advance!

    Regards,
    Saurabh Kukreja

    Reply
  4. Arpit

    Hi, Thanks for detailing this.

    However it states a NRI csn continue the policy but if the person has acquired citizenship of any other country then it should be pre-maturily closed. I see you have stated to people who mentioned they acquired Australian citizenship that they can continue it, which I am doubtful about.

    Can you please clarify specifically about cases where child has acquired other country citizenship after opening of this account?

    Many Thanks.

    Reply
  5. Srini

    Hi., So i started as soon as my baby born, Now its been 2 years (I paid Max full amount for 2 year ie 1.5Lpa) and one year before we (All my family) came to UAE and been settled here, now can i continue my saving scheme or how could be?? any expert advice please

    Reply
  6. Nitin

    We have acquired Australian Citizenship for both parents as well as the girl child (SSY account holder). Should the account be pre-closed?

    Reply
  7. SK

    Sir, thank you very much for the explanation. We got our green card in US an year ago. We may become citizens in 5 years. At that time, should I close the account?

    Reply
  8. E. Manikandan

    I’m having SSY account for my daughter, i became NRI but my daughter is resident. Now my daughters SSY account is linked with SB account of Axis, but since i became NRI, this SB has to be converted to NRO account. Will there be any problem for contributing to SSY account of my daughter from NRO?

    Reply
    1. BasuNivesh

      Dear Ram,
      OCIs are treated as NRIs for taxation purpose. Hence, the same rule of NRIs will be applicable to them too.

      Reply
  10. Somendra

    Sukanya Samridhi Account Rules 2014, superseded by SSAR 2016, are different from Sukanya Samridhi Account Scheme 2019, amended in 2020. The subsequent ‘Scheme’ did not supersede the earlier ‘Rule’, but altogether a new Scheme and account opened under this scheme effective from 2.12.2019 will be governed by this Scheme.
    So, A/c opened under earlier SSAR-2014 (superseded by SSAR 2016) will be governed by that rule and SSAS-2019 provisions has no bearing on that. In fact SSAS-2019 has no provision regarding NRI. NRI provision was introduced in SSAR-2016 (which superseded 2014 Rule) and still valid as this Rule has not been amended or rescinded. The screenshot attached in your article showing ‘Rule 9 -Payment of interest’ seems to be relating to some other saving scheme and not relating to SSY.
    Your response will be appreciated. Thanks.

    Reply
  11. Barath

    This is very useful. Thanks a lot. Can we continue contributing if the account was created when the child was resident and later parents and child became NRI’s or we can just continue account without contributing?

    Reply
    1. BasuNivesh

      Dear Manish,
      In case of SSY, it is child NRI status which matters a lot. Hence, if child is Resident Indian, then you can continue.

      Reply
  14. Navneet Chauhan

    Hi, can we continue contribution after becoming NRI? Account was opened when we were Resident Indian and 5 years later moved outside.
    Now, can we continue contributing as we’ll be going back to India after 1 or w years.
    Kindly clarify.
    Thanks

    Reply
  15. Phani Kiran

    Thanks for the post. But is it possible to withdraw if we want after becoming NRI?
    Also if we follow the option of continuing, should minimum contribution per month needs to be made to be eligible to earn the applicable interest?

    Reply
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