All You Need to Know About Sukanya Samriddhi Yojana

As a part of the government backed ‘Beti Bachao, Beti Padhao Yojana’ campaign, the Sukanya Samriddhi Yojana (SSY) account can be started by parents of a girl child below the age of 10 for their brighter future through facilitating for their education. It is also aimed at supporting their marriage expenses.

Over time, the account has turned out to be one of the most popular savings schemes for the Indian girl child.

Here are a few facts about the Sukanya Samriddhi Yojana. Have a look:

Account Eligibility

An SSY account can be opened with the post office or other authorised banks by parents of a girl child under or until she attains 10 years of age. There can only be one account opened for a single child, however in case of twins or triplets, then an account for the third child can also be opened.

The basic documents of the birth certificate, identity and residential proof of the child are required to open an account. A one year of age relaxation was introduced in 2015 when the scheme was introduced.

Deposit Amount

The minimum initial deposit amount has been reduced to Rs 250 from Rs 1,000. Every year a deposit in the multiples of Rs 100 needs to be made. For a financial year a minimum of Rs 250 and a maximum limit of Rs 1.5 lakh has to be deposited. From the opening date till the next 14 years deposits can be made; in order to obtain maximum interest, it is preferred to deposit before the fifth day of every month. However, there are no limits to the number of deposits to be made in a financial year.

The deposits can be made via electronic transfers, cash, cheques or demand drafts. In case of demand drafts, the day of encashment will be considered as the date of credit.

Rate of Interest

The interest rate for the SSY scheme varies. The government declares the rate every quarter for small savings schemes such as SSY and PPF on the basis of the G-sec yields. The compound interest then is credited to the account. As per July 2018, the interest rate for July- September was 8.1 per cent.

Transfer of Accounts

The account can be transferred anywhere in India if the girl child shifts from the place of her origin.

Account Operation

The parents or any legal guardian of the child can operate the account until the age of 10, post which the child herself can have access to her account.

Penalty

In case theminimum deposit for a financial year isnot met a fine of Rs 50 per year will be levied. And if the penalty amount is also not paid, then a 4 per cent interest will be added to the deposited amount which is the prevailing interest rate at the post office savings bank. Also, if an extra interest rate is paid, then there shall be a reversal of the same.

Maturity Period

The maturity date of the SSY scheme is either at the age of 21 or the date of the girl child’s marriage, whichever comes earlier. The account closes at the turning of 21 years of age and in case the account is not closed, the balance will earn interest. However, this is dependent on the specifications put forward by the scheme from time to time.

In case of the demise of the child, the account is immediately shut down on producing the death certificate. The money along with the interest earned till the preceding month of premature closing will be handed over to the parents or the legal guardian of the child.

Fund Withdrawal

On the attainment of 18 years of age, 50 per cent of the amount can be withdrawn and used for higher studies. The remaining amount can be withdrawn at 21. Unlike PPF, the SSY does not offer any loan facility.

Tax Benefits

The investments under SSY are exempted under Section 80C of the Income Tax Act. Rs1.5 lakh, every year is qualified for income tax deduction. However, similar to the PPF, the interest income and maturity amount is totally tax free, making it a desirable investment option for a girl child.