Sukanya Samriddhi Yojana (SSY) is a monetary savings scheme provided to all families to help them endure the basic expenditures of raising a girl child, specifically her education.
It is a deposit scheme for the girl child introduced under the government campaign ‘Beti Bachao Beti Padhao’. It requires a minimum deposit of ₹1,000 and a maximum of ₹1.5 lakh during the on-going fiscal year.
A family can open them in any nearby post office or approved the division of commercial banks. The account will continue to operate for 21 years after the date of opening the account or until the date of marriage of the girl after she becomes 18.
If a girl wants to go for higher studies, after she turns 18, she can withdraw 50% of the balance available in the account.
Why Should You Invest In Sukanya Samriddhi Yojana?
Despite all the development Indian people have seen since 1947, there are still some parts in India where girls are not treated equal to a boy. They lack proper education and are forced to marry at a very early age. Therefore, the government is focusing on bringing financial independence to women throughout the backward areas of the country.
Sukanya Samriddhi Yojana assures an optimistic future for every Indian girl child. For those who cannot afford, Sukanya Samriddhi Yojana will cover their education and other fundamental expenditures. In addition, this scheme also provides major welfare in the form of investment options, tax savings, and return procedures.
Nevertheless, putting your money in Sukanya Samriddhi Yojana will not only offer financial benefits but also contribute greatly to the development of the female populace of the country.
Terms Associated With Sukanya Samriddhi Scheme Account
The person who deposits the money in Sukanya Samriddhi Yojana account on behalf of a minor girl child while acting as her guardian under the rules.
The post office in India which also functions as a savings bank and is approved to open an SSY account according to the rules.
It is any branch of a commercial bank, which has been approved by the Government.
16 Things you need to know when opting to invest in Sukanya Samriddhi Yojana scheme
1. Opening an Account under SSY
The Sukanya Samriddhi Yojana account can be opened for a maximum of 2 girls of the eligible age from a family. A mother or father or a legal guardian can open the account in the name of the girl any time after the girl is born to until she reaches the age of 10. This scheme is now also accessible for adopted daughters.
2. What are the documents required to open an Sukanya Samriddhi Yojana account?
When a person wants to open an account under Sukanya Samriddhi Yojana, he or she needs to submit some necessary documents in order to open the account. These documents are mandatory in order to open an SSY account with a bank or post office. Given below is the list of documents:
- The application form to open the account under Sukanya Samriddhi Yojana scheme.
- Birth Certificate of the girl child under whose name the account opening application has been submitted.
- Identity proof and residential address proof of the girl child’s parents or legal guardian.
3. What makes a girl eligible for Sukanya Samriddhi Yojana account?
The girl child must be an Indian resident all through the time period of the scheme. In the event that the girl’s residency changes during the period of the SSY scheme, no interest will be paid from the date of change and the account will be shut ahead of time.
4. For how long can the deposits be made?
Now the deposits can be done for 15 years from the date the account was opened. Before that, the tenure was 14 years.
5. What are the methods of investment?
A parent or the legal guardian of the girl can deposit the money in the form of cash or cheque. Moreover, deposits can also be transferred using electronic means but only if the concerning bank or post office offers an online transfer facility.
6. How is the amount of interest receivable calculated?
To evaluate the interest every month, the lowermost amount between the time period of 10th and the end of the month is considered. Interest rates payables through with Sukanya Samriddhi Yojana scheme are reviewed every quarter, just like any other small savings scheme. According to that rule, until June 2016, the deposits were earning 8.6% interest, whereas, during 2015-16, it was 9.2%.
7. What amount can be deposited every year?
The minimum amount that can be deposited in an Sukanya Samriddhi Yojana account is ₹1,000 and the maximum amount is ₹1.5 lakh every year. Any amount deposited in excess of ₹1.5 lakh will not receive any interest. Moreover, the excess amount can be taken out anytime.
8. What is the penalty in the event of non-payment of the annual deposit?
If the depositor fails to pay the minimum amount of ₹1,000 every year, it will be considered as ‘in default’ status for the account. If the default status lasts for 15 years, the rate of interest payable will be equal to the interest rate of post office savings account.
However, in case the default occurs due to the demise of the guardian of the girl who is the account holder, the account will continue to earn interest based on interest rate reported by the Government.
9. How can the normalizing of a default account be done?
In case your account is ‘in default’ status, you can bring it back to normal status by compensating a fine of ₹50 for every year, for the number of years the account has been ‘in default’ status. Along with the fine, the minimum specified deposit must also be made for the years of default.
10. What are the taxes benefits?
The amount, which is deposited under SSY scheme, is entitled to deduction under Section 80C of Income-tax Act 1961 and it enjoys Exempt-Exempt-Exempt (EEE) tax regime under section 80C. The tax deduction is allowed up to ₹1.5 Lakhs and any amount deposited in excess of ₹1.5 lakhs will not be liable for deductions.
11. When does the Sukanya Samriddhi Yojana investment mature?
The SSY account matures when 21 years are completed since the date on which the account was opened. Once the maturity period is over, no additional interests are paid on the deposited amount even if the account is not closed on the maturity date. Before the changes were made, interest was paid until the date account was closed.
Before the rules concerning the maturity period of the Sukanya Samriddhi Yojana investment were changed, the account was supposed closed at the time when the girl who was also the account holder got married. On the other hand, as per the new guidelines, the account can remain open until the age of 21, even if the girl gets married before that.
12. Is Sukanya Samriddhi Yojana account transferrable to another bank or post office?
Yes, the account can now be transferred to different authorized banks and post offices just by paying a small payment of ₹100 as a fee. However, if the transfer needs to be done because of the change in residential address, then an evidence of the change of residence address must be submitted with the transfer application. No fee will be charged in that case.
13. How can the withdrawals be made?
Previously, one could take out 50% of the total balance of the account for education purpose, given that the girl must be 18 year of age or above and must have passed 10th Standard. However, at the present, the amount can be withdrawn based on the real fees payable for an educational course. The amount can be taken out at once or it can be withdrawn in the form of annual installments during the course of five years.
In case the girl child gets married, the total balance of the account can be withdrawn one month before the marriage takes place or three months after the marriage date. During the withdrawal, it is necessary to submit the age proof with the purpose of proving that the girl is not under the age of 18.
14. Under what circumstances does the premature closure of the account take place?
Previously, premature closing of an account could be accomplished at any point in time. However, under the current regulations, it is not allowed before the end of the first five years from the date the account was opened. But then again if there is any extreme situation like a life-threatening disease of the account holder or the demise of the guardian, they can withdraw the money. Under those situations, the rate of interest paid will be equal to the interest rate payable on the post office savings.
15. What are the documents required at the time of the closure of the account?
Similar to opening an account, closing an account also require certain necessary documents. Given below is the list of mandatory documents required:
- An application form that must be submitted for closing the account.
- Identity proof, residential address proof, and citizenship proof
16. How is the rate of interest on deposits calculated?
The government decides the interest rates on a three-monthly basis, based on the G-sec yields. The rate of interest that the Sukanya Samriddhi Yojana offers during the G-sec rate of comparable maturity is 75 basis points. The rate of interest since the day the SSY scheme was launched is as follows:
From April 1- 2014 to March 31- 2015- 9.1%
From April 1, 2015 to March 31, 2016- 9.2%
From April 1, 2016 to June 30, 2016: 8.6%
From July 1, 2016 to September 30, 2016: 8.6%
From October 1, 2016 to December 31, 2016: 8.5%
Interest Rates for FY 2017-18 is 8.3%
Interest rate notified by the government that is compounded annually is credited to the SSY account until it finishes 15 years. It is imperative to remember that all the withdrawals that are made from the SSY account should be done exclusively in the name of the girl child.