To promote the welfare of the girl child, the government of India launched the Sukanya Samriddhi Yojana. It is a part of a very famous campaign of the government- “Beti Padhao Beti Bachao”. The SSY is a small deposit scheme for the girl child which has become fairly popular due to two major reasons-
→ It brings a maximum tax benefit of Rs 1.5 lakh under section 80C of the Income-tax Act.
→ Also, the interest accrued and maturity amount is tax-free.
When the scheme was launched in January 2015, the minimum deposit that one can make was Rs. 1000. But in a recent amendment made to this scheme, you can invest in SSY with a nominal Rs. 250 only. And this can go to a maximum of Rs. 1,50,000. This scheme is only applicable for parents and legal guardians of girls who are under 10 years of age. The rate of interest for the scheme is calculated on a yearly basis and compounded annually. Although, the rate of interest is not fixed for the entire tenure. It is reset every year.
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Here is everything that has changed in the Sukanya Samriddhi Yojana-
Penalties:
From the time the scheme was launched, missing a payment to this account accrues a penalty of Rs. 50. An addition to this penalty, now if a guardian misses the payment they also lose on the interests. Now the account will be treated as an ‘Account in Default’ if you miss a payment. Failure to regularise such an account within fifteen years of opening the account would result in the entire deposit to generate interest in accordance to the Post Office savings scheme (which is currently fixed at 4%) instead of the 8.1% of the SSY scheme. This would also include the deposits made before the default date.
E-transfer Facility:
The parents or legal guardians of the girl child whose account has been opened under Sukanya Samriddhi Yojana can link their bank account to the scheme. This would mean that they can make the annual transaction from their bank account itself. They do not need to visit the bank personally making the process easier and comfortable.
Interest Rates:
Earlier the interest rate for Sukanya Samriddhi Yojana was 9.2%. In this quarter, the rate would be 8.1% up to September. Please take note that the interest rate for the Sukanya Samriddhi Yojana keeps changing from time to time which makes it different from FDs and RDs. Also, the interest rate will now be calculated on the 10th of every month instead of 5th.
The interest rate since its launch is as follows:
| From April 1, 2014 |
9.1% |
| From April 1, 2015 |
9.2% |
| From April 1, 2016-June 30, 2016 |
8.6% |
| From July 1, 2016 -September 30, 2016 |
8.6% |
| From October 1, 2016-December 31, 2016 |
8.5% |
| From July 1, 2017- December 31, 2017 |
8.3% |
| From January 1, 2018 – March 31, 2018 |
8.1% |
| From April 1, 2018 -June 30, 2018 |
8.1% |
| From July 1, 2018 -September 30, 2018 |
8.1% |
Eligibility Criteria:
The girl child for whom the account is being opened has to be a citizen of India. NRIs would not be able to enjoy the benefits of the Sukanya Samriddhi Yojana. The girl child must reside in India from the time the account is opened till the maturity or closure of the account. In case there is any change in residential status after the opening of the account under the SSY scheme, the designated bank or post office has to be informed within one month. In such a case, the earnings will be returned to the government, with the balance being returned to the investor. Also, in a progressive step, now this scheme is open for parents of adopted children.
Premature Closure:
The lock-in period for the Sukanya Samriddhi Yojana is 5 years. You can not prematurely close the account before this time has elapsed. However, in case you still want to withdraw your investment before the lock-in period, the interest that you will earn will be at par with the post office savings of 4% account and not the one linked with SSY scheme of 8.1%.
Investment Tenure:
Earlier the investment tenure was 14 years. Now, this has increased by a year. The new investment tenure is 15 years.
After the aforementioned change, let see the current terms of the Sukanya Samriddhi Yojana.
Sukanya Samriddhi Yojana At a Glance-
| Who can open the account |
Parents or legal guardians of girl children who are resident Indians. |
| Maximum Investment Tenure |
15 years |
| Maximum/Minimum Investment |
Rs. 1000/Rs.150000 in a financial year |
| Mode of Deposit |
Cash/Cheque/ Demand Draft/ Transfer/ online transfers through Internet Banking |
| Lock in Period |
First 5 years of investment. If withdrawn prematurely, the interest rate is at par with PO savings scheme. |
| Penalty |
Rs.50 penalty. Also, the interest is par with P. O. interest rate on deposit if not regularised. |
| Interest Calculation Date |
10th of every month |
| Withdrawal |
Can withdraw 50% when the child turns 18 for higher education or for marriage-related expenses. |
| Maximum Number of Accounts |
Up to two girl children or three in the case of twin girls as second birth or the first birth itself results in three girl children |
| Tax Rebate |
No tax on the amount invested, earned as interest and/or withdrawn. |
The Sukanya Samriddhi Yojana is a wonderful means to invest for your daughter and get tax benefits at the same time. We hope that now you have a clear picture in mind, about the scheme. If there are any questions lingering in your mind regarding this topic, you can ask us in the comments below. Until next time!
