Overview about Sukanya Samriddhi Yojana (SSY)
Sukanya Samriddhi Yojana/Scheme is one of the most popular government schemes launched by the Indian Prime Minister, Shri. Narendra Modi. The scheme is aimed at betterment of girl child in the country. Sukanya Samriddhi scheme has been launched to offer a means of saving to the girl child in every family. The money saved via this scheme is to provide for higher education of girl and for her wedding expenses. The scheme has been accepted very well by the public since this is a great step towards providing financial security and financial dependence to women.
Gender inequality is one of the most pressing issues in the country today and hence, this scheme is being seen as a great step towards eliminating gender related issues. In a country like India, where education of male child is given preference and where wedding expense of girls is seen as a great liability, the launch of this girl child specific is a massive step. The scheme will help girls achieve financial independence and help them have money at hand for higher education as well as wedding expenses. One of the most distinguishing features of the scheme is that Sukanya Samriddhi deposit amount can only be withdrawn by the girl child and not even the depositor (parent or guardian) is allowed to withdraw money on behalf of the girl.
There are a host of public and private sector banks as well as post offices which have been authorized by the Finance Ministry for offering Sukanya Samriddhi Account. The scheme was launched in January, 2015 and since then seen a huge surge in the number of customers who have applied for it.
Features and Benefits of Sukanya Samriddhi Account
Since the time of inception and launch of the scheme, financial experts have debated the relevance and benefits of this scheme. One of the most commendable steps taken with respect to Sukanya Samriddhi scheme is the choice of banks and post offices as promoters and facilitators. Banks, especially public sector banks as well as post offices in India have one of the highest penetration in terms of covering the rural and urban locations. Hence, leveraging this network of banks and post offices is a good step towards ensuring inclusion of all economic and geographical sections of the Indian society.
There are several advantages of availing the Sukanya Samriddhi Scheme. Some of the most significant benefits of this scheme are listed here.
- Attractive rate of interest of 8.6% per annum which is more than that offered by most other schemes in the market. This rate is to be revised by the Finance Ministry every year in the month of April. Last year the interest rate was as high as 9.2%. Any changes related to rate will then be communicated to the account holders.
- Investments made under the Sukanya Samriddhi Scheme are exempt from income tax under section 80C of the Income Tax Act, 1961
- Once the girl child attains the age of 18 years, partial withdrawals on account of marriage or higher studies are allowed
- The account can be opened by the parent or guardian of the girl child and can be operated on her behalf until she reaches the age of 18
- Sukanya Samriddhi Scheme can be availed for any girl child who is 10 years old or less
- Birth certificate of the girl child is the main document that is required to open the Sukanya Samriddhi Account
- The maturity period of the account is 21 years from the date of opening the account
- Payment towards this scheme needs to be made for 14 years. After that the benefits continue to accrue until the 21st year of the policy
- The maximum amount that can be deposited in an account, under this scheme is Rs.1,50,000
- This scheme can be opened at any of the authorized banks or at any post office
- The Sukanya Samriddhi scheme is a transferable deposit scheme and as such it can be transferred from one authorized bank to another and from post office to any authorized bank and vice versa
- Only one Sukanya Samriddhi Account can be availed in the name of one girl child. Multiple accounts are not allowed and if found are liable to hefty penalty.
- Up to 50% of the deposit amount can be prematurely withdrawn once the girl reaches the age of 18 years
- A penalty fee of Rs.50 is levied in case the account is not credited with the relevant amount by the due date
- Sukanya Samriddhi Account can be closed only when the girl child attains 21 years of age. If the account is not closed and the money is not withdrawn even after the child turns 21 then the account continues to earn interest
How to Open Sukanya Samriddhi Account
Post offices in India have a huge presence and a well spread network of branches. Their penetration is especially remarkable in the rural areas. Hence, post offices are one of the foremost channels of spread and maintenance of small savings schemes. Sukanya Samriddhi scheme also can be availed at any of the post offices across all states of the country. Rural areas in India especially see a lower literacy rate among women as compared to the urban areas and hence, popularization of the scheme in such areas is a major aim of the Finance Ministry.
Sukanya Samriddhi Account can be opened at not just any post office but also at any of the public or private authorized banks in the country. The form for the scheme can be availed at any of these offices and can be filled and submitted along with relevant documents. The bank or post office will then verify the filled in details and approve the account opening. The account can be opened by legal guardian or parents of the girl child. The depositor also is either of the two. Sukanya Samriddhi Scheme comes from the Ministry of Finance and is aimed at uplifting the financial status of women in the country and to aid in their education and development.
Interest Rate on Sukanya Samriddhi Account
Sukanya Samriddhi Scheme offers an attractive rate of interest to account holders in order to facilitate and popularize the scheme. The current rate of interest being offered by the government of 8.4% per annum. It was 9.1%, when it was introduced in FY 2015-16.
Eligibility Criteria for Opening Sukanya Samriddhi Account
Like any other deposit account, availing Sukanya Samriddhi Account too requires a certain set of eligibility criteria to be met. The most basic being the age of the girl child under whose name the scheme is being availed.
Sukanya Samriddhi Scheme can be availed by parents or legal guardians of a girl child on behalf of the girl child. The Account is opened in the name of the child and is operated by parents or legal guardians. Following is the eligibility requirement to obtain the scheme.
- Scheme can be availed any time before girl child reaches the age of 10 years
- As a grace period, any girl child born between 2nd February 2003 and 1st December 2015 is also eligible to obtain the account under this scheme
Documents Required to Open Sukanya Samriddhi Account
A fixed set of documents are required in order to open a Sukanya Samriddhi Account. These documents need to be submitted to either bank or post office. Along with these documents, a duly filled application form also needs to be submitted. The list of required documents is mentioned below.
- Sukanya Samriddhi Account Opening Form
- Birth Certificate of girl child (Account Beneficiary)
- Identity Proof of depositor (Parent or legal guardian)
- PAN card, Ration card, Driving License, Passport
- Address Proof of depositor (Parent or legal guardian)
- Passport, Ration Card, Electricity Bill, Telephone Bill, Driving License
Sukanya Samriddhi Scheme Application Form
The application form for Sukanya Samriddhi Scheme is hosted online on all the authorized bank websites as well as on the post office websites. Alternatively, the hard copy of the form is available at all post offices as well as authorized bank branches. The form consists of personal details like name, age etc. of the accountholder and identity details and address details. The rest of the form is for official use by banks or post offices.
The application form can be downloaded from any of the above mentioned websites and can then be printed and filled so as to speed up the process of account opening.
Sukanya Samriddhi Account Opening in Post Office
Sukanya Samriddhi Account can be opened by customers both at banks as well as at post offices. The advantages and features of the scheme remain the same whether it is availed via an authorized bank or via post office.
You can walk into any of your nearest post office and fill in the Sukanya Samriddhi Application form and submit it along with relevant documents to avail the scheme. The documents required and the form remain the same for both post offices as well as authorized banks. Both these entities are facilitators of this government scheme and hence play a key role in popularization of the scheme and dissipation of relevant information.
The initial deposit amount required is Rs.1000 at the time of account opening. Installments after that can be a minimum of Rs.100 and thereafter in multiples of Rs.100. There is no maximum limit to the number of times you can deposit money into your Sukanya Samriddhi Account. Like banks, post offices too, furnish account passbook for tracking the account transactions. Although, the Sukanya Samriddhi Scheme is availed in the name of a girl child, the presence of the child is not required at the time of account opening. The opening of the scheme can be done in the presence of legal guardian or parents whose signatures are required at the time of availing the Sukanya Samriddhi Scheme.
List of Authorized Banks for Sukanya Samriddhi Scheme
Listed below are all the authorized banks (public and private both) which have been granted permission by the Finance Ministry to officially open and maintain Sukanya Samriddhi Accounts.
- Allahabad Bank
- Andhra Bank
- Axis Bank
- Bank of Baroda (BoB)
- Bank of India (BoI)
- Bank of Maharashtra (BoM)
- Canara Bank
- Central Bank of India (CBI)
- Corporation Bank
- Dena Bank
- ICICI Bank
- IDBI Bank
- Indian Bank
- Indian Overseas Bank (IOB)
- Oriental Bank of Commerce (OBC)
- Punjab National Bank (PNB)
- Punjab & Sind Bank (PSB)
- Syndicate Bank
- UCO Bank
- Union Bank of India
- United Bank of India
- Vijaya Bank
- State Bank of India (SBI)
- State Bank of Patiala (SBP)
- State Bank of Bikaner & Jaipur (SBBJ)
- State Bank of Travancore (SBT)
- State Bank of Hyderabad (SBH)
- State Bank of Mysore (SBM)
Sukanya Samriddhi Account Rules and Guidelines
Since, the Sukanya Samriddhi Scheme is a government issued scheme, there are set rules and guidelines that apply to this account no matter where this scheme is availed from. Be it banks or post offices, customers at both these centers are required to follow the following rules and guidelines for operation of this account. Let us look into some of the most important rules that customers need to abide by while availing and maintaining Sukanya Samriddhi Scheme.
Premature closure of Sukanya Samriddhi Account
Premature closure of Sukanya Samriddhi Account is permissible under specific circumstances like death of the girl child who is the accountholder. Under such situations, the account will be closed and the proceedings of the same will be handed over to the legal guardian or parents of the girl child. This will be done on furnishing a valid death certificate in the name of the accountholder.
The second situation or premature closure of the scheme is when the central government feels that it is becoming increasingly difficult or rather almost impossible for the parent or guardian to carry forward the scheme. Permission for the same is to be issued by the central government under extreme conditions where a medical exigency or a serious illness plagues the guardian or the parent of the accountholder.
Withdrawal rules applicable to Sukanya Samriddhi Account
100% withdrawal of deposit amount is only possible once the girl child attains the age of 21. Partial withdrawal is permissible for up to 50% of the deposit amount after the girl child has attained the age of 18 year. This partial withdrawal is allowed only if the money is required for tending to some serious medical illness or on account of higher education or marriage expense of the girl child.
Permissible withdrawal amount under the Sukanya Samriddhi Scheme
Withdrawal of deposit amount is allowed only if the account has been active for at least 14 years. Only up to 50% of the deposit amount can be withdrawn after the girl child reaches the age of 18 years and before she reaches 21 years of age. No withdrawal, partial or otherwise is allowed in case the girl child is below 18 years of age.
Account closure for Sukanya Samriddhi Scheme
Sukanya Samriddhi Account can be closed only once the girl child has reached the age of 21. Any premature closure is allowed only under exceptional circumstances that are mentioned in the above section.
The most important rule regarding Sukanya Samriddhi Scheme is that any kind of withdrawal can be made only by the girl child in whose name the account has been availed. This feature is believed to lend a lot of financial freedom to women in future. One very important point about the scheme is that the account ceases to operate once the girl gets married. Also, 100% amount withdrawal can be made only by the girl and that too when she reaches the age of 21 years.
Tax Benefits on Sukanya Samriddhi Yojana
Sukanya Samriddhi Yojana is not just a scheme that benefits girl child in the country but also her parents or legal guardians who operate the account on their daughter’s behalf. Tax benefit under section 80C of the Income Tax Act are applicable on deposits made towards Sukanya Samriddhi scheme. This offers a huge incentive to taxpayers to avail the scheme for their daughters. This serves a two-way purpose of improving the financial status of girls in the country as well as offering tax relief to people who avail this scheme.
However, like all deductions under section 80C, the maximum limit for tax deductible amount for Sukanya Samriddhi scheme too is Rs.1,50,000 per year. Any amount deposited over and above this figure does not attract any tax rebate.
Transfer of Existing Sukanya Samriddhi Account
With the current trend of more inclusive and more coupled education and job structure, there are many times an individual may need to move from one location to another. Since, deposits under Sukanya Samriddhi Account can only be made by visiting bank or post office, and cannot be made online from anywhere, hence the government has factored-in the transferability of the scheme from one location to another and from post office to bank and also from one bank to another.
Sukanya Samriddhi Account can be moved from post office to any authorized bank by filling up a transfer form for the scheme. This feature has been offered by the Finance Ministry to make the scheme as hassle free as possible. Minimum amount of hassle will ensure that the scheme remains popular and the number of account holders does not dwindle owing to reasons that are not serious enough. Not just this, the account can be transferred from one location to another within the country as well as from one authorized bank to another based on customer preference.
As a result, any account holder of the Sukanya Samriddhi scheme can move his or her scheme from post office to an authorized bank by following the following steps.
- Visit the post office where your Sukanya Samriddhi Scheme is currently open. The girl child (beneficiary) is not required to accompany her parents or guardians
- Surrender the passbook received by you at the time of account opening
- Inform the executive at the post office that you wish to close your account at the post office and move it to a particular bank
- It is now the responsibility of the bank executive to get your account closed at the post office and get it opened at the bank by transferring the relevant documents and details
- Visit the bank branch where you have transferred your Sukanya Samriddhi Account and submit relevant documents and well as forms furnished to you by the post office authorities
- A new passbook will then be issued by the bank. This will carry forward your previous account balance details
- The new Sukanya Samriddhi Account will then be opened at the bank and you can begin your transactions
Similar steps are carried out for transfer of Sukanya Samriddhi account from one bank to another and from one location to another.
Carrying KYC document copies is one sure way of cutting down on your visits to the bank or post office. This will hasten the process of transfer and reduce the hassles associated with multiple visits to the bank. There are many people who got their Sukanya Samriddhi schemes opened at post offices since at the time of launch, post offices were the first promoters to open the scheme to public. Post this, authorized banks too started rolling out the scheme to customers and as such many customers wished to transfer their accounts to banks. This is also because banks offer easier and faster deposit of money as compared to post offices and hence are more convenient for customers.
Advantages of Sukanya Samriddhi Scheme
There are certain amazing advantages associated with Sukanya Samriddhi scheme launched by Honorable Prime Minister Shri Narendra Modi. Let us look into a few of these features that aim to make this scheme popular and profitable.
- One of highest interest rates is being offered on Sukanya Samriddhi scheme out of all the other financial products in the market
- Tax benefits under section 80C make this scheme lucrative for not just the girl child but her parents or guardians too
- Maturity amount to be given directly to the girl child ruling out all possible discrepancies in last mile delivery
- Even after the account completes 14 years of tenure, interest gets accrued until the child turns 21 years of age
- Girl child who is mature to understand operation of account is free to handle the account on her own
- The best part about Sukanya Samriddhi Scheme is that it is an agent-free scheme and as such people can directly reach out to authorized banks and post offices to fill up application form and avail the scheme. No middleman is required to lead you through the process of account opening.
- No fixed number of deposits in a single year apart from the minimum yearly amount required Rs.1000 and the maximum amount limit of Rs.1.5 lakhs.
- Sukanya Samriddhi scheme has been given the EEE tax status in budget 2015 which means that the scheme is available for tax exemption in all its stages namely, deposit, growth and withdrawal. This in short means that the scheme is 100% tax free.
- Flexibility in terms of the amount of deposit and the frequency of deposit is an essential feature of Sukanya Samriddhi scheme. People from all economic sections can thus avail this scheme without feeling bound by regular installments or fixed amounts of deposit. Deposits to Sukanya Samriddhi account can be made as and when convenient to the accountholder
Disadvantages or Shortcomings of Sukanya Samriddhi Scheme
Apart from the various great features and benefits that the scheme offers, there are a few drawbacks associated with the scheme which may deter some if not many users. Like all financial schemes in the market there are pluses and minuses with Sukanya Samriddhi scheme too. However, experts are of the view that the number of advantages of the scheme surely outnumber the disadvantages of this scheme. Listed below are a few of these drawbacks that have been talked about by industry experts.
- The lock-in period of the deposit amount is quite long as compared to other financial products currently in the market
- The scheme can be availed by any parent or guardian for a maximum of number of two girl child. So if a couple has 3 or more daughters, the benefit cannot be availed for all.
- The scheme does not offer the facility of online submission of amount and hence can prove taxing to tech-savvy individuals. Deposits to the account can be made either via cheque or cash or demand draft only
- The rate of interest being offered currently is not fixed and is to be revised every year in the month of April. Experts are of the view that the rate may dwindle in future since currently the scheme has been in the launch phase and hence higher rate of interest is being offered to popularize it among citizens
- Deposits made under Sukanya Samriddhi Account do not offer the added benefit of availing loan against them.
Terms Related to Sukanya Samriddhi Scheme
Since Sukanya Samriddhi Scheme is a newly launched government scheme, to understand the essence of the scheme it is essential that we know all major terms associated with the scheme. Listed below are these terms along with their meaning in the context of the scheme.
Depositor is any legal guardian or parent who opens Sukanya Samriddhi Account on behalf of the girl child and deposits money in it
Guardian is any person who is either father or mother of the girl child or a person entitled under law to take care of property of minor until she reaches the age of 18 years. This is valid when neither of the parents of girl child are alive or are incapable of acting.
- One for one
Sukanya Samriddhi Yojana can be availed for girl child only. One such account per girl child is permissible. More than one account cannot be held by the same beneficiary.
- For third girl
Sukanya Samriddhi scheme can be availed only for a maximum of two girl child per couple. However, in case the first or the second births result in twin girls being born, the scheme is extended to the third girl child too by furnishing relevant proofs of twin birth.
Sukanya Samriddhi Online Calculator
As for almost all other financial products, there are online calculators available for Sukanya Samriddhi too. These are not official calculators launched by the Finance Ministry but are just technological tools that help customers estimate the returns earned on investments made under Sukanya Samriddhi Scheme.
Most Sukanya Samriddhi calculators available online host an excel sheet that is used to fill in details like intended amount of deposit and the frequency of these deposits. The excel sheet formula will then calculate the amount of returns that you can earn on your invested amount. These calculators are great tools to let customers evaluate their returns and modify their deposit amounts and deposit frequency accordingly. This is especially crucial to Sukanya Samriddhi Scheme since this scheme is totally flexible and hence the deposit amount as well as frequency both are in the hands of the depositor.
One of the most prominent drawbacks of Sukanya Samriddhi calculator is that you will need to change manually the rate of interest every time it is updated by the Ministry of Finance. Also, since the calculator is manually set up it may or may not limit the amount of annual deposit and hence can furnish returns even if the deposit amount entered is greater than Rs.1.5 lakh for a particular year.
How to Open Sukanya Samriddhi Account Online
Sukanya Samriddhi Account can only be opened by visiting any of the authorized bank branches or any of your nearest post offices. Online application of the scheme cannot be made by people. Also, online transfer of amount is not permissible under this scheme. This might prove disadvantageous to customers who are used to transacting online using the online banking platforms of banks.
Sukanya Samriddhi Yojana vs Public Provident Fund
Since both Sukanya Samriddhi Yojana as well as PPF are small savings schemes, hence comparison of the two schemes is natural. However, the two schemes are both same as well as different with respect to quite a few significant points. Listed below are some of the prominent points that set these schemes apart from each other as well as those that make these schemes seem similar.
- One of the starkest points of differentiation between the two schemes is their aim. Sukanya Samriddhi Yojana is aimed at general welfare and financial independence of the girl child while PPF is a long-term investment tool which aims to generate corpus for long-term financial goals like retirement.
- Also, while the minimum deposit amount in a year for PPF is Rs.100, it is Rs.1000 for Sukanya Samriddhi Yojana (SSY). Since SSY is aimed at financial inclusion of girl child, the minimum deposit amount has been kept as low as possible to let as many girls benefit from the scheme, as is possible.
- Both the schemes, however, can be opened at any of the authorized banks or post offices.
- There is a huge overlap in the list of authorized banks for PPF and those for SSY. This is also because these banks have a greater reach and a deeper penetration across all locations in the country.
- Both these schemes offer tax benefit under section 80C of the Income Tax Act.
- Interest calculation method used by the finance Ministry is the same for both Sukanya Samriddhi Scheme as well as PPF
The most significant differentiator between Sukanya Samriddhi Scheme and PPF is that the former is a financial scheme which lends a purpose to the accountholder. Whereas the money received on PPF maturity can be used by the accountholder towards any financial need like construction of house, buying property, an exotic vacation etc. The sense of purpose associated with Sukanya Samriddhi Scheme makes it a more definite and focused investment option for improving the financial status of girl child in the country. However, Sukanya Samriddhi scheme is a debt-based scheme and hence the returns earned on the scheme are not as substantial as other financial schemes that are more aggressive in nature. Also, the returns earned on Sukanya Samriddhi scheme in the tenure of around 14 years are not enough to cover education expense at that point of time. Hence, Sukanya Samriddhi scheme is best availed in combination with other financial products that are more aggressive in nature like equity-based schemes offered by banks in India.
In the case of the Sukanya Samriddhi Yojana savings scheme, is it possible to invest a lump sum every month?
Yes, it is possible to invest a lump sum in the Sukanya Samriddhi Yojana savings scheme. You can start by making an initial investment of Rs.1,000 and then make lump sum contributions, though the limit for investment in this saving scheme is Rs.1.5 lakh per annum. At an effective interest rate at 9.2%, a subscriber can make multiple contributions that are tax exempt under section 80C. Even the maturity amount under this section is tax exempt. Parents or legal guardians can open a Sukanya Samriddhi account for a girl child who is ten years old or below, not after.
Sukanya Samriddhi Chart
The Sukanya Samriddhi Yojana which was introduced by the Modi-led government at the start of 2015 focused on the need to save funds for girl children. Girl children who are often neglected in the country were for the first time put under the spotlight. In order to lure parents and legal guardians into the scheme to save for the future of their girl child - be it for their education, marriage, etc. - the government brought out the saving scheme with an attractive interest rate of 9.1%. When the girl child attains the age of 21, she can redeem the savings for her future. The Sukanya Samriddhi chart displays the savings yearly and the final return when the account matures. That said, the chart is based on a few factors:
- The interest rate is assumed at 9.1% through the 21 years
- Contributions are made year around, reaching the limit of Rs.1.5 lakh every year.
- It assumes a fixed contribution every year.
- Contributions revolve around the financial year.
- There are no withdrawals made during this 21 year period.
- The account matures when the girl child turns 21 - assuming the account has been opened since the birth of the child. That said, contributions in this scheme can be made only for 14 years. After that, the interest works in improving your return upon maturation of the account.
|Year||Interest Rate||Opening balance||Yearly investment||Interest @ 9.1% at the end of the year||Balance at the end of the year|
Sukanya Samriddhi Yojana vs Public Provident Fund
Ever since the introduction of the SSY saving scheme for girl children came about, investors have been weighing the odds as to which scheme would turn out to be a more profitable. While the SSY has a better interest rate on the standing amount in the account, PPF has a lot more flexibility. Looking at the differences, here are some facts that might help you decide which saving scheme to invest in:
- Both the saving schemes have fixed interest rates, the interest rate for SSY is fixed at 9.10% and PPF is fixed at 8.7%. In this regard, SSY seems the better option.
- SSY account withdrawals are free from tax, though withdrawals can be made only when the girl child turns 18 years. PPF withdrawals are subject to tax and TDS.
- For PPF, upon maturity the account holder can extend the tenure how many ever times for a period of 5 years at a time. With regard to SSY, the account holder can make a one time seven year extension after 14 years.
- Deposits towards PPF accounts can be made via online transaction, cash, DD, etc. Deposits towards SSY can be made only by cash or DD. For SSY account holders, online services are not available.
- For SSY account holders, a 50% withdrawal can be made only when the girl turns 18 years old. PPF account holders can make multiple withdrawals (every seven years from the opening of the account)which are subject to tax. Having said that, a PPF account holder can make a complete withdrawal only when the account has matured.
- SSY pertains only girl children, whereas for PPF accounts all Indian citizens and NRIs are eligible for the scheme.
- PPF account holders can nominate any amount of people (including minors), but the SSY is restricted to two girl children. In the SSY, each girl child has a separate account where the deposit limit for the year is curtailed to Rs.1.5lakh. For PPF accounts, accounts in the name of minors have a collective deposit limit of Rs.1.5 lakh per year.
- The minimum deposit for PPF is Rs.500, whereas for SSY it is Rs.1,000.
- A subscriber can open a PPF account with Rs.100 only as the initial contribution, for SSY the minimum initial contribution is Rs.1,000.
- After three years of opening a PPF account, the account holder can have a loan against the account. There is no such option of having a loan against your account for SSY.
Sukanya Samriddhi Customer Care number
For those wanting to make queries regarding SSY, there is a dedicated toll free number 1800 -223-060. For those looking for help, advice on the procedures that come with SSY and claims regarding withdrawals, contributions and so on, the customer care unit at the end of the toll free number will offer their services and help you navigate through the whole procedure.
Sukanya Samriddhi e-Payment
Unlike PF accounts and several other saving schemes, the SSY saving scheme for girl children in the country does not have a dedicated member portal to make contributions, withdrawals, check the balance and so on. Due to this, making e payments directly to the SSY is not an available option at the moment. For those who still want to make payments or contributions online, the subscriber will have to link their post office account to their bank account and then make the payment.
Sukanya Samriddhi Khata Form 1
The high interest rate and the fact that withdrawals are tax exempt has made parents and legal guardians of girl children interested in the scheme. Rather than park money in their savings account for the future of their child, now considering the fixed interest rate at 9.10%, parents are now considering the SSY as an investment option for their child. To do so, parents can either download the SSY opening account application form online or they can get their hands on it at any post office across the country. The application form contains crucial details pertaining to the girl child and the parents or the legal guardians. The details are:
- Name of the post office
- Date of opening the account
- Type of account
- Amount of initial deposit. It is mandatory for SSY accounts that the initial deposit is Rs1,000
- Mode of initial deposit: Cash or DD
- Name of the depositor with address
- Details of the minor:
- Date of birth
- Date of maturity (When the child will turn 18 years old)
- Relationship with the minor (Biological parent or legal guardian)
- Signature of the parent or the legal guardian
Parents will then have to provide proof of identification (Aadhaar card, Passport, Driving license, etc.). The girl child doesn't have to to present at the time when the account details have been opened. Though, valid authentication of the relationship has to be provided.
Sukanya Samriddhi nominee
Unlike other saving schemes, for the SSY there is no such thing as a nomination. Having said that, in case of death or disability of either of the parties - parents or the girl child - certain criteria has to be followed.
Instance where the girl child has died:
- In this case, the account should be immediately closed.
- The contributions with the accrued interest will then be given back to the parent or the legal guardian making the contribution.
- Instance where the parent or legal guardian making the contribution has died:
- The total amount in the account (with the interest rate returns) will be transferred to the girl or her family.
- In other cases, the contributions will stop, but the interest rate on the standing amount will accrue, which can be redeemed by the girl child upon maturity - when she has turned 21 years old.
Since the SSY scheme does not have a dedicated online portal, one cannot make online contributions, withdrawals and so on like in other saving schemes. In order to check the SSY balance, one has to get their passbook (which was given when the account was opened) updated at the post office or bank holding their account.
Top Banks Providing Sukanya Samriddhi
Apart from post offices across the country offering services related to the SSY, the Reserve Bank of India has authorized several banks in India to offer services pertaining to SSY. They are:
- State Bank of Patiala (SBP)
- Vijaya Bank
- United Bank of India
- Union Bank of India
- UCO Bank
- Punjab & Sind Bank (PSB)
- Syndicate Bank
- Oriental Bank of Commerce (OBC)
- Indian Overseas Bank (IOB)
- Indian Bank
- IDBI Bank
- Dena Bank
- ICICI Bank
- Bank of Maharashtra (BOM)
- Corporation Bank
- Axis Bank
- Canara Bank
- Central Bank of India (CBI)
- Bank of India (BOI)
- Bank of Baroda (BOB)
- Andhra Bank
- Allahabad Bank
Loan against SSY
In many other savings schemes, the government allows subscribers to take a loan against their savings fund. For example, for PPF, after three years, one can take a loan against their savings account. But for SSY, there is no option as of yet to take a loan against a SSY account. On the other hand, once the girl child has turned 18 years of age, the parent or legal guardian can make a partial withdrawal in case of marriage or education and so on. No withdrawals can be made before the girl turns 18 years.
SSY Lock-in Period
In order to assure security for the girl child to cover expenses for her wedding or education in the future, the lock-in period for SSY is till the girl reached the age of 18 years. Before that, no premature withdrawals are allowed. A 50% partial withdrawal is possible for the education of the child after she turns 18, and a complete withdrawal for her marriage is possible also after she turns 18. When the girl turns 21, a complete tax free withdrawal can be made.
The SSY account of the girl child matures when the girl turns 21 years of age. When the account matures, a complete tax-free withdrawal of the savings can be made. After the girl turns 18, partial withdrawals can be made for the girl’s marriage or education.
SSY for NRI
As of now, the government does not allow NRIs to open SSY accounts for their girl child. Maybe some implementations would be made in the future, but as of now, no such options are available for NRIs.
SSY vs Recurring Deposits
For those who are looking out to save, if the option of choosing between opting for a recurring deposit or a SSY account props up, here are the differences:
- SYS accounts can be opened by an Indian resident for girl children below the age of 10. A recurring deposit can be opened at any time by an Indian resident or an NRI.
- One can have as many RDs under their name, but for SSY they can have only one account for the girl child.
- The initial deposit for an RD is Rs.100, for SSY it is Rs.1,000.
- The maximum deposit in a year for SSY is curtailed to Rs.1.5 lakh, whereas there is no limit with regard to RDs.
- Withdrawals for SSY can be made only when the girl child turns 18, but deposits for RDs can be made any time with a 1% penalty fee.
- One can take a loan upto 90% of the corpus against a RD. For SSY, there is no option to take a loan against the account.
- The interest rate for SSY is at 9.10% per annum, whereas for an RD it is 8.40% per year.
- SSY has a fixed tenure of 21-years, the tenure for RDs span between 6 months to a maximum of 10 years.
- Default payment penalty for SSY is at Rs.100 a year, whereas for RDs it is at Rs.1 or Rs.2 for every Rs.100 per month.
- Interest for SSY is compounded yearly, for RDs it is compounded monthly.
SSY vs LIC
For those looking to invest in savings and are curious to know whether to invest in an LIC or the SSY scheme, here are the main differences that might help you make your choice:
- The Return on investment for SSY is at 9.10% per annum, for an LIC it is between 5% to 7%.
- The duration of an LIC investment is 15-20 year or more, whereas for SSY it is for 14 years. Once the girl turns 21, a complete high return tax-free withdrawal can be made.
- Deposits in SSY is fixed to a maximum of Rs.1.5 lakh a year, for LIC there is no limit, though the investment and proceeds are fixed according to the plan.
- SSY enjoys EEE tax benefits, whereas LIC does not have EEE tax benefits.
- SSY is specific to the benefits of the girl child, LIC the benefits can be diversified to benefit the whole family.
- LIC one can nominate anyone closely related to them (even minors), for SSY there is no such thing as a nomination.
Sukanya Samriddhi Account in SBI
For those looking to open a SSY account for their girl child, they can do so at the nearest SBI branch. To open an account, here is what you need to do:
- Walk into the nearest SBI branch. Every bank has a department dedicated to the the process of initialising and maintaining a SSY account.
- Fill in the SSY opening account form. You can either download the form or get it at the bank itself.
- To open a SSY account, mentioned below are the documents that are required:
- Birth certificate of the girl child
- Identity and address proof of the parents or the legal guardian of the child
- Passport size photographs of the girl child and the parents or legal guardians
- To open an SSY account, one needs to make an initial deposit of Rs.1,000 on behalf of the girl child. Following the initial deposit, one can make multiple contributions through the year, with the minimum being Rs.100 and the maximum deposit amount for the year at Rs.1.5 lakh.
- For those who do not have an already existing SBI account it does not matter, the SSY account is fresh account in the name of the girl child.
- Once the documents have been verified the bank will hand you a passbook for the account.
Sukanya Samriddhi Account in ICICI
For those wanting to open a SSY account for their girl child, ICICI bank has also been listed under the banks that help people do so. To open an account here, here are the steps to follow:
- Walk into the nearest ICICI bank and contact the executive of the bank responsible for opening and maintaining SSY accounts.
- Fill in the SSY opening form. You can get the form online or at any post office or ICICI bank.
- Submit the documents:
- Identity and address proof of the parents or legal guardians of the child
- Birth certificate of the girl child
- Passport size photographs of both the girl child and the parents
- The subscriber has to then make a mandate initial deposit of Rs.1,000 to open the account.
- Opening a SSY account for your girl child is a fresh account under the name of the girl child. It doesn’t matter if you have an existing account in ICICI bank.
- Once the bank has verified the documents, the subscriber will receive a passbook for the SSY account.
Sukanya Samriddhi Account in HDFC
Another bank that is listed under the SSY saving scheme is HDFC bank. For those desiring to open a SSY account in HDFC bank, listed are the steps the subscriber has to follow:
- Visit the nearest HDFC bank and fill in the SSY opening form. The form will be available online or at the bank.
- Submit the required documents:
- Birth certificate of the girl child
FAQs on Sukanya Samriddhi Scheme
- What is the relaxation in age limit given to girl child under the Sukanya Samriddhi Scheme?
Since, Sukanya Samriddhi scheme is a newly launched scheme, the government does not want few people to miss availing it due to reasons pertaining to age. Hence, any girl child who has attained the age of 10 years, exactly 1 year prior to the launch of scheme is also eligible to avail the scheme. So, any girl child born between 2nd December 2003 and 1st December 2004 is eligible to avail the Sukanya Samriddhi Scheme.
- What is the taxation process of amount deposited under Sukanya Samriddhi Scheme?
There is a limit of Rs.1,50,000 which is exempt from taxation. Any amount above this will not fetch any income tax relief under section 80C of the Income Tax Act.
- Who all can open Sukanya Samriddhi Account?
Any legal guardian or parent of a girl child can open Sukanya Samriddhi Account on behalf of their girl child.
- Can a Non-Resident Indian avail the Sukanya Samriddhi Scheme?
As of now, there is no official communication regarding this issue and such NRIs are, for the time being, not covered under the Sukanya Samriddhi Scheme.
- What happens in the case the girl child who is the beneficiary meets with an unexpected death?
In case of death of girl child, Sukanya Samriddhi Account is discontinued and closed and the proceeds are transferred to the guardian or parent of the girl child.
- What happens in case of death of the depositor (guardian or parent of the girl child)?
In case of death of legal guardian or parent of girl child, the scheme is either closed and the proceeds are given to the family or girl child. Or, the scheme is continued with the deposited amount until the maturity period and the deposited amount continues to earn interest till the girl child attains the age of 21 years.
- Can I convert my normal bank deposit account to Sukanya Samriddhi Account?
No. Currently, the feature of converting deposit account to Sukanya Samriddhi Account is not available. Sukanya Samriddhi is a special scheme aimed at uplifting the financial status of girls in the country and as such conversion of account is not allowed.
- Can I withdraw money from my Sukanya Samriddhi Account, prematurely?
No. Only a partial withdrawal of up to 50% is allowed and that also when the girl child has attained at least the age of 18 years. This amount can be withdrawn only for higher education or wedding expense of the girl child.
- Is the Sukanya Samriddhi scheme available throughout India?
Yes. Sukanya Samriddhi is a central government scheme and as such is present in each and every state of the country.
- Is the Sukanya Samriddhi Scheme transferable as per location?
Yes. This scheme can be transferred from post office to bank or from one authorized bank to another. This is because there may be times when girl child may require to move due to study or other such situations.
- Should I opt for Sukanya Samriddhi Scheme or s Recurring Deposit Scheme?
Sukanya Samriddhi looks like a recurring deposit scheme in the way it is structured but customers need to understand that unlike recurring deposits, this scheme is aimed specifically at offering financial strength to girl child in the country. Also, the rate of interest offered on this scheme is higher than that being offered by any bank on recurring deposit schemes.
- Who can avail Sukanya Samriddhi Account?
Only parents or legal guardians of one or more girl child can avail the Sukanya Samriddhi Scheme in the name of their daughter.
- How many Sukanya Samriddhi Accounts can I take for my daughter?
Only one Sukanya Samriddhi Account per girl child is allowed. So if you have two daughters, you can avail two separate account in both of their names and if you have one daughter then only one account can be availed.
- Where can I open Sukanya Samriddhi Account for my daughter?
Sukanya Samriddhi account can be opened at any of your nearest post offices or at any branch of the authorized banks. These banks include almost all top and most popular public sector and private sector banks like State Bank of India, ICICI, HDFC, Punjab National Bank etc.
- Has the interest rate on Sukanya Samriddhi Scheme changed since the time of launch?
At the time of launch, in the year 2014-15, the rate was 9.1% per annum which has been revised and increased to 9.2% per annum for the year 2015-16. However it reduced to 8.6% for FY 201.6-17
- What is the deposit term for Sukanya Samriddhi Scheme?
The deposit term is a total of 14 years from the date of availing the scheme. However, the maturity of the account happens only when the girl child reaches the age of 21 years. Until 21 years of age, even when the depositor stops depositing money, the interest rate gets accrued.
- Do private sector banks also have the authority to open Sukanya Samriddhi Accounts for public?
Yes. A few major private sector banks like ICICI, HDFC etc. are authorized by the Finance Ministry to furnish and maintain Sukanya Samriddhi Scheme to customers.
- What happens to the deposit money from 14-21 years of the account, until maturity?
While the scheme can be availed to deposit money only for 14 consecutive years, the account reaches maturity only when the girl child is 21 years of age and hence the deposited amount is maintained in the account up till that time. During the 14-21 years, the deposit amount continues to earn the applicable rate of interest even when the depositor is not making any further deposits.
- happens if I do not deposit money in the account?
The account gets deactivated if the minimum amount of Rs.1000 is not deposited. However, it can be revived by paying a penalty fee of Rs.50. The terms of these scheme have been kept extremely flexible so as to ensure maximum participation by people with all kinds of economic status.
- Can both parents claim tax deduction for Sukanya Samriddhi deposit amount under section 80C?
No. Only one of the parents or guardians can claim tax rebate as per section 80C for the amount deposited under Sukanya Samriddhi.
- Can a person avail both Sukanya Samriddhi and PPF schemes?
Yes. Sukanya Samriddhi is a scheme aimed at mainly at girl child while PPF or Personal Provident Fund is there to help people save for retirement or longer tenures. Both can be availed simultaneously since both have different financial objectives.
- Is there any difference between Sukanya Samriddhi scheme offered by public bank and that offered by private bank?
No. There is absolutely no difference in features of benefits. Be it private banks or public banks or post offices, all authorized entities offer exactly the same features and benefits since the scheme is a central government driven scheme.
- What is the minimum annual deposit amount required for Sukanya Samriddhi Scheme?
The minimum deposit amount required per annum is Rs.1000.
- What is the maximum annual deposit amount that can be deposited under the Sukanya Samriddhi Scheme?
The maximum amount that can be deposited under the Sukanya Samriddhi Scheme is Rs.1.5 lakh per annum.
- Is there a last date to avail the Sukanya Samriddhi Scheme?
No. There is no last date to avail the scheme. However, standard tax filing dates will apply to this scheme too for purposes of taxation.
- Will I be issued a passbook under Sukanya Samriddhi Yojana?
Yes. A passbook to track all your transactions will be furnished to all account holders of the Sukanya Samriddhi Scheme. The passbook will carry all personal details like address, name and age details of the account holder. This is a good reference for depositors in case a dispute arises or even in case of transfer of account from one place to another or from post office to an authorized bank.
- Can an account holder choose not to close the account after it has reached maturity?
Yes. An account holder can choose to continue the scheme even after it has reached maturity. The account holder can get the deposit term extended and the account will then continue to earn the same rate of interest until the account holder decided to discontinue and close the account.
All in all, Sukanya Samriddhi scheme is a progressive and highly appreciated scheme in the market, currently. This is because there was no such government-launched direct benefit scheme for girl child before this scheme was launched in the year 2015. The issue of gender discrimination plagues the country to a great extent and financial dependency of women is one major factor that fuels this issue of gender inequality. Having enough funds for higher education of girl child will ensure that girls are not forced to discontinue education because of lack of funds. Although, the scheme seems low on returns and slow at pace but it can go a long way in eliminating issues related to financial independence of girls.
The basic aim of SSY is to change the Indian mindset which assumes girl child to be a financial burden. With this scheme, the central government wants to convey the message that with a little amount of planning, the future of girl child can be secured. The scheme is supposed to affect the status of the girl child and maybe even the unbalanced gender ratio in the country, in the long run.
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