In the budget speech, Finance Minister announced a scheme for girl child named Sukanya Samriddhi. Government of India introduced this scheme on 2nd December 2014. Let us see how this will be beneficial to you or your kid’s future.
Who can open this account?
The natural or legal guardian in the name of girl child may open this account. The account may be opened from the birth of a girl child to until she attains the age of 10 Yrs. However, any girl who attained 10 yrs, one year prior to the commencement of this account is also eligible. A depositor may open and operate only one account in the name of girl child.
While opening the account, the guardian must submit the birth certificate of girl child along with that his/her identity proof and residence proof.
A guardian must open a maximum of two accounts. It means guardian or parents not allowed to open more than two accounts under this scheme. The exception to this rule is, the third account is also allowed to open only in case of birth of twin girls as second birth or if the first birth itself results into three girl children. However, a guardian must submit the medical certificate regarding this.
What will be the tenure of this account?
This is the 21 years account. However, one can continue the account even after the 21 years also (without any new contribution) up to her marriage or on request. If girl marries within 21 years then this account ceases there itself. You can deposit into this account only up to 14 years. So from 15th year to 21st year, there is no provision for investment.
How much can you deposit?
The initial investment must be with Rs.250. Thereafter, in the multiplication of Rs.100. Minimum yearly investment is Rs.1, 000 and maximum investment in a year is Rs.1, 50,000 (Year means a financial year). You can deposit up to completion of the 14th year of account opening.
If you do not deposit the minimum yearly deposit of Rs.250 in any year, then such account is considered as inactive. To re-activate this account, you must deposit the penalty of Rs.50 for each inactive year along with that minimum subscription of Rs.1, 000 of those years.
How to deposit to this account?
You can deposit either by cash or through cheque or DD in the name of Postmaster (in case you have account with post office) or the Manager of the concerned bank where you have account. In case of payment through cheque or DD, effective date of investment will be the date of amount realized.
How much is the interest?
Government of India will notify this on yearly base and is usually yearly compounding. However, for the financial year 2014-15 the government fixed the interest rate at 9.1%. This interest so compounded on yearly base will be credited up to the completion of 14 years. The interest rate for 2015-16 will be 9.2%.
Who can operate this account?
The account may be opened or operated by guardian until the girl child attains the age of 10 Yrs. However, once the girl child attains the age of 10 Yrs then child herself can operate the account. However, depositing will be through guardian only.
Whether premature closure allowed?
Yes, it is allowed in case of death of account holder i.e. girl child. The balance along with interest earned will be payable to guardian. Apart from this if, you are really facing financial difficulties and Government satisfy with such hardship, then it may allow premature closure. Examples of such extreme difficulties are like medical support in life-threatening diseases, death, etc.
Whether you get passbook?
You will get the passbook after opening the account. This contains all details like the child’s name, guardian, date of account opened, account number, address and the amount deposited. You must produce the passbook while depositing the account, receiving the interest and at the time of final closure.
Whether account can be transferred?
You can transfer the account anywhere in India when a girl child shifts the place, which is other than the city, where account opened.
How much withdrawal allowed?
You can withdraw the 50% of the balance at the credit, at the end of preceding financial year. This must be to meet the financial requirements of child like higher education or marriage. However, do remember that girl child must attain the minimum age of 18 years for such withdrawal.
Suppose a girl married before the completion of 21 years of account, and then such account is not allowed to operate. The account is closed once she marries.
When the account will get closed?
The account will be closed once it completes 21 years. The account holder must submit the withdrawal slip along with passbook. If account not closed after 21 years, then the balance amount will continue to earn interest until the account closed.
What about taxation?
Contribution towards Sukanya Samriddhi Account will be eligible for deduction under Sec.80 C up to the yearly limit of Rs.1,50,000. But yearly interest earned and maturity amount will be tax free (As per Budget 2015). In short both plan offers you same tax benefit of EEE (Exempt-Exempt-Exempt).
Whether this is the best investment option for child girl?
My observations of this scheme are as below.
Image courtesy of [Stuart Miles] at FreeDigitalPhotos.net
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View Comments
Hi Sir,
My Name is M.Raghuram,
My Daughter Age is 14 Years Right Now, Can i Apply Sukanya-Samriddhi Acc. From This Time To 10 years Turm. Sir Plz Explain Me....?
And My Son is 11 Years Old Right Now Witch Plan Is Can Take For My Family..Plz Explane Sir...?
Dear Raghu,
As your daughter's current age is 14 years, you are not allowed to open SSY account. Regarding your son, it is hard to guide blindly without knowing your overall financial life.
Sir my question is I have to transfer ssy ac from axis bank to post office what is the procedure ?
Dear Mitesh,
Refer this post "Transfer Sukanya Samriddhi Account from Post Office to Bank".
Hello your post is very informative and specially with illustration is excellent. However please clarify if the interest rate remains the same during the opening of account or it keep on changing with the change of interest rates. For example in SCSS the interest rate doesn't change and remains constant but in PPF it keeps on changing.
Thanks
Dear Pawan,
It will change on a quarterly basis.
Hi Sir,
Can I transfer the monthly installments from any bank to SSA through NEFT/IMPS?
Nithiyaraj-If the bank provide you that facility of deposit.
My child is his 4 months old....i wanted to invest some amount monthly in her name so which investment is best as per ur knowledge and how to invest in that could you please help....
Prasanna-First buy term life insurance in your name to the tune of around 15-20 times of your yearly income. Second, use PPF or SSA as debt and in equity start equity mutual fund investment in ratio of 30:70 between debt and equity. If you are unable to do that, then take the help of an adviser.
Hi Sir,
I am working at abroad. My family is with me.
I have opened two Sukanya Samridhhi account through Post office for my two girls.
One is opened on Apr 2015 and another one Oct 2016 .
I heard from social media, NREs are not applicable for this scheme.
Am I eligible to continue this account?
Thanks in advance.
JM-Once your status changes from resident Indian to NRE, then you must inform the concerned bank or Post Office and account ceases there itself.
Hi Sir,
Thank you for your quick response.
As I know, initially there is no rule regarding NRE. Post office people didnt inform me that time.
Now also I called to head post office and they said there is no issue if I have Adhar card.
I think govt. modified the rule on 2016.
I have checked modified rule on the NSI website. http://www.nsiindia.gov.in/writereaddata/FileUploads/SSA2016Rules.pdf
I hope the new rule will only affect the account which are open after 2nd December 2015.
Please double confirm it for me.
I have mailed NSI 1 month before and no answer :(
Thanks
JM-You are right. But there is no clarity of whether the old accounts continue or not. Hence, it is best we must assume this rule apply to you also (than blindly continues investing and later on get back money without interest).
Hi Sir,
Noted. In that case, is there any good investment for NREs other than mutual fund.
Thanks
JM-Depends on your financial goals and the risk profile. Hence, hard to guide anything BLINDLY.
My daughter date of birth 08-12-2016 shall i open Suganya Samiridhi scheme
Thilaka-YES.
Whether payment of interest on Time Deposits Accounts opened by Gazetted Govt. Officers with the help of money belonging to the Govt. are allowed or not? If so, under what rules.
Yogesh-Money belong to Govt? Opened by Govt Officers? I am unable to understand.
Hi Tonagatti,
My name is Edward from Bangalore, My daughter was born on Jan 26, 2013. Is there any special schemes / benefits if so Can you please advice me what are the schemes and benefits from the Government of India for her and where can i invest.
Edward-Stay away from any schemes. Start accumulating on your OWN.
Sir, my daughter is of 6 year's. And I'm searching for best saving plan. I heard about sukanya samriddhi account.
Kindly advice me is it good to go with this account. And are there tax benefits in this account.
Vikrant-It is politically motivated plan. We don't know the faith of this plan after the fall of current Govt. Stay away. Instead I suggest PPF in your debt category of investment.