Sukanya Samridhi Yojana




What is Sukanya Samridhi Yojna?

Sukanya Samridhi Yojna (SSY) is an initiative taken by the Government of India targeted to help the parents of girl child. On 22nd January 2015, this saving scheme which was launched by the Indian Prime Minister, Narendra Modi in Panipat, Haryana. This initiative encourages the parents of female child to build a fund for their child’s education and marriage expenses.

Eligibility

  • SSY is only meant for girl child
  • Account can be opened anytime in between the birth and the 10th birthday of the child, by her guardian
  • One account is allowed per child
  • A maximum of two accounts can be opened by parents for each of their children. Exception is applicable in case of birth of twins or triplets
  • Non-Resident Indians (NRIs) and Overseas Citizen of India (OCI) are not eligible to invest in this scheme

How it Works

  • The minimum deposit amount for a year is Rs 1000.
  • The maximum deposit is capped at Rs 1.5 lakhs.
  • If the investor fails to pay the minimum deposit, a penalty of Rs 50 is levied.
  • After the girl reaches the age of 10, she can operate her account.
  • The opening amount is Rs 1000 and multiples of Rs 100 can be deposited thereafter.
  • The current interest rate is 8.4%.

Maturity and Withdrawal

  • The period of maturity is 21 years from the date of opening the account or the girl’s marriage, whichever is earlier.
  • One needs to pay in the scheme for 14 years.
  • The account will keep earning the interest until maturity after 14 years.
  • Partial withdrawal for education of the girl child is allowed after she has passes her 10th Class or attained the age of 18.
  • One can withdraw 50% of the savings in the account through partial withdrawal.

Advantages

  • Nominal opening charge.
  • Transfer of SSY accounts to anywhere in India is allowed.
  • Deposits can be made multiple times or even in lump-sum.
  • There is no limit on the number of deposits in a month or a year.
  • Interests are paid every month.
  • Deposits in SSY are exempted from tax.
  • The amount saved at the time of account closure is exempted from tax.
  • Interest gained on the deposits in SSY is not taxable.

Limitations

  • Nomination facility isn’t available in SSY.
  • One cannot avail loans under this scheme.
  • SSY doesn’t offer any insurance feature.
  • Deposits get locked in for a long time.
  • No further interest after account attains maturity.

In a country like India, encouraging parents of a girl child to set up savings for her future including education and marriage is extremely important. Launched as a part of the Beti Bachao, Beti Padhao campaign, Sukanya Samridhi Yojna has gained popularity for its unique features. The fact that girls can deposit in the account after she is 10 years old also inculcates financial independence right from a very early age. One cannot also ignore the tax benefits that Sukanya Samridhi Yojna offers. Apart from this, the flexibility in terms of maturity is one of the biggest advantages of this scheme.

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