The launch of the Sukanya Samriddhi Yojana account (सुकन्या समृद्धि योजना ) was part of the ‘Beti Bachao Beti Pada’ campaign launched by the government. It is a Small Savings Special deposit Scheme for the girl child. It’s not just other schemes to provide social benefits but a good long-term debt investment. It is designed in a way to support her higher education and/or marriage.
Must Check – Child Future Plan – Complete Guide
Key features of Sukanya Samriddhi Yojana Account
|Definition||· The Sukanya Samriddhi account is a savings account that can be opened in the name of a girl child from the time she is born till she becomes 10 years old. It can be opened in a post office or public sector bank like SBI, Bank of Baroda, ICICI, etc.|
|Deposit Rules||· Sukanya samridhi yojna account can be opened with a minimum amount of Rs. 250 and a maximum of Rs. 1,50,000 in a financial year. One can deposit money for 15 years from the date of account opening. Deposits in multiples of hundred can be made in form of cash, cheque or demand draft by guardians or parents.|
|Interest Rate||· For the financial year, 2021-22, the interest rate is set at 7.6% p.a. (TAX-FREE) It will be decided every year. Interest will be compounded annually.|
|Other Benefits and Features||· 50% of the fund can be withdrawn prematurely if the need arises after the girl turns 18.
If the girl shifts to a different place in India, the account can be transferred
· The account will mature after 21 years from the date of opening the account. The account can be continued till the girl’s marriage if some formalities are completed.
· Under section 80C, one can get a tax benefit on deposit in this account up to a sum of Rs. 1,50,000.
· When the girl becomes 10 years old, she can operate the account on her own. But deposits can be made only by the guardian or parents.
· Premature closure of Sukanya Samridhi yojna account is possible in case of the girl’s death. The amount with interest will be paid to the guardian/parent of the child.
Drawbacks of Sukanya Samriddhi Scheme
- A penalty of Rs. 50 per year is charged if one fails to deposit in a year.
- One family can open only 2 accounts even if there are more than 2 girls in the family unless there are more than 2 births at 1 time in which case, accounts for all the girl children born at the same time can be opened.
- The interest rate will be determined every year in sukanya samridhi account. Currently, it is tax-free.
- Interest rates can fluctuate.
* Please check complete details before opening the account.
Sukanya Samridhi Yojana – from planning perspective
- First look at your asset allocation & then decide the amount that you would like to contribute
- If you know your long term goals – this scheme is much better than your FDs, RDs & other post office schemes
- If you are the one who invests in insurance child future plans – discontinue all that (get in touch with your agent/advisor) & add that amount here
- Start small & depending on cashflow & goals increase the amount in future
- Interest rates may come down in the future but you should not be worried about that – government will at least try to match inflation numbers on a yearly basis
- Only one account per Girl Child is allowed (max 2 girl child in the family)
- Illiquidity is both a plus & minus in Sukanya Samridhi – depends how you have planned your finances
- If we assume the average rate of interest that you will get in this account is 7.6% – then an investment of Rs 1 Lakh per year for 15 years (total investment 15 Lakh) can turn Rs 43,95,380.96 in 21 Years (assuming no withdrawal before that)
Download Sukanya Samridhi Yojna account – Download application form
You can also download the SSY New Account Application Form from the following sources:
- RBI Website
- The India Post Website
- Individual websites of public sector banks ( SBI, ICICI, PNB, BoB, etc)
Documentation required to open Sukanya Samriddhi Account
- Birth certificate of the girl
- Address proof
- Photo identity proof of the girl
- Photo identity proof of the parent/legal guardian
Should I invest in Sukanya Samriddhi Yojana?
Considering the woeful state of the girl child, the Sukanya Samriddhi Account is a good start to give her financial independence. It will not give returns like the equity market or mutual funds, but it is a less risky investment avenue. The current interest rate is also good. It may or may not be enough to save only in this scheme for marriage and education considering inflation but can be a part of one’s portfolio. It can be part of the debt investments. I haven’t opened the account yet but may be doing it in near future. (will prefer dealing with the nearest banks rather than post office)
Have you invested in Sukanya Samriddhi Yojana Account. Let us know your thoughts on this account. Must share this with your friends…