As a part of the ‘Beti Bachao Beti Padhao’ campaign, Prime Minister Narendra Modi launched the small savings scheme known as the ‘Sukanya Samriddhi Account Scheme’. This scheme can also be viewed as an initiative on part of the Government, to increase the domestic savings percentage which had reduced from 38% of the GDP in 2008 to 30% in 2013. This scheme is expected to encourage parents/guardians to save for their girl child’s education and future.
How to open a Sukanya Samriddhi Account?
The account can only be opened by parents/ legal guardians and can be opened for a maximum of two girl children. An exemption will be made in case of twins/triplets, on producing the relevant certificate from authorized medical institutions. As per new changes, the scheme has been extended to adopted daughters as well.
This account can be opened for a girl child till she attains the age of 10. A girl child, who is born between dates 2nd Dec 2003 and 1st Dec 2004, can open the account by 1st December 2015.
The girl child (who is the account holder) should be an Indian resident throughout the time frame of the scheme.
This scheme can only be opened in the name of a girl child and the depositor will be an individual (parent/guardian), who will deposit in this account on behalf of the minor girl child.
One to One
Only one account can be opened per girl child.
This scheme can be opened at Post Offices or authorized Banks (like SBI, Vijaya Bank Sukanya Samridhi Yojana, Bank of Baroda, PNB, BOI, Canara Bank, Andhra Bank, UCO Bank etc., to new a few).
Additional details regarding Sukanya Samriddhi Yojana Scheme
The account can be opened with an initial deposit amount of Rs.1000, and it can be transferred from its original location to anywhere in India, as and where the account holder (girl child) relocates.
Rs.1000/- is the minimum amount that has to be deposited per year and it can stretch up to Rs.1,50,000/- with no limit on the number of deposits per financial year. Money can be deposited through cheque, draft, cash or even electronically at Post Office/banks which support core banking facility.
If the account is not credited with the minimum annual deposit of Rs.1000/- then a penalty of Rs.50/- will be imposed.
Rate of Interest
This scheme will attract an interest rate of 8.4% per year (2017-18 Q2) and this will be compounded yearly and will be directly credited to the account. However, the interest rate will be revised in April, every year.
As per the scheme, the parent/guardian (depositor) is expected to deposit till 14 years, for completion of the time period. No deposit is required thereafter, till maturity.
Premature withdrawal up to 50% of accumulated amount is allowed for education purpose, provided the account holder is 18 year of age or has passed standard 10th, and it will be permitted on the basis of the fees which are payable. It can be withdrawn, either as a lump sum or as installments over five years.
Closure of Account
This account can be continued till the account holder attains 21 years of age even if she gets married by this time. If the money is not withdrawn even after the account holder turns 21, it will continue to earn interest. Premature account closure is not permissible before the age of 5 years, though exemptions are allowed for medical expenses in case of life-threatening diseases.
The amount invested under this scheme is eligible for tax deduction under Section 80C for the guardian and follows Exempt-Exempt-Exempt (EEE) tax regime.
Documents required for Sukanya Samriddhi Account Scheme:
- Birth Certificate of the account holder (girl child).
- Address and photo identity proof (PAN Card, Voter ID, Aadhar Card) of the guardian.
This scheme is very similar to PPF in terms of taxation but with a higher tenure. Considering the intentions of the Government, this product has a social angle rather than just being another investment scheme, and it spreads the message that a girl’s future can be secured with a little bit of financial planning.