Sukanya Samriddhi Account-Details and Benefits of the Scheme
Sukanya Samriddhi Account is one of the savings schemes from Govt of India in the name of girls. Honorable Prime Minister of India, Sh. Narendra Modi Ji launched Sukanya Samriddhi Account “A Small Savings Scheme” on 22nd January 2015. It is part of “Beti Bachao – Beti Padhao” initiative of Government of India.
Objectives of Sukanya Samriddhi Account
- Through Sukanya Samriddhi Account, Govt is trying to give a social message that Girl Child is not a financial burden if parents of a Girl child secure their future through proper financial planning. It is quite evident from the scheme document.
- Sukanya Samriddhi Account cannot be considered as an investment option but a savings scheme to secure the future of Girl child.
Benefits of Sukanya Samriddhi Account
1. Highest Interest Rate among all Small Savings Schemes offered by Govt of India
Sukanya Samriddhi Account will offer an interest rate of 9.1%. It is highest among all Small Savings Schemes. The rate of interest for this scheme will be market linked. The rate of interest will be 75 bps or 0.75% more than the average 10-year G-Sec yield for the previous year. The Interest Rate applicable for the Financial Year will be declared every year by the Govt of India. Interest will be compounded yearly i.e. will be credited on a yearly basis. It will be accrued on a monthly basis on the lowest balance between 5th and last day of the month.
2. Tax Savings
In order to encourage people to open Sukanya Samriddhi Account, Govt has exempted contribution to this account u/s 80C of the Income Tax Act, 1961. In all probability this scheme will be EEE i.e. exemption will also be available on interest income and at the time of withdrawal. It is under consideration of Department of Revenue (DOR). DOR will soon bring a legislative amendment to this effect.
3. Lock-in Period
This is the BEST Feature of this scheme. The maturity of account is 21 years from the date of opening of the account or Marriage of the Girl Child, Whichever is earlier. For Marriage, Girl should be of 18 years at the time of marriage. The operation of account is not permitted beyond the date of marriage.
One Premature withdrawal is allowed on attaining the age of 18 years by girl child only if funds are required for Higher Education. Premature withdrawal is restricted to 50% of the balance at the end of preceding financial year. The deposits in the account can be made till completion of 14 years from the date of opening of the account through maturity is 21 years from the date of opening of the account.
4. Purpose of Sukanya Samriddhi Account
Sukanya Samriddhi Account is launched with the sole objective of financial planning for the marriage of Girl Child. Social Message is that Marriage or Education of a Girl Child is not a financial burden if parents plan well in advance.
With lock-in period, the parents cannot withdraw the money for any other purpose except marriage or for higher education of Girl Child. Because of this reason, Sukanya Samriddhi Account cannot be compared with any other financial instrument or small savings scheme. Moreover, PPF is not linked to any end purpose but just a tax saving instrument.
5. Maturity Proceeds to be Paid to Girl Child
On maturity of Sukanya Samriddhi Account, the account balance along with accrued interest will be paid directly to the account holder i.e. Girl Child. It gives financial independence to Girl child which is currently missing in India.
6. Interest to be paid even after Maturity
Unlike other financial schemes where interest is not paid on maturity of the deposit / investment scheme. A unique feature of Sukanya Samriddhi Account is that even after maturity if the account is not closed by the account holder, Interest shall be payable in the account till final closure of the account.
7. Flexibility to operate Sukanya Samriddhi Account
Based on past experience, Government of India has given a lot of flexibility in terms of account operations. Few of them are:
(a) The account can be opened with an initial deposit of Rs 1000 and thereafter any amount in multiple of Rs 100 can be deposited subject to the max limit of 1.5 lakh during the financial year. Every FY, a minimum sum of Rs 1000 should be deposited to keep account operative. In the case of two daughters i.e. two Sukanya Samriddhi Accounts, the cumulative contribution cannot exceed 1.5 Lakh during Financial Year.
(b) On attaining age of 10 years, a girl child can operate her account
(c) Account can be closed if it is proved that account is causing undue hardship to the account holder
(d) Account can be transferred anywhere in India
For more information click below
More information about Sukanya Samriddhi Account
Notification of Sukanya Samriddhi Account
Sukanya Samriddhi Account Official Website
Application for opening an account under Sukanya Samriddhi Scheme
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