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Everything you Should Know about Sukanya Samriddhi Yojana

dateKnowledge Centre Team dateMay 19, 2021 views197 Views
Everything you Should Know about Sukanya Samriddhi Yojana

The financial security of a girl child is a necessity in India and the government has been taking initiatives. Sukanya Samriddhi Yojana (SSY), launched on 22 January 2015, is a government-sponsored child insurance plan cum saving scheme to serve a girl child. SSY is a major part of the Beti Bachao, Beti Padhao Yojana. The account can be opened by the parents of any girl child under the age of 10. A Sukanya Samriddhi Account has a time of 21 years or until the girl child weds after the age of 18. The scheme is aimed at encouraging parents of girl child to build a fund for their future or higher education.

Sukanya Samriddhi Yojana- Interest Rates 2021

Sukanya Samriddhi Yojana Interest Rates are announced by the government quarterly. For Q1 (April-June) FY 2021-22, the interest rates are set at 7.6% p.a. The interest is calculated on yearly basis, yearly compounded as per the details provided by India Post website. SSY account has a high interest rate as compared to PPF accounts.

Here is the comparison for your reference:

Period SSY Interest Rates PPF Interest Rates
1st April, 2021 onwards 7.60% 7.10%
1st January, 2020 - 31st March, 2020 8.40% 7.90%
1st April, 2019 - 30th June, 2019 8.50% 8.00%
1st July, 2018 - 30th September, 2018 8.10% 7.60%
01st October 2017 - 26th December 2017 8.30% 7.80%
01st April 2017 - 30th June 2017 8.40% 7.90%

Eligibility Criteria for Sukanya Samriddhi Yojana

The Government of India has made Sukanya Samriddhi Yojana accessible for everyone, and hence, you can open an account at any post office. Understand the eligibility criteria for opening Sukanya Samriddhi Yojana account:

  • Just parents or legitimate guardians of the girl child can open a Sukanya Samriddhi account.
  • The girl child ought to be under 10 years at the time of account opening. The account can be operational till the girl child is 21 years old.
  • The opening investment can begin from ₹250 and a limit of ₹1,50,000 yearly with ongoing deposits in the products of ₹100.
  • An individual girl child cannot have numerous Sukanya Samridhhi accounts.
  • Only two Sukanya Samriddhi Yojana accounts are permitted per family, i.e., one for each.

Key Features of Sukanya Samriddhi Yojana (SSY)

It is a must to know the highlights of an investment scheme before investing money in it. There are a wide range of benefits of Sukanya Samriddhi Yojana account.

1. Interest rate

The interest is to be paid just on maturity or in case of a change of your girl's residency or citizenship standing. Sukanya Samriddhi Yojana yielded the highest return during the FY(2015-2016). However, ever since, the interest rate is continuing to decline.

2. Lock-in period

The lock-in duration of the Sukanya Samriddhi Yojana is 21 years. For instance, if the account is opened when the girl child is 5 years old, it will mature when she ages 26.

3. Deposit

A minimal deposit amount of ₹250 is required, each year, for 15 years. The maximal sum that can be put into a financial year is ₹1.5 lakh. Deposits can be created in multiples of 100 and through cash, cheque, DD (demand draft), or online transfer. You can put into several deposits in a year.

Yet, if you cannot make the base deposit in a given year, your account will be ceased. However, you can reactivate the account by paying a sum of ₹50 as a penalty and presenting the minimum required deposit sum.

4. Transfer of Accounts

If you change your domiciliation, you can transfer your Sukanya Samriddhi account to any post office or bank in the country or from a post office to a bank without any charges. You will have to submit address proof. For transfer under different conditions, you will be charged an expense of ₹100.

5. Number of Accounts

One account for one girl child, and a minimum of two accounts in one family is allowed. You can open multiple accounts if you have triplets (all-girls) or if your first child is a girl and twin girls are conceived later.

Tax Benefits of Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana provides you with great tax-saving benefits. The scheme accompanies the (EEE) status. This implies that:

The investments you make towards Sukanya Samriddhi Yojana are qualified for tax deductions under Section 80C of the Income Tax Act. Deposits of up to ₹1.5 lakhs are permitted. Should you decide to put ₹1.5 lakh in the scheme in a specific financial year, the whole investment will come out to be t tax-deductible.

  • The interest on your investment is additionally deductible from tax.
  • You don't need to pay any tax on maturity or withdrawal.

Sukanya Samriddhi investment scheme draws no taxes attributes for its EEE status. It can help you assemble a generous corpus through this child insurance plan over the years for your child's secure future.

Sukanya Samriddhi Yojana- Account Opening Process

Start a Sukanya Samriddhi account for your girl child by visiting a post office or any pre-approved bank. You will be required to fill the application form and submit it along with the accompanying documents:

  • An account opening form appropriately filled in
  • Birth certificate of the girl child
  • ID and address proof of the depositing party.
  • Medical certifications as verification of birth of various girl children at the same time.
  • Some other documents as required by the bank or post office.

Claim/ Withdrawal Procedure of SSY

You will have to submit the correctly filled withdrawal form alongside the SSY account passbook to the bank or post office branch where the account is opened.

To claim or withdraw prematurely, you need to fulfil a few conditions, for example, for marriage costs or the advanced education of the girl child.

On the account's maturity, the sum will be paid to the girl child holding the account.

For another situation, you may prematurely close the account and claim the deposit sum solely after finishing five years of account opening for the accompanying reasons:

  • On the demise of the account holder.
  • A life-threatening ailment to the account holder.
  • The demise of the guardian who maintained the account.

Through the Sukanya Samriddhi Yojana child insurance plan, you can contribute a few of your assets reserved for your girl in this scheme as it is secure and risk-free. Yet, it is an intelligent choice to have a blend of equity in your portfolio for your girl, to guarantee you have sufficient accounts for her advanced education and marriage regardless of inflationary pressing factors.

If you're looking for other alternatives to choose from or if you're looking for an insurance plan for your boy child, don't be disheartened; Canara HSBC Oriental Bank Of Commerce Life Insurance has an extensive range of child insurance plans for your child which are compatible enough to suit your every need. You can choose from a wide variety of child insurance plans to secure the future of your child. As the cost of education is rising, you need to create an education fund to give wings to your child’s dreams and aspirations.

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Frequently Asked Questions (FAQs) Related to Life Insurance Policies

The premium is one of the most important factors to consider before buying a life insurance policy. Many people buy a life insurance policy with a high sum assured but are unable to process the premiums for the entire premium payment tenure. You can get a better idea of the premium outgo with the premium calculator available in the 'Tools and Calculator' section of www.canarahsbclife.com.

Life insurance plans come with several riders which increase the efficiency of the policy for the buyer. For instance, if you have a history of terminal illness in your family it would be advisable to opt for terminal illness rider with your term insurance plan. Riders or add-ons help in customising the standard policy benefits for the requirement of different families. The iSelect term insurance plan comes with a built-in cover for terminal illness, and option for protection against accidental death or disability. You can also opt to cover your spouse's life under the same policy by paying an additional premium.

Life insurance companies calculate the premiums based on several factors such as age, gender and occupation.

Age: It is one of the biggest factors that influence life insurance premiums. Premiums tend to be low when the life insured is younger as the chance of contracting diseases is low. Young people also opt for the best life insurance policies with longer tenures and pay premiums for a longer duration, which makes the policy cheaper for young people.

Gender: The insurance premium for women is generally lower when it comes to life insurance plans. Women live longer and pose a lesser risk of a claim leading to lower premiums for them.

Lifestyle habits: The premiums for people who smoke or drink is always higher due to higher health risks.

Policy term: Policy terms are also taken into consideration by insurers while deciding the premium amount. Life insurance policies with longer tenure are cheaper as compared to short-duration policies.

Mode of purchase: The platform that you use to buy the best life insurance policy also determines how much you will have to pay for the plan. People who buy life insurance policies online have to pay lower premiums as compared to offline policies.

Occupation: The nature of your work is an important factor that influences the premium amount. Certain occupations like shipping and mining are considered more dangerous as compared to jobs in services industries. The insurance premium rises with the risk profile.

Processing life insurance claim is a transparent and smooth process with Canara HSBC Oriental Bank of Commerce Life Insurance.

In case of the death of the life insured, the nominee will have to intimate the company by filling a Death Claim Form and sending it to the nearest branch office.

Once the form is received, the claim is registered by the insurer.

After the registration of the claim, the company will send the claims pack along with the related forms such as physician’s statement form and employer certificate that need to be filled.

Along with the duly filled forms a few documents such as original [policy document, death certificate, copy of bank passbook, hospital or treatment records, photo identification and address proof have to be provided.

The claim is processed on the submission of relevant documents. Once the documents are verified, the claim amount is released post all due diligence.

Household expenses rise with age. The cost of children's education increases along with other lifestyle expenses. The iSelect term plan offers an option to increase the cover according to the life stage. If opted, the insurance cover increases by 25% at every 5-year terminal till the 20th policy year.

Even though a life insurance policy is bought to protect your family in your absence, there are chances of the claim being rejected due to several factors.

False information: If the policyholder provides false information or conceals important information while buying the life insurance policy, the insurer has the right to reject the claim after his/her death.

Type of death: Deaths due to suicide in first policy year, intoxication or pre-existing disease is not covered under life insurance plan.

Premium payment: The payment of premiums on time is of utmost important to avail the benefits of life insurance. Life insurance policy may lapse on the failure to pay the premiums

Nominee details: A life insurance company can put the claim on hold if the nominee details have not been filled or not been updated by the policyholder.

Suicide: If the life insured commits suicide within 12 months of buying the life insurance policy, the insurance companies generally pay 80% of the total premiums paid.

Buying the best life insurance plan online is not only safe but a better option. Online life insurance policies have lower premiums and the individual is not required to visit the insurer's branch or a bank. The best life insurance policies online insurance offer higher benefits. Customers should, however, buy online life insurance policies only from credible insurers and should check for SSL certificate on the website to ensure that the website is legitimate.

The cost of life insurance policies varies depending on factors like age, gender and occupation. The average cost of life insurance plans, especially term plans, is very low compared to the amount of coverage offered.

An individual is allowed to have multiple life insurance policies. People opt for more than one life insurance policy to increase the cover or avoid claim rejection. In case of multiple life insurance policies, even if the claim is rejected by one insurer, the beneficiaries may receive the benefit from a different insurer.

Life insurance policies are of different types. In case of unit-linked or endowment policies the policyholder receives the maturity benefit at the end of the policy term. However, in the case of term insurance plans, there are no maturity benefits. The death benefit is only paid out after the death of the life insured.

When you buy a life insurance policy, the insurance company asks for the nominee details. Only the person named as the nominee in the life insurance plan can cash out in case of death of life insured.

A life insurance policy is generally taken for a specified period. After the policy duration of a term plan gets over, the policy simply terminates and ceases to exist. However, in case of unit-linked plans or endowment, you can use the policy as a tool for retirement planning and the accumulated corpus is used by the insurer to pay you monthly amounts for your entire life.

If a policyholder purchases a term plan for 25 years and dies during the policy term, the beneficiary receives the death benefit. In case of iSelect term plan, the policy provides four payment options to the beneficiaries. If the regular payment option is chosen, the policy works as a source of regular income.

It is a popular misconception that life insurance plans are only for accidental deaths. A term life insurance plan like iSelect Star Term Plan also covers terminal disease along with death. A terminal illness cover is important as health insurance pays only for the cost of treatment and hospitalization, but a terminal illness cover pays you a lump-sum amount which takes care of other expenses. On the other hand, unit-linked policies such as Invest 4G cover death and also provide decent returns for other financial goals such as buying a house of child's education.

It is ideal to buy a life insurance plan in your early 20s because it is the time when people have just started with their professional life and so there are lesser responsibilities and financial liabilities to take care of. Also, if you buy the best life insurance plan at this age, you will be paying relatively lower insurance premiums since it’s a due fact that mortality rate in case of young people is low. And that is why life insurance companies offer lesser premium rates to younger people as they think that they are most likely to be fit and healthier with less chances of filing a claim in future.

Once you have cancelled your life insurance policy, you will instantly lose your life insurance cover. Afterwards, your insurance company will get in touch with you and ask for valid reasons regarding the cancellation of your policy. In case you cancel your life insurance policy within the grace period, i.e. 15 to 30 days, depending on your insurer, then insurance company will reimburse the premium amount paid by you. But, no refunds will be paid to you if the policy is cancelled after the grace period.

Yes, you can take life insurance under Married Women’s Property (MWP) Act, 1984 only if you are a married man and a resident of India. Buying a life insurance plan under MWP Act would be helpful in saving your family’s financial well-being when you are not around. As per this policy, only wife and children would be eligible to receive the death benefits. You can also buy a policy if you are a widower or a divorcee. However, in that case, you can give your child’s name as your beneficiary. It is very simple to buy a life plan under MWP Act. All you need to do is to fill up an MWP addendum while purchasing an insurance policy.

Yes, there are different payment options for you to pay premiums. Here’re some of them

    1. Regular premium payment option – This premium payment option allows you to pay premiums equal to your policy term either monthly, quarterly, half yearly or annually.

    2. Single payment option – Through this premium payment option, you can pay the lump-sum amount in one single payment.

    3. Limited payment option -In this premium payment option, you can pay premiums for a specific period of time less than policy term either monthly, quarterly, half yearly or annually, but benefits of insurance can be enjoyed for a longer period of time.

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