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.
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.