Ensure High Returns For Your Girl Child With This Plan
The Sukanya Samriddhi Yojana (Girl Child Prosperity Scheme) is a savings scheme designed to meet the education and marriage expenses of the girl child. The scheme was launched by the government of India in 2015, keeping in mind that women are an under-served population in India, often deprived of basic necessities like education. Their well-being has also been marginalized by families which tend to invest more in their sons as opposed to daughters.
What is Sukanya Samriddhi Yojana?
Sukanya Samriddhi Yojana is a small savings scheme for the girl child. It is a part of the Beti Bachao Beti Padhao campaign, meant to promote the welfare of girls in India by providing financial security for their education and marriage expenses. The scheme was launched on 22 January 2015 by Prime Minister Narendra Modi under the National Savings Scheme.
The government offers an interest rate of 8.1 percent (effective from October 1, 2018) on deposits made under the Sukanya Samriddhi Yojana. The interest is calculated from the first day of every quarter but credited only at the end of the financial year (March 31).
Benefits of Sukanya Samriddhi Yojana
1. Highest Interest Rate Among Other Saving Schemes
The Sukanya Samriddhi Yojana offers one of the highest interest rates among all the saving schemes offered by banks. The interest rate is higher than what is offered by Fixed Deposits, Recurring Deposits, and other saving schemes like Public Provident Fund (PPF) and National Savings Certificate (NSC).
2. Numerous Tax Benefits
Under the new Sukanya Samriddhi Yojana scheme, investments are eligible for tax deductions under Section 80C of the Income Tax Act, as per the old income tax slab. The account holder can claim a deduction up to Rs 1.5 lakh in a financial year. The interest earned on the deposits is exempt from tax (provided that the amount deposited every year is within Rs 1.5 lakh), and at maturity, both principal and interest amounts are exempt from tax.
3. Lock-In Period
The lock-in period for a Sukanya Samriddhi account is 15 years. However, the account can be extended in blocks of 5 years till your girl turns 21 years old. Deposits can be made in the SSY account even after she reaches 18 years of age, though she will have to sign an application form for that.
The deposits made into the Sukanya Samriddhi account are not subject to premature withdrawals or closure other than the permitted premature withdrawals and closure under certain specified circumstances. After maturity, you will get the proceeds from your girl's Sukanya Samriddhi account as a lump sum amount.
There are four types of premature withdrawals from an SSY account:
- Partial Withdrawals: Partial withdrawal is allowed after completion of 5 financial years from the date of opening an account for higher education, marriage, or any other reasonable needs for up to 50% of the balance at credit at the end of the preceding financial year.
- Premature Closure due to death or medical emergency: The entire amount held in the SSY scheme may be withdrawn by an applicant if he/she provides documentary evidence proving that it was so needed due to natural calamities such as floods, earthquakes, etc., or medical emergencies such as terminal illness requiring hospitalization, major surgery, etc., or death.
There are two types of premature withdrawals from an SSY account:
- Partial Withdrawals: Partial withdrawal is allowed after completion of 5 financial years from the date of opening an account for higher education, marriage, or any other reasonable needs for up to 50% of the balance at credit at the end of the preceding financial year.
- Premature Closure Due To Death Or Medical Emergency: The entire amount held in the SSY scheme may be withdrawn by an applicant if he/she provides documentary evidence proving that it was so needed due to natural calamities such as floods, earthquakes, etc., or medical emergencies such as terminal illness requiring hospitalization, major surgery, etc.
4. Maturity Proceeds Paid To Girl Child
The maturity proceeds will be paid to the girl child on the maturity of the account. These proceeds can be used by the girl child for her higher education or marriage. The maturity proceeds can be withdrawn only after the girl child attains 18 years of age.
However, in case of the death of the guardian, this amount can be withdrawn 5 years from the date of opening of the account.
5. Interest is Given Even After Maturity
The interest is calculated on the basis of yearly rest from the date of deposit and is credited annually to your account. Now, what’s even better? Even after 10 years of maturity or after 21 years of opening the account, whichever is earlier, you will continue to earn interest on deposits until the account matures. How cool is that?
6. Flexibility
SSY is a very flexible scheme where you can deposit as low as Rs 1,000 for the initial account opening. Once the Sukanya Samriddhi Yojana account has been opened in your girl child’s name, the minimum yearly deposit required is Rs 250. The maximum amount that you can deposit per year is Rs 1,50,000.
While it is mandatory to make a minimum yearly deposit of Rs 250, you have an option to increase the yearly deposit by Rs 1,000 every year. So if a parent starts investing with SSY when their daughter turns 5 years old and deposits an initial sum of Rs 1,000 or more then they shall need to invest at least Rs 2,250 when their daughter turns 6 years old
Final Words
Here are some final words. To conclude, Sukanya Samriddhi Yojana is a great investment option for the girl child. It is a small savings scheme that can ensure a bright future for your girl child. The account can be opened at any post office or a bank. It is a small investment with a big return. So, take advantage of this investment option and secure your girls' future today!
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