Sukanya Samriddhi Yojana- An Innovative Saving Scheme for Your Girl Child’s Future

Sukanya Samriddhi Yojana is a Govt. of India initiative which is tailored “for a bright future of your daughter”.

Introduced under prime minister’s Beti Bachao, Beti Padhao (Save a girl, educate a girl) program, the Sukanya Samriddhi Yojana is basically a small savings instrument which encourages parents or legal guardians to save for their girl child’s future.

The scheme was launched in January 2015, and this is a very good investment option where you can save money for a specific period of time at a higher interest rate and use the accumulated sum for your girl child’s education and marriage.

This article is all about this innovative savings scheme and moving forward, we will be discussing its features and benefits. We will also try to find out if it is the best investment option for your girl child.

Features and Benefits of Sukanya Samriddhi Yojana

Even though the scheme appears to be a small savings instrument, there are certain features and benefits that make it different.

Opening of Account:

• The account can be opened in post office or scheduled commercial banks.
• Parents or legal guardians can open the account in their girl child’s name up to 10 years of age.
• A maximum of two accounts can be opened per family under this scheme, only except if the depositor has twin girls as second birth or if the first birth itself results into three girl children.

Eligibility: The maximum age limit for the girl child is 10. As a grace period, any girl child born between 2nd February 2003 and 1st December 2015 is also eligible to have an account under this scheme.

Necessary Documents: There are three documents which are required to open an account under this scheme.

• Birth certificate of the girl child, who is the account holder
• Identity proofs of the parents or legal guardian (Voter’s Card, PAN Card, Passport, Aadhaar Card)
• Address proofs of the parents or legal guardian ( any identity proof as above with address mentioned in it, or recent electricity bill, telephone bill, etc)

One Account in the Name: Only one account can be opened in the name of a girl child. Multiple accounts are not permissible in a single beneficiary name.

Account Operation: The account can be opened and operated in the girl child’s name by her parents or legal guardians until she attains the age of 10. After that she can operate the account herself but the deposits may be made by her parents.

Amount of Deposit: The account can opened with an initial amount of Rs.1000 and thereafter the deposits will be accepted in multiples of Rs.100. While the account requires a minimum deposit of Rs.1000 in a financial year,  the total amount of money deposited in the account on a single occasion or multiple occasions should never exceed Rs.1.5 lacs in a financial year.

Maximum Duration of Deposit: The deposits in the account can be made till the completion of 14 years from the date of account opening. After that the deposited amount will continue to accrue interest until it reaches the 21st year.

Date of Maturity and Closure of Account: The account matures on completion of 21 years from the date of account opening or when the girl child gets married, whichever is earlier.

Remember, the account ceases to operate after the marriage of the girl child.

If the girl child gets married before the completion of such 21 years, the operation in the account is not permitted. In such a case, either the parents or the beneficiary must inform the bank or post office where the account is, in writing within 30 days from the date of marriage. The total sum of money including interest will be payable to the beneficiary.

However, the account can be closed and entire money can be withdrawn only when the girl child has attained the age of 21.

If the account is not closed or money is not withdrawn even after the maturity it will continue to earn interest.

Withdrawal of Money: 100% withdrawal of the deposited amount is only allowed after the girl child attains the age of 21. She is the only person who is allowed to withdraw the money.

Partial Withdrawal: Up to 50% of the money in the account can be withdrawn for higher studies or marriage only when the girl child attains the age of 18.

Premature Closure of Account: This is permissible in two specific circumstances.

• If the account holder (girl child) dies, the account will be closed and the money will be handed over to the legal guardian or parents on furnishing a valid death certificate in the name of account holder.
• If the government feels that it is extremely difficult or impossible for the parents or guardian to continue with the account. Permission will be issued in case of serious health problems.

Attractive Interest on Deposit: The interest rate for the scheme is decided and declared by the Ministry of Finance for each financial year. Last year it was 9.1%, this year it has reduced to 8.6% for the current FY.

As per the govt. Notification the interest is compounded annually. And the scheme offers monthly interest payouts calculated on balance in completed thousands.

Penalty on Irregular Deposits: If the minimum amount has not been deposited in a specific year, a penalty of Rs.50 along with the minimum prescribed deposit per year should be paid.

Mode of Deposit: Deposits can be made in cash, cheque, demand draft. Certain banks allow payment through Internet Banking and Standing instruction for auto credit to the account.

Transferable: The account can be transferred anywhere within the country, if the girl child shifts to a different place.

Tax Benefits: The investment in Sukanya Samriddhi Yojana is eligible for tax benefits under section 80C of Income Tax Act. A limit of Rs.1.5 lacs is exempted from tax. Further, the tax exemption comes under EEE

(Exempt-Exempt-Exempt) tax status which means principal, interest and withdrawal- all are exempted from tax. Thus this investment option is 100% tax free under section 80C.

Sukanya Samriddhi Yojana as an Investment Option for a Girl Child

Amid the rising issues on gender discrimination, the Sukanya Samriddhi Yojana is a definitely a praiseworthy initiative by the Govt. that aims at encouraging parents to save for their girl child. So that they don’t have to struggle for money if their daughter wants to pursue higher education and withdraw her dreams due to lack of funds.

Sukanya Samridhi Yojana offers a lot of benefit as an investment instrument. But, despite some obvious advantages, there are certain drawbacks too. Such as,

• If a family has more than two daughters (not the case of twins or triplets), not all of the daughters can obtain the scheme.
• The lock-in period appears to be too long.
• The interest rate is not fixed. It may vary every year, so the maturity amount can never be determined at any point of time.
• Unlike other fixed deposits, there are no added benefits like loan facility against this scheme.

However, the scheme caters to the needs of a specific segment of population that has been devoid of its financial independence since ages. And apparently, the advantages of the scheme outnumber the disadvantages.

Sukanya Samriddhi Yojana is much similar to the PPF scheme. And it’s is as beneficial as the PPF scheme is, despite their own set of merits and demerits.

Another important aspect of Sukanya Samriddhi Yojana is, it offers an additional duration of 7 years to accrue interest on the deposit. While the money can be deposited for 14 years, the account matures on the completion of 21 years. It means the deposited amount will continue to earn interest on annually compounding basis for 7 more years.

Considering all the aspects of the Sukanya Samriddhi Yojana, we can be sure that, this is an ideal investment option for your girl child below the age of 10.

If you have a girl child of this age, you should definitely consider opening an account under the scheme, since the interest rate is much attractive than in any other deposit scheme. Visit your nearest branch office of any of the banks mentioned in the list below or post office to know more about the account opening procedure.

Allahabad Bank

Andhra Bank

Axis Bank

Bank of Baroda (BoB)

Bank of India (BoI)

Bank of Maharashtra (BoM)

Canara Bank

Central Bank of India (CBI)

Corporation Bank

Dena Bank

ICICI Bank

IDBI Bank

Indian Bank

Indian Overseas Bank (IOB)

Oriental Bank of Commerce (OBC)

Punjab National Bank (PNB)

Punjab & Sind Bank (PSB)

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

Vijaya Bank

State Bank of India (SBI)

State Bank of Patiala (SBP)

State Bank of Bikaner & Jaipur (SBBJ)

State Bank of Travancore (SBT)

State Bank of Hyderabad (SBH)

State Bank of Mysore (SBM)

At present, the scheme is available with these banks only.

Recommended reading

SSY – Sukanya Samriddhi Yojana Account

New savings scheme for girls launched

Image Courtesy: mericlass.org,