For decades, women weren’t provided with the same facilities and benefits as men in India. This has hampered their progress. With this goal in mind, PM Narendra Modi launched the “Beti Bachao Beti Padhao” campaign on 22nd January 2015. One of the most prominent schemes of this campaign was Sukanya Samriddhi Yojana. This article will discuss everything one needs to know about this scheme.
What does Sukanya Samriddhi Yojana incorporate?
This scheme provides an excellent choice for parents to fund their girl child’s future until marriage. Under the scheme, the girl’s family can set up a Sukanya Yojana account for her but they should do it before she turns ten years old. The account will expire 21 years after its establishment.
But this limit does not apply if the girl marries before the end of that period. The Sukanya Samriddhi Yojana account does not work after marriage. If no investments are made in any of the years, the account is considered non-remittent. The minimum amount that you can invest is ₹250 per year, while the maximum amount is ₹1,50,000 per year. The scheme is an EEE (Exempt Exempt Exempt) program. The first exemption refers to the tax deduction on your investment. The second exemption is for the interest of the accumulation phase. The final ‘E’ here means that the income earned from the investment is also not taxed.
You can set up a Sukanya Samriddhi Yojna account in most authorized post offices and banks. In certain cases, the procedure can be completed through online means as well. All relevant documents like birth certificates, Aadhaar cards, etc. should be submitted during the process.
Deposits should be submitted annually to the Sukanya Samriddhi Yojna account for 15 years after setting it up. No deposits are required after that. These deposit amounts continue to accrue until the expiration of the account. Annual interest will be charged on the account as determined by the Government of India. This interest is calculated based on your minimum account balance from the 5th to the end of the month. Henceforth, your best option would be to pay the instalments before the fifth day of every month.
Upon maturity, the girl will receive the entire term’s accrued principal and interest. Usually, the girl’s account is established and handled by her parents or guardians. Yet, she has permission to operate it herself from the age of 18 by submitting the required documents.
Fragmentary withdrawals of up to 50% of the collected amount are allowed. This can be done only when the girl reaches adulthood. Its purpose is to meet needs like further education, marriage, job requirements, etc.
Besides a written application, a document in the form of a fee slip from the institution is needed. You can also submit an admission offer from the school. The document should mention the required funds. It should also be certified. The withdrawal amount will not be more than the true demand for the fee. The charges in the admission offer or given during admission are also covered. It also holds for the fee slip.
The early closure/withdrawal of the account is only valid in the following cases:
- If the girl suddenly passes away.
- If the girl is no longer a citizen. The change in citizenship should be informed one month before the bank.
- The depositor is financially unable to contribute to the account.
- If the girl marries as soon as she turns 18. The owner of the account should appeal twice:
- One month before the marriage
- Three months after the marriage.
The Government uses G-sec yields as a basis to determine the interest rates quarterly. G-sec stands for Government security. The net profit which you can earn from the security is called yield. Currently, the Sukanya Samriddhi Yojna has a 7.5 interest rate. The account will be credited with annual compound interest at the rate the government will announce.
If the account holder chooses monthly interest, it will be calculated on the following basis:
- On the account’s balance in completed thousands
- On the balance that will be paid to the account holder
- In the fraction of thousands that remain, which will continue to earn interest at the rate in effect.
- The amount rounded off to thousands will be considered for monthly interest. The remaining balance will continue to accumulate interest at the current rate. The deposit made between the end of the 10th day and the end of the calendar month is used to calculate the interest. It will calculate interest for the entire month, based on the account’s lowest balance.
The returns offered by the Sukanya Samriddhi Yojana are a huge source of comfort to families. Currently, its interest rate is 7.6% annually. It is higher than the interest earned on bank deposits and a few other scheme instruments. This makes it a safe option for families to invest in a girl’s higher education or future marriage.
Let’s sum up all the advantages of the SSY scheme.
- The account can be opened with a deposit of a mere Rs.250, making it affordable for millions of families in India.
- You can withdraw nearly half of the entire accumulation. This will likely meet the individual’s needs in studies and marriage.
- There is no tax on the annually compounded interest. The same goes for the sum received when the account expires.
- You are not required to make further investments as soon as the account reaches fifteen years of age. The collected savings will keep accumulating interest until the owner shuts it down.
Families often search for an income source for the bright future of their daughters. Sukanya Yojana is like a ray of light for them. It includes a sovereign guarantee. The scheme is an EEE program that allows parents and daughters to benefit from it in many ways.