This article tries to explain all about an Investment scheme for your girl child to secure her future for education,marriage and other needs. It is a beti bachao beti padhao Initiative by Goverment of India.The scheme is called SUKANYA SAMRIDHI YOJANA ACCOUNT.The government aims the financial security & bright future of girl child in India.
Benefits of Sukanya samridhi account?
- As such every deposits scheme, the rate of interest is the main attraction of SSY. The interest rate is revived quarterly.The rate of current Quarter ( July 2016 to September 2016) is 8.6%.While comparing other popular savings scheme like PPF( 8.10%) Recurring Deposit( 8.4%) is fairly a good one.
The method of interest calculation is compound interest, this will give more benefits to the depositor as the years passes. The compounding frequency of SSY is 1 year. That means the total interest is added to the deposit for the interest calculation upon completion of 1 year.
Example of Compound Interest: Compound interest is calculated on the Principle + Accumulated Interest.
Here is a typical example of compound interest.
- First Year = 1000 x 8.6 % = 86.00 (Note : Interest is calculated monthly)
- Second Year = 1086 +1000(This year deposit) x 8.6% = 179
- Third Year = 2265+10000 x 8.6% = 281
Note: Sukanya Samridhi Account calculate interest based on calendar month and on the lowest account balance between 10th and end of the month.
If you deposit before 10th of every month,that month interest will be calculated on the total account balance.
Suppose your account has 150000 balance on 01-07-2016 and deposited 5000 on 12-07-2016,The interest shall be calculated on 150000.If you deposit on 9-7-2016 the interest will be calculated on 155000.00
- Benefit Number two is the tax benefit, the deposit shall be deducted from total taxable income under section 80 C of income tax act subject to a marginal limit of 150000.00. ( You can claim a maximum of 1.5 lakh under section 80c ).
- The savings is tax free on Maturity.It follows Exempt-Exempt-Exempt (EEE) tax regime. Which means no tax is applicable in any of the following three stages of Investment.
- On every investment you make.
- when interest or return is earned on the investment.
- when you withdraw the lump sum
How to open an SSY account ?
The guardian, either legal or natural guardian can open an account in the name of beneficial child.He can approach a post office or bank with child birth certificate and proof of identity and proof of address of the guardian. It is important that the child did not reach the age of 10 ( Ten ) on the date of opening the account. Walk in to any of the following financial institution with the documents mentioned above and with Rupees one thousand(Rs 1000) which is the minimum initial deposit.The child must be a resident Indian citizen.
Account shall be opened in the name of girl child and a pass book issued upon opening Sukanya samridhi account bearing the name,address,date of birth of account holder,date of account opening,account number,name and adress of the guradian and the relationship with the account holder and amount deposited.
Where can I Open Account?
- Any Post office
The Authorized banks to open SSY are
- State Ban of India
- State Bank of Travancore
- State Bank Of Mysore
- State Bnak of Hyderabad
- State Bank Of Bikaner & Jaipur
- State bank of Patiala
- Allahabad Bank
- Andhra bank
- Axis bank
- Bank of Baroda
- Bank of India
- Bank of Maharashtra
- Canara bank
- Central bank of India
- Corporation Bank
- Dena Bank
- ICICI Bank
- IDBI Bank
- Indian Bank
- Indian Overseas Bank
- Oriental Bank Of Commerce
- Punjab&sind Bank
- Punjab National Bank
- Syndicate Bank
- Uco Bank
- Union Bank of India
- United Bank Of India
- Vijaya Bank
How to deposit in SSY?
The deposit can be made through cash,Demand draft,Check & online transfer.The check or demand draft shall be in favor of Post Master of the concerned Post Office for Example: “Post Master Baratooti Post office” or Bank Manager of the concerned branch. For example “The Manager, State bank of India,Chembur” where account is opened. Don’t forget to put the signature of the depositor and write the Account holder name and Account number on the back of the instrument while submitting chequeand drafts.
- You can make payment through CBS (Core banking solution) only if the concerned post office or bank has access to such e-transfer facility.
- In case of cheque deposit, the amount is to be said deposited only when the cheque is collected and credited to bank’s/ post office account.
- In case of cash/DD/e-transfer the date of submission or transfer to bank is considered as deposit date.
How many account can I open for my child or children?
A girl child can have only one Sukanya samridhi account. And If,in a family there are two girl children can open two account in the name of each girl.
Three account can be opened in case a twin birth in the first or second birth order and have total three girl children.Not more than three account can be opened in case of Triplets birth in the first order of birth( in the first delivery).
Now, an account can be opened for an adopted daughter also.
Important points you should take care to keep SSY account live
- You should deposit a minimum of Rs 1000 in every financial year.
- Any amount in the multiples of 100 can be deposited at any time.
- You can deposit a maximum of 150000 one lakh fifty thousand in a Financial year.
- Any amount deposited above 150000 in a Financial year due to any accounting error shall not be taken into account for interest calculation.
- Deposit may be accepted till 15th year from the date of opening the SSY Account.
- The default account can be made live by paying a fine of 50 Rupees/Year along the default amount. ( If deposit were unpaid for 3 years, fine would be 50x 3 =150 and Yearly minimum 1000 x 3 = 3000 total 3150.00 can do the re-activation of account)
Default account did not regularized till the completion of 15th year.Can I get any Interest?
Yes, But the you are only eligible for interest rate prescribed for post office savings bank at the time of its maturity.
The Interest is eligible as per SSY Norms for the default accounts holder only when the reason for default is the death of the beneficiaries parents who opened the account.
Withdrawal for the purpose of education
Withdrawal is allowed up to 50% of the total balance of the last Financial year ( The year preceding the application is made.) for the purpose of higher education of the beneficiary. The condition is that either the account holder should passed 10th standard or she should have reached the age of 18 years.
The application should accompany the proof such financial requirement, like fee slip, admission or offer letter from such institution.
Such amount shall be allowed in installment or in lump sum, subject to the maximum 1 installment per year and a total of 5 installment.
Withdrawal of not more than the fee and other charges required at the time admission is not allowed.
Maturity and account closure
An SSY account matured upon completion of 21 years from account opening date.The amount deposited along with interest shall be paid up on submitting an application for the closure along with documentary evidence of her identity, residential status & citizenship.
Premature closure of SSY
Premature closure is allowed in the following cases.
- In the event of death of the beneficiary account can be closed and the balance along with interest shall be given to the parent on producing death certificate from the authority.
- In the event of the change of residential status or change of citizenship of the beneficiary. An intimation should be given to the concerned Post office, bank within one month of such changes. In such cases the account holder shall not be eligible for interest from the date of such changes.
- The balance along with interest shall be returned to the account holder,if account holder is not alive,given to the guardian.
All above premature closure is allowed at any time for any reasons stated,but eligible for a post office savings bank interest only
- The premature closure is allowed in the case of life threatening diseases of account holder.or in the even of the death of her guardian,and the account holder facing hardship in the operation of account.The bank or concerned post office shall be satisfied with the compassionate situation of account holder.This premature closure is allowed only after the 5 years of completion of account.
Can I transfer my SSY account to another location
Post office to bank, bank to post office & one branch to another of banks & post offices anywhere in India is allowed subject to the following conditions.
- Free transfer is allowable only if furnishing proof of residential shifting
- Transfer is allowable upon payment of Rs 100 as a fee to the post office or bank to which the transfer is made.