Sukanya Samriddhi Yojana

A part of the ‘Beti Bachao, Beti Padhao’ initiative, the Government of India introduced the Sukanya Samriddhi Yojana on 22nd January 2015. Sukanya Yojana scheme is designed to offer financial assistance to an Indian girl child. This investment plan can be opted by eligible beneficiaries at post offices and financial institutions in India.

An SSY account can be opened by the parents or legal guardians of the girl child in her name if she is less than 10 years old. However, as a parent, you are not allowed to open multiple SSY accounts; only 2 accounts can be opened for each girl child of the same family.

Features and benefits of Sukanya Samriddhi Yojana

The Sukanya Samriddhi Yojana is regarded as one of the most high-paying investment schemes in India. Important features and benefits of this investment scheme are –

 

  • Attractive interest rates

 

The interest rates applicable to SSY are fixed by the Government of India and are updated each quarter. For the current quarter of the financial year, depositors are offered an interest rate of 8.50%. This interest is compounded annually, thus helping to build a substantial corpus.

 

  • Minimum deposits

 

The minimum deposit of an SSY account is set at Rs.250 while the maximum deposit one can make in Sukanya Yojana scheme is Rs.1.5 lakh.

 

  • Multiple modes of payment

 

Parents, as well as the legal guardian of an Indian girl child, are eligible to deposit funds in the SSY account. Such payment can be made through multiple options such as cash, credit and debit cards, net-banking, cheque, etc.

 

  • Income tax benefits 

 

The Government of India has also introduced various tax benefits to encourage individuals to open an SSY account, which are –

  • The investments made towards this account are eligible for tax exemption under Section 80C up to Rs.1.5 lakh.
  • The interest on Sukanya Yojana Scheme is compounded and credited annually is also tax exempted.
  • The amount received on maturity on an SSY account is also not eligible for taxation.
  • Both beneficiary and depositor of this account can avail these tax exemptions.

In case of regular investment schemes, you should learn about the tax saving options under Section 80C.

 

  • Investment tenor

 

The investment tenor of an SSY account is comparatively longer than other investment schemes. The lock-in period depends is equal to the time until girl child is at least 21 years of age. However, she can also opt for a premature withdrawal for marriage or education purposes on attaining the age of majority i.e. 18 years. 

Such limitations are absent in case of investment options like fixed deposits. NBFCs like Bajaj Finance offer FDs where the investment tenors vary from 1 to 5 years. This NBFC also grants attractive FD rates with an option for premature withdrawal on paying a certain penalty fee.

How to open an SSY account?

Parents and legal guardians of a girl child can open an SSY account with the help of the following application process –

  1. Visit the online web portal of your financial institution and download the SSY application form. You can also visit the nearest branch of an authorised financial institution to collect the said form.
  2. Fill up the application form of SSY with the following details –
  1. Name of the girl child who is the primary account holder.
  2. Name of the joint account holder of the SSY account, i.e. a parent or legal guardian of the primary account holder.
  3. The amount of funds which is used as an initial deposit
  1. You are also required to attach these essential documents for verification purposes –
  1. Birth certificate of the girl child.
  2. KYC documents of account-holders.
  1. Next, you need to mention the cheque or DD number and date used for your initial deposit.
  2. Once the above information is provided, you need to submit this application form along with the copies of the required documents to your financial institution to activate the SSY account. 

Although the SSY is a government initiative, it comprises a few limitations. However, these can be overlooked owing to the above-mentioned features and benefits offered to maximise your financial yield for a long term investment.