Prime Minister Narendra Modi on 22-Jan-2015 launched Sukanya Samridhi Account (also known as SSA or SSY account ) for the girl child, as part of the Beti Bachao Beti Padhao (save the daughter and educate daughter) in Panipat, Haryana.
Designed for girl’s higher education or marriage need, Sukanya Samriddhi Account/Yojana is a Small Savings Special Deposit Scheme for a girl child.
Who is eligible under Sukanya Samridhi Account?
Gender: Girl child.
Citizenship: Child should be an Indian citizen(NRI, POI are not eligible).
Account holder name – The account should be opened in the name of a girl child by biological parents or legal guardians.
Who is a legal guardian – Where neither biological parent is alive or is incapable of acting, a person entitled under the law for the time being in force to have the care of the property of the minor.
Age limit: Girl child should be less than 10 years at the time of opening of the account.
Where can you open the Sukanya Samridhi Account?
Parents can open one account per girl child in post offices or in any branch of a commercial bank or public bank that is authorized by the Central Government under the scheme.
The account can be opened with an initial deposit of Rs 1000 (also the minimum yearly deposit ) and maximum yearly allowed deposit is Rs 1.5 Lakhs. If minimum (Rs 1000 per year) amount is not deposited, the account will be converted to irregular account and can be regularized/renewed on payment of Rs 50 per year as a penalty.
Deposits in Sukanya Samruddhi scheme can be made in the form of Cash or Demand Draft or Cheque and can be made up to fourteen years of opening the account.
Interest Rate and withdrawal from Sukanya Samridhi Account
The rate of interest is variable and notified by the central government on a yearly basis. Below table illustrates the SSA account interest rates until now:
|Financial Year||SSA - Interest Rate|
The maturity of the account is 21 years from the date of opening or if the girl gets married before completion of such 21 years (whichever is earlier) and since the interest is compounded it makes sense to open the account as soon as possible.
The account holder can withdraw, 50 % (half of the fund) of accumulated amount in SSA for her higher education when she turns 18 and remaining can be withdrawn when she gets married or reaches 21 (whichever happens earlier)
In the event of the death of the account holder, the account shall be closed immediately on the production of the death certificate. The balance shall be paid along with interest till the month preceding the month of premature closure of the account, to the guardian of the account holder.
Income Tax Benefits on Sukanya Samriddhi Account Scheme
The amount that is deposited into Sukanya Samriddhi Account will be eligible for income tax exemption under Section 80C of Income Tax Act, 1961.
Should you open a Sukanya Samriddhi Account ?
With high-interest rates guaranteed by the government of India, tax saving and most importantly building a corpus for your child’s education & marriage, we @ TIIS recommend that parents should open SSA account for daughters.