Sukanya Samriddhi Yojana (Calculator, Age Limit, Apply, SBI)
Sukanya Samriddhi Yojana (SSY) – is a small savings deposit scheme launched by the BJP government at center for girl children has stirred up the whole nation. As a part of Beti Bachao Beti Padhao campaign, the Sukanya Samriddhi Yojana is gaining popularity like wild fire. However, there are several aspects of this scheme which still remain hazy for many people who are looking forward to open an account under this Yojana.
In this article we will make an attempt to answer some of the most vital questions about the Yojana so that you can make an informed decision about participating. However, in general we will like to say that this is one of the noblest and of course, well-thought out schemes launched by the BJP government led by Narendra Modi. The scheme will help to ensure that the girl children of India, who are usually deprived of their basic rights can actually enjoy everything they deserve.
Without further ado, let us start with the Sukanya Samriddhi Yojana FAQ. We will try to keep things as simple as possible and explain everything in layman terms.
Who are the target audience ?
The SSY is designed only and only for girl children of India. The target audience is the deprived female children who are usually forced to quit studies or are forced to marry at an early age. Male children are kept out of the scope of this scheme because they are usually not the deprived ones in Indian culture.
Yes, there are age Limit. The table below sums up the age related criteria associated with this scheme.
|Minimum Age for opening account||0 years – new born or infants can be included in this scheme.|
|Maximum Age for opening account||10 years – the girl child should not be more than 10 years of age at the time of opening the account.|
|Grace period, if any||Till December 2015, the scheme allowed a grace period of 1 year. This means that female children of 11 years of age were also included in the scheme. Since January 2016, the grace period no longer exists.|
Are there any specific timings of the year for participating in the scheme?
No! There are no such timings. An account can be opened under the scheme anytime during the year provided the age restriction is fulfilled.
How many accounts can be opened under the scheme?
This is a very tricky question. The answer to this question is given in a tabular format to make things simple and clear:
|Condition||Number of accounts|
|If parents/guardians have just one daughter||1 account|
|If parents/guardians have two daughters||Maximum 2 accounts – one for each daughter|
|If parents/guardians have triplets at first birth or twin daughters at second birth**||Maximum 3 accounts – one for each daughter|
** Please note: In third case, the following conditions can happen:
- During first birth, 3 daughters are born (triplets) and in second birth 1 or more daughters are born – parents or guardians can open only and only 3 accounts for the triplet sisters from first birth. Daughter(s) from the second birth are to be left out.
- During the first birth, only 1 daughter is born and during the second birth twins or triplets are born – parents or guardians can open one account for the daughter from first birth and 2 accounts (one each) for maximum of two daughters from second birth. If triplets are born in second birth, one daughter has to be left out.
Thus essentially, the maximum number of accounts can never exceed 3, irrespective of the number of girl children in the family.
Who can open and operate an account under the scheme?
Under this scheme, an account can be opened only and only by biological parents of the girl child or by a legally assigned guardian of the child in case the parents are not alive. A girl child herself cannot open an account.
Account operation can be handled by parents or legal guardians on behalf of the girl child as long as they want. However, when the female child turns 18 years old, she gets the right to operate the account on her own and no intervention will be required from her parents or legal guardian unless she wants them to intervene.
What is the minimum amount that has to be deposited ?
Answer: Once again, the answer to this question is answered in a tabular format for clear understanding:
|Number of Accounts||Minimum yearly deposit||Time of deposit||Minimum deposit allowed||Maximum number of deposits allowed||Minimum number of deposits allowed|
|1||INR 1000||Anytime during a financial year||INR 100||10||1|
|2||INR 2000||INR 100 per account||10 per account||1 per account|
Please note that the minimum yearly deposit cannot fall below INR 1000 per account. This amount can be deposited in installments with minimum deposit per installment being INR 100, which means a maximum of 10 installments are allowed per account.
Is there any maximum limit for the amount that can be deposited ?
Answer: Yes, there is! The maximum amount that can be deposited in an account in any given financial year is INR 150,000. As with the minimum yearly deposit allowed, the maximum yearly deposit can also be deposited anytime during the year in installments with installment amounts best suiting the financial health of the depositor. The minimum installment limit still remains at INR 100.
Interest on deposits made
Yes, it is possible to earn interest. It is not about possibility. Any deposit in Sukanya Samriddhi Account is eligible for interest earnings. The yearly interest that will be paid is flexible or floating. This means that the interest rate may change every quarter. When the scheme started, the interest rate for fiscal year 2014-2015 was 9.10%. For the fiscal year 2015-2016, interest rate of 9.20% was announced, Current SSY interest rate is 8.4%. (FY 2017-18) This will change again or remain fixed in next fiscal year depending on the market conditions. The interest rate is announced by the government at the beginning of each fiscal year.
there are tax benefits! Let us take a tabular look into the tax benefits that can be expected from investing in this scheme.
|Tax benefits on amounts deposited||Any amount deposited in this scheme gets tax exemptions under section 80C subject to maximum exemption limit*|
|Tax benefits on interest earned||No taxes are applicable. Interest earnings are totally tax-free in the hands of the parents or guardians.|
|Tax benefit on maturity amount||This too is totally tax free and is applicable also for premature withdrawal of 50% when the girl attains the age of 18.|
* Please note that there are many other investments which have tax exemptions under section 80C and the maximum investment till which taxes are exempted is INR 150,000 (for all investments taken together). This means that 80C exemptions will be applicable for investments in Sukanya Samriddhi scheme till the maximum limit assigned for 80C. If the investments in this scheme exceed the total allowed exemption limit, the excess amount will be taxed.
Example: You have an FD of INR 80,000 and you invest INR 100,000 in Sukanya Samriddhi Scheme, the total investment amount becomes INR 180,000. This is greater than the maximum exemption limit of INR 150,000 defined by 80C. Thus, the additional amount (180,000 – 150,000 = 30,000) will be taxed. Since FD was made first, it will continue to enjoy full exemption but the investments in Sukanya Samriddhi Scheme will fall under taxation. Since, 30,000 will be taxed, the amount of investment in this scheme that will not be taxed is (100,000 – 30,000 = 70,000).
An account under this scheme will mature after 21 years from the date on which the account was initially opened.
For how long do you need to keep investing ?
This account will remain active for 21 years from the date on which the account has been opened. This means that if the girl participated at the age of 0 (i.e. as an infant), the account will stay active till she attains the age of 21 years. Similarly, if the age of the girl was 10 years on the date of participation, the account will stay active until the girl reaches the age of 31 years. However, one can has to keep investing for 14 years at least. After investing for 14 years, no further investments are allowed for the remaining 6 years but you will keep earning interests at a compounding rate.
Is it possible to withdraw money before the account matures?
Yes, it is possible. The scheme has provisions for premature withdrawal. However, there are some strict restrictions applied. Here are the options:
- 50% of the total deposited amount can be prematurely withdrawn.
- This withdrawal is not possible until the girl attains the age of 18 years.
- The only purpose for which the withdrawal is allowed in education. Withdrawal for any other purpose is not allowed.
Please remember that premature withdrawals are also tax free. Once 50% is prematurely withdrawn, you need to keep investing till the account attains the age of 14 years, after which no further investments are required. However, if account was already 14 years old before the girl attained the age of 18, no future investments are required after premature withdrawal but interest earning will keep coming at compounded rate.
What if you simply forget to deposit the minimum yearly amount for a certain year? Are their penalties?
If in a year you forget to deposit INR 1,000, the account will become dormant. It will not to closed completely. You can simply restart the account by paying a fine of INR 50. The account will restart from exactly where it stopped.
Who gets the maturity amount?
The girl child for whom the account was opened will be the person who gets the maturity amount. The parents or the legal guardians will not get the money. The maturity amount can be withdrawn only under following circumstances:
- The account has run its course of 21 years and girl wishes to withdraw the money.
- If the girl gets married before the account matures.
- Whenever the girl wishes to terminate the account after the account has matured. This means that the girl can keep the account active even after the account has remained active for 21 years. Interest earnings will continue until the girl actually decides to terminate the account and withdraw the funds.
What if the girl dies before the account matures?
That’s really sad but if that happens, the account will be closed and the accumulated amount (deposits plus interest) will be paid to the parents or the legal guardian.
What if the depositor dies before the girl grows up and becomes an adult?
This too is a very sad situation but is a possibility. In such a case, there may not be anyone else to deposit further money. In such a situation there are two possible scenarios that can be selected from:
- The family members of the girl can ask for account closure. The accumulated amount (interest earnings and actual deposits) will be handed over to the family of the girl.
- The family may wish to keep the account as is without investing any further until the account reaches its maturity age. Interest earnings will keep flowing as usual and the account will keep growing at a compounded rate. Once the account matures, the girl can withdraw the money as usual.
What if the girl moves to a different city in India?
That’s a possibility. In such a scenario, the account can be easily transferred to the other state. This transfer is allowed between bank and between post offices. This means that the account cannot be transferred from a bank to a post office or from a post office to a bank. It has to be bank to bank or post office to post office.
Are NRIs allowed to participate ?
No! NRIs cannot avail this scheme. It is an RBI mandate which says that NRIs cannot invest in small savings schemes in India. Since Sukanya Samriddhi Scheme is a small savings scheme, NRIs are totally excluded. But if you have already have this account and become NRI then you will avail all the benefits.
Are there online provisions for opening Sukanya Samriddhi Account?
As of now, Yes you can do this now but only in banks.
Government has listed three documents that are to be submitted in order to open an account under the Sukanya Samriddhi Scheme. However, participating banks may ask for additional documents in order to apply taxation rules properly. The three basic documents that must be submitted are:
- Birth certificate of the female child for age verification. The name of the child has to be clearly mentioned on the certificate.
- Identity proof of the depositor – this can be a legal guardian or one of the two parents.
- Address proof of the depositor – this can be a legal guardian or one of the two parents.
What if the birth certificate of the female child is not available?
It is possible that the birth certificate of the girl is not available. There may be multiple reasons for that. However, if the certificate cannot be furnished, there are two alternatives that can be used:
- A certificate issued by School Headmaster stating the date of birth of the girl child.
- A certificate issued by the hospital where the girl was born clearly stating the date of birth of the girl.
In both cases, it is mandatory to have the name of the girl child clearly mentioned on the certificate.
Which banks allow opening of Sukanya Samriddhi Account?
There are 28 authorized banks in total that are allowed to open an account under this scheme. Here is the complete list of all banks that can be approached:
|Alphabetical order||Bank Name|
|B||Bank of India|
|Bank of Maharashtra|
|Bank of Baroda|
|Central Bank of India|
|Indian Overseas Bank|
|O||Oriental Bank of Commerce|
|P||Punjab National Bank|
|Punjab & Sind Bank|
|S||State Bank of India|
|State Bank of Mysore|
|State Bank of Hyderabad|
|State Bank of Travancore|
|State Bank of Bikaner & Jaipur|
|State Bank of Patiala|
|United Bank of India|
|Union Bank of India|
Well, that’s pretty much everything about Sukanya Samriddhi Yojana. In case you have other questions, feel free to drop your comments.