Sukanya Samriddhi Account (SSA) is an investment scheme which can be opened for a girl’s child. The scheme is specially designed for girls higher education or marriage needs and should be opened by her parents or legal guardian(in case parents are missing). One can deposit a maximum of Rs 1,50,000 per financial year (Apr – Mar) and the yearly interest rate in this account is 9.1% compounded on a yearly basis. Note that this interest rate is not fixed and will be notified on a yearly basis or from time to time whenever applicable, very much like PPF.
The best part is that the investment in this account is exempted from income tax under sec 80C.
Amount of Deposit and Frequency
The minimum amount one has to deposit per year is Rs 1,000 and maximum amount is Rs 1,50,000. There is no limit of the number of transactions in a year. When you open the account for the first time, you have to deposit a minimum of Rs 1,000 and above that any multiple of Rs 100 (like Rs 1200 or Rs 1400 , but not Rs 1,450).
You also need to make sure that you do not skip your payments each year, otherwise a penalty of Rs. 50 will be levied for each year of non-contribution. At this point of time, it’s not clear if NRI can invest in these schemes or not. I don’t see any wordings in the official document published by govt. If someone has clarity on that, please share it in comments section.
This account can be opened before the girl attains 10 yr of age. So the moment the girl child is born , you can open this account in her name or wait for some years and open it later, but once the age of 10 is reached, one can’t open a new account for the girl child. You can deposit the money in the account only for the 14 yr period, from the date of opening, so the best thing is to open the account early itself, so that you get the maximum window of 14 yr to accumulate the money.
You will need following documents to open this Sukanya Samriddhi account.
Birth certificate of girl child
One can open only maximum of 1 account per girl child and in total only 2 accounts can be opened by parents for 2 girls (one for each), but in case the second birth has resulted in twins, then 3 accounts are allowed. You can’t open multiple accounts for the same child like you do in saving bank account.
Where can you open this account?
As per the notification, this account can be opened either in a Post Office or any public sector bank. You will get a passbook under this scheme which will have details of the account holder (daughter name) along with other information like date of opening etc, like it happens in the case of PPF account. Also, the account can be transferred to any city in India later if you wish.
As this has been recently announced, I believe the banks and post office must be in the implementation mode right now and must be training their staff on this. So if you immediately visit them to open an account, you might face problems as the staff might not be 100% clear of rules. So I suggest to wait for 2-3 months and let the whole thing settle down.
Maturity and Premature Withdrawal
Sukanya Samriddhi Account will get matured when the age of girl child reaches 21 yr or on her marriage date, if it’s before reaching 21 yr old. The good part is that if parents want to close the account before 21 year for marriage purpose, they have to give an affidavit that the girl has reached at least 18 yr of age, so that one can’t use it for child marriage (before 18 yr) .
One can also partially withdraw 50% of the balance amount after 18 years, for the education purpose and rest has to be left in the account so that it can be used for the marriage purpose.
Author : Brahma Reddy