It is basically a minor account with a monthly savings option. You may find it similar to traditional recurring deposits.
The account matures in 21 years from the date of opening the account or on the marriage of the account holder, whichever is earlier.
From time to time, the rate of interest changes, just like the public provident fund. The effective rate of interest is notified by the Government.
The interest rate is compounded annually and credited to the account every March.
The prevailing rate of interest is 7.6 percent per annum for the year 2022-23. Transferring of account is easy, as you can transfer it anywhere from one post office or bank to another.
The balance amount as well as the accrued interest are totally exempted from tax as per Section 80C of the Income Tax Act, 1961. So, if you are looking for a deposit with tax benefits, SSA is one of the viable options you can rely on.
What Is Sukanya Samridhi Account?
Sukanya Samridhi Yojana is a deposit scheme of the Government of India launched on December 12, 2019.
It is a savings deposit account, just like a traditional public provident fund or a recurring deposit account with banks and the India Post Office.
The account is only meant for a girl child who is under the age of 10.
Also, read about the Public Provident Fund Account.
How To Open Sukanya Samridhi Yojana Account for Your Kids?
The account has to be opened jointly with the natural or legal guardian.
The primary account holder will be the minor girl child. A guardian will operate the account on behalf of a girl child. Only one account can be opened in the name of a girl.
Sukanya Samridhi accounts can be opened at the Post Office and authorized banks. State Bank of India, HDFC Bank, Axis Bank, ICICI Bank, and Canara Bank are some of the popular banks that provide the service.
Here’s the process to open a Sukanya Samridhi Yojana account for your kids.
| 1 | No online account opening is possible. You have to either download the application form or get it from the bank. |
| 2 | Fill out the form by providing the account holder’s details, such as name, address, father’s name, date of birth, and details of the parent or guardian. |
| 3 | Mandatory documents are the minor’s birth certificate and KYC documents of the parent. |
| 4 | The parent has to sign the application form in favor of the child. Also, self-attest all the papers that you have submitted along with the application. |
| 5 | Once it is verified by the concerned official, your kid’s Sukanya Samridhi Yojana account will be opened in no time. |
| 6 | Get the passbook and make your initial deposit. You may also ask the bank to set automatic payments from your bank account on a specific day. |
Eligibility Criteria of SSA
A Sukanya Samridhi account can be opened by a guardian who has a girl child under the age of 10.
In a family, there can be a maximum of two girl children, or three in the case of twins if the second or first birth is a girl child.
Sukanya Samridhi Yojana Interest Rate 2023
Since 2014, the interest rates of the Sukanya Samridhi Yojana have decreased from 9.1 percent to 8 percent. Though, you may say 8 percent is a decent rate, considering the present market.
Required Documents to Open SSA
To open this account, you have to produce the following documents:
| 1 | Birth certificate of a girl child in whose name an account will be opened. |
| 2 | OVD (Officially valid documents) of a natural or legal guardian. |
| 3 | OVDs are documents acceptable at a bank or post office under the RBI’s KYC (Know your customer) guidelines. |
| 4 | OVDs may be Passport, Voter Card, Adhaar Card, Driving License, NREGA Job Card or letter issued by the National Population Registrar |
| 5 | A PAN card of the guardian is mandatory. |
Benefits of the Sukanya Samridhi Account
| 1 | SSA is a government-backed deposit scheme, which means the amount that you invest here is completely safe and secure. |
| 2 | A great plan for a Girl Minor Child. Since the deposit period is long-term, good capital appreciation is expected with its compounding interest calculation. |
| 3 | Investment in this plan is beneficial as Tax is exempted under Section 80C of the Income Tax Act. Moreover, the interest that you earn in this account is free from any tax. |
| 4 | The accumulated funds can be used for further studies for the minor girl child. Under the emergency requirement of a life-threatening disease, up to 50 percent of the accumulated fund can be used for medical treatment. |
| 5 | The attractive interest rate is the same as that of the PPF account. |
How to withdraw funds from Sukanya Samridhi Account?
This account is strictly under the supervision of the Ministry of Finance.
One can withdraw only once upon attaining the age of 18 to meet the expenses of further education. The eligible amount for withdrawal is limited to 50% of the balance at the end of the preceding financial year.
Otherwise, under normal circumstances, the account matures when the minor girl child attains the age of 21 or is married, whichever is earlier.
Subscription Amount of Deposit
This account can be opened with a minimum amount of ₹250, and thereafter, in multiple of ₹100 can be deposited.
Annually, the number of transactions allowed is 12.
A minimum of ₹250/- and a maximum of ₹1.5 lakhs can be deposited in a financial year. This account can be deposited for a maximum period of 15 years from the account opening date.
Sukanya Samriddhi Yojana qualifies for exemptions up to Rs. 1.5 lakh under Section 80C of the Income Tax Act. The interest accrued on the maturity of the deposit is tax-free.
Avoid Late Payment Penalties
In the sukanya samridhi account, there should be at least one deposit made in a financial year with a minimum amount of ₹250/- else the account will be treated as irregular.
There’s no need to worry if it happens. You can revive the account with the payment of a penalty of ₹50 along with the minimum specified amount per year.
For more details, please visit the website of the National Saving Institute of the government of India.
Conclusion
If you have a daughter whose age is under 10, you should open her a Sukanya Samridhi Yojana account. This bank account will help with her future expenses when she becomes an adult.
The tenure of the scheme is 21 years. The payment can be made in monthly instalments or you can deposit a lump sum amount below the prescribed limit within the financial year.
The interest rate of the scheme is 8 percent as of today. Quite a decent rate compared to other forms of investment.
And, moreover, you get the benefit of tax exemption under Section 80C. Great product for securing a girl child’s future.