If you are looking for a deposit scheme to secure your girl child’s future and do not want to invest in high risk plans, Sukanya Samriddhi Account is certainly for you. The scheme offers quite a healthy rate of interest and comes with a noble intent, i.e. to avoid making girl child a financial burden on parents and guardians. But still every financial plan has some drawbacks as well. We are providing drawbacks of sukanya Samriddhi account.
Drawbacks of SSA Sukanya Samriddhi Account Yojana
Launched with the current Union Budget 2014-15, the scheme is excellent and the fresh reviews truly evaluate it as a successful financial initiative that can go a long way. However, there are certainly few shortcomings that would come in way of few looking for comfortable and secure investment and, those are:
- No fixed rate of interest: The scheme offers a great interest rate of 8.6% per annum for FY 2016-17, which happens to be the best among all other small saving schemes; however, the ROI is not fixed for the entire tenure. It may keep varying every year with market trends and that may or may not be as decent as the current one.
- Premature withdrawal not allowed: A lot of people who are not financially secure have a habbit of using whatever money they have in the time of crisis. Since, there is a long lock-in period associated with the account; such kind of parents would not really be interested in operating Sukanya Samriddhi Account. Read more for Premature Withdrawal.
- High lock-in period of 21 years: The lock in period is a little on higher side for those who are looking for a shorter investment options. The mature proceeds could only be withdrawn either at the time of marriage of the girl child or for the purpose of higher education of girl child. 21 years of lock-in period may not go well with some people.
- No online transfer facility in post office: This is one of the major drawbacks of the scheme. We wonder how the government and policy makers could oversee the possibilities of online banking to be applied on this scheme. Today, when every thing is being done over internet, making this scheme a non-online subject will add to the discomfort of account holders and increase the work pressure on post office branches.
Last but not the least; the scheme would fully be managed as per each year’s union budgets and market performances. We may well understand that there would be lot of political influence on the scheme and hence the scheme may be susceptible to political instabilities, at anytime.
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