May 172016
 

Education Withdrawal Conditions in Sukanya Yojana

Sukanya Yojana, better known as Sukanya Samriddhi Yojana in one of the flagship programs launched by Modi government at the center. With female children of India being the target group of this program, the Yojana comes with three very noble objectives:

  1. Ensuring financial security of a girl child when she comes adult.
  2. Making sure the education of the girl child continues uninterrupted.
  3. Making sure that the girl is not married off before she becomes an adult. This in particular is designed to cope with the problem of child marriage in India.

Education Withdrawal Conditions in Sukanya Yojana

The Sukanya Samriddhi Yojana was launched with these core objectives in mind. This small or micro investment scheme created quite a bit of stir in general public because of the attractive interest rates offered by the government to the account holders under this scheme. As a matter of fact, the interest offered by Sukanya Samriddi Yojana is higher than PPF or Public Provident Fund, which is one of the most popular investment areas that comes with government security.

However, despite the popularity of the Sukanya Yojana, there has been quite a number of questions lingering around and demanding clarifications. One such question that many people ask is the feasibility of withdrawal from account in case of higher education of the girl child.

Let us take a quick look at the education conditions in Sukanya Yojana

Age Condition: Being adult is mandatory

As mentioned earlier, one needs to clearly remember that this account forbids any withdrawal for the purpose of higher education unless and until the girl child has attained the age of 18 years. This means, that the girl needs to be an adult in order for the guardians to be able to withdrawal money for covering education expenses. As per Indian laws, higher education is possible only after a child reaches the age of 18. So, anyone attempting to withdraw money before 18 years is reach will fail.

Withdrawal Limit

One can easily think that since it is the education of the girl child on whose name the account has been opened, one gets a leeway to withdraw the whole amount for the education purpose. That is not true. Family members (guardians/parents) are allowed to withdraw only 50% of the account balance. This balance is however calculated for the previous year, i.e. one year before the year in which the girl became an adult.

A numeric example for withdrawal rules

One of the ground rules of Sukanya Yojana is that withdrawals can be made only after total 14 years of deposits are made. However, when it comes to higher education expenses, there is an exception to this withdrawal rule.

However, educational expenses allow partial withdrawals and hence, exceptions are allowed. Here are two allowed scenarios:

  1. 50% withdrawal once the girl attains adulthood and 14 years of deposits have been completed.
  2. 50% withdrawal once the girl attains adulthood but 14 years of deposits have not been completed.

50% withdrawal after 14 years of deposits

Let us assume that the Sukanya Samriddhi Account is opened on 1st of April 2015.

Birth date of girl: 6th August, 2006

Date when she becomes adult: 6th August, 2024

Girl completes her post-graduation at age of 23 i.e. 6th August, 2029 (a simplistic assumption that she gets a post-graduate degree exactly on her birthday). After that she applies for a higher degree (M. Phil or Ph.D.) with a reputed college in or outside India where a significant amount of money is required and some lump sum cash is required.

Since the account was opened on 1st of April, 2015, a total of 14 years of deposit leads to the date 31st March, 2029.

In this example, both conditions are satisfied:

  • The girl attains adulthood.
  • 14 years of deposits have been made.

So, 50% withdrawal is allowed. The girl can continue to keep the account or decide to close the account and make complete withdrawal too!

50% withdrawal before 14 years of deposits

Let us once again assume that the Sukanya Samriddhi Account was opened on 1st of April 2015. Similarly, we keep the same assumptions:

Birth date of girl: 6th August, 2006

Date when she becomes adult: 6th August, 2024

Girl completes her graduation at age of 21 i.e. 6th August, 2027 (a simplistic assumption that she gets a graduate degree exactly on her birthday). After that she applies for a higher degree (post-graduation) with a reputed college in or outside India where a significant amount of money is required and some lump sum cash is required.

Since the account was opened on 1st of April, 2015, 31st March, 2029 will be the date when 14 years of deposits are completed. However, since the girl applies for post-graduation in or outside India before that date and that she is an adult, 50% withdrawal is still allowed for covering educational expenses but the account cannot be completely closed until 14 years of deposits have been completed.

In this example, one condition is met and the other is not:

  • The girl becomes an adult – Condition Met.
  • 14 years of deposits completed – Condition Not Met.

Please remember that in both examples above, partial withdrawals will be allowed on the balance that was there in the account during the year before the girl becomes adult. This means that 50% withdrawals will be allowed on total balance in the account on 31 March, 2023.

Summary of education conditions in Sukanya Yojana in a tabular format (based on above examples)

Account opened on 14 years of deposits complete on Birth date of girl Date on which the girl becomes adult Date on which the girl applies for higher education and requires lump sum money Conditions met Withdrawal allowed Account closing
April 1, 2015 March 31, 2029 6th August, 2006 6th August, 2024 6th August, 2029 Adulthood attained – YES Partial – YES Allowed
14 Years of deposits made – YES Complete – YES
6th August, 2006 6th August, 2024 6th August, 2027 Adulthood attained – YES Partial – YES Not Allowed
14 Years of deposits made – NO Complete – NO

That’s pretty much everything you need to know about Education Withdrawal Conditions in Sukanya Yojana. In case you need further clarifications, feel free to drop a message.

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