All You Need to Know About Sukanya Samriddhi New Amendments 2016
Since its reign to power in 2014 Modi government has launched a wide range of social security schemes for the unprivileged and economically weaker sections of society. Sukanya Samriddhi Account Deposit Scheme is also one of them. It’s arguably the best savings deposit scheme offered by the government for benefiting the girl child. Therefore, its adoption in public has also been quick. Since its launch last year in January more than 76 lakh Sukanya Samriddhi accounts have been opened in various banks of country. More than 2,838 crore rupees have been saved in those accounts.
In this article we’re going to tell you everything that you should know about this scheme and how your girl child can benefit from it. Are you ready? Okay, let’s begin.
What this scheme is all about?
Sukanya Samriddhi Account Deposit scheme is a simple savings deposit scheme aimed at providing financial and social security to girls. It is a part of PM’s “Beti Bachao, Beti Padhao” campaign. When parents of a girl child open a savings bank account under this scheme, the account will attract an interest of 9.2% per annum rather than normal interest rate of 3% – 6% per annum. The parents will also be provided tax benefits for the money they deposit to that account.
Sukanya Samriddhi Accounts (SSAs) can be opened in the name of any girl child who is an Indian resident. If she’s more than 10 years old she can operate the account herself; if not then her parents can operate the account until she reaches the age of 10. NRIs can not open an account under this scheme.
The account can be opened by providing age certificate of girl along with ID and address proof of guardians.
There was a lot of confusion regarding rules of this scheme, so government has clarified them via a notification. Given below are the most important ones as per notification issued by the government:
- Minimum and Maximum Deposit Limits: The scheme requires a minimum of Rs. 1,000 to be deposited in the account annually. If this amount is not deposited, the account shall be treated as a defaulted account and will attract a penalty of Rs. 50. The maximum amount that can be deposited to the SSA in an year is Rs. 150,000. If due to some error deposit more than this maximum amount is accepted by the bank, the amount in excess won’t earn any interest for that financial year. The depositor may withdraw the excess amount anytime.
- Deposits for 14 years only: The maximum period for which you need to deposit any amount to the account is 14 years. After 14 years you don’t need to deposit anything and the account will continue to earn interest until maturity or closure, whichever happens earlier.
- Tax Redemption: You’ll receive income tax redemption on your deposits made to SSA as per section 80C of IT Act, 1961.
- Interest Calculation: Interest will be compounded annually at the rate of 9.2% per annum, and for each month it will be calculated on the least amount held in account between 10th and last date of month. Therefore, if you make a deposit after 10th of any month, it won’t earn any interest during that month. This is completely in-line with interest calculation method of regular accounts.
- Online Deposit: It’s worth pointing out that for long time there was a state of confusion regarding this rule. No one clearly knew whether online payment will be accepted or not. And it’s still not entirely clear actually. While government has clarified its stand that online deposits to SSAs are allowed, websites of many popular banks still show only three payment modes for these accounts: Cheques, Demand Drafts or Cash. Therefore, it’ll be better if you get it clarified from your bank.
- Defaulted Accounts: If a defaulted account remains like that for 15 years and is not regularized, its savings will earn the normal interest rate of Post Office Savings Bank accounts. This rule, however, won’t be applicable if reason of default is death of the parents of account holder. In that case account will continue to earn the SSA interest rate of 9.2%.
- Withdrawal Rules for Education: 50% of money held in account can be withdrawn for higher studies when account holder has passed tenth standard or reached the age of 18. However, for such withdrawal guardian or account holder must submit the documentary proof of admission in any higher education institute.
- Maturity of Account: The account reaches maturity when account holder attains the age of 21 or when account holder is married, whichever happens earlier. At that time entire money can be withdrawn and account can be closed. The account holder may continue the account even after attaining the age of 21, but it won’t attract any interest from that point.
- Transfer of Account: The account can be transferred to any CBS branch of the bank in which account is held, or even to a post office branch. The parents will have to submit a proof of their relocation to do so. In case relocation is not being done but account holder or her parents still want to transfer the account then it can also be done, but a fees of Rs. 100 shall be levied on such transfers.
- Premature Closure: If account holder dies before attaining the age of 21, the account can be closed prematurely. Premature withdrawal or closure of account can be allowed in some other extreme circumstances too. For example, it may be allowed to finance the treatment of account holder if she is suffering from any life threatening diseases. It can also allowed if account holder plans to get married.
- Duplicate Passbook: If passbook of any SSA is lost, a duplicate one can be issued when requested through a written application. A charge of Rs. 50 shall be deducted from the account to issue the duplicate passbook.
- Change of Citizenship: If account holder or her parents becomes NRI after opening the account, she or her parents must notify the bank within one month. No interest will be paid on such account and it’ll be closed.
So these’re the most important rules related to Sukanya Samriddhi Account Deposit Scheme. Now let’s take a quick look at most important points to sum things up:
|Scheme name||Sukanya Samriddhi Account Deposit Scheme|
|Interest rate||8.6% per annum|
|NRIs allowed||Not Allowed|
|Documents required||KYC documents of parents|
|Age certtificate of child|
|Minimum deposit||Rs. 1000 per annum|
|Penalty for not meeting minimum deposit requirement||Rs. 50|
|Maximum deposit||Rs. 150,000 per annum|
|Tax rebate||As per section 80C of the IT Act, 1961|
|Maximum time for deposit||14 years|
|Withdrawal for education||50% withdrawal allowed for higher education|
|Withdrawal for marriage||Allowed with account attaining “matured” status|
|Age for maturity of account||21|
|Premature closure||Allowed in extreme cases (i.e. death, treatment, marriage etc.)|
I hope that information provided here will help you in applying for an SSA. Take advantage of this scheme as early as possible to add a layer of financial security to your child’s life.