Sukanya Samridhhi Scheme – Empowering Daughters

Gender inequality has been one of the most painful issues in our country for a long time. Traditionally goals of the male child would be given priority over that of the daughter’s including education. Education and wedding expenses for daughters would be treated as a liability. But with time, things are changing, daughters are aspiring for more, and achieving their dreams, their goals are no longer just a liability. Still, daughters’ financial goals could be very different from that of the male child, as you may already have learned. Investment schemes like ‘Sukanya Samriddhi Scheme’ are designed to make your daughters financially independent early in their lives.

Be it her education, marriage or even post-marriage life. If you are also anxious about meeting your daughter’s aspirations, you can rely on Sukanya Samriddhi Scheme especially designed for the little angels and their guardians. The scheme can help parents of a girl child to offer financial security as well as money for Education, Wedding and other financial goals of their precious daughters.

What is Sukanya Samriddhi Scheme (SSS)

The SSY is a girl child prosperity scheme under Beti Bachao Beti Padhao initiative of our Prime Minister Sh. Narendra Modi. The scheme was formally launched in January 2015. SSY account is to ensure a bright future for the girl children in India. There is a host of public and private sector banks as well as post offices which have been authorized by the Finance Ministry for offering Sukanya Samriddhi Account.

Why should you have an SSS Account

Following five reasons make it a perfect choice for saving for your daughters’ future:

• High Rate of Interest
• Tax Savings under section 80C for invested amount
• Long  Lock-in Period
• Sovereign Guarantee
• Interest Even After Maturity of Account

Rate of Interest

The rate of interest since its launch is brief in the table below

Time period	Rate of Interest applicable (P.A)
From April 1, 2015	9.2%
From April 1, 2016 to June 30, 2016	8.6%
From July 1, 2016 to September 30, 2016	8.6%
From October 1, 2016 to December 31, 2016	8.5%
From January 1, 2017 to August 31, 2017	8.6%
From September 1, 2017	8.4%

Opening the SSS Account Who, How and When

• The parents or guardian of the girl child can open the account and deposit the funds on a regular basis
• Various Post Offices and other Financial Institutions are authorized by the government for the opening of account under this scheme
• This account can be opened anytime from the birth of a girl child till she attains 10 years of age
• Only one account can be opened for a single girl child and maximum two accounts in case of two girl children

Documentation required

A fixed set of documents are required in order to open a Sukanya Samriddhi Account. These documents need to be submitted to either bank or post office. The list of required documents is mentioned below:

• Sukanya Samriddhi Account Opening Form
• Birth Certificate of girl child (Account Beneficiary)
• Identity Proof of depositor (Parent or legal guardian)
  • PAN card, Ration card, Driving License, Passport
• Address Proof of depositor (Parent or legal guardian)
  • Passport, Ration Card, Electricity Bill, Telephone Bill, Driving License

How much can be deposited in the SSS account

The account can be opened with an initial deposit of Rs 1,000. Thereafter, any amount in multiples of Rs 100 can be deposited, subject to the condition that a minimum of Rs 1,000 will be deposited in a financial year. The total money deposited in an account on a single occasion or on multiple occasions should not exceed Rs 1,50,000 in a financial year.

Deposits in the account can be made till the completion of 14 years, from the date of the opening of the account. After this period any deposits will not be made. The account will keep earning the applicable interest rate for the remaining 7 years or till it gets matured on your daughter’s marriage.

Investment Conditions in SSS

Minimum Deposit	Maximum Deposit
Rs. 1000	Rs. 1,50,000

What if Investment Conditions Are Not Met

If the investor does not deposit the minimum of Rs 1000 in a financial year, the account discontinues and can only be revived with a penalty of Rs. 50 per year of delay plus the minimum amount for all the default years. For example, say you do not deposit the minimum required Rs. 1000 in the SSY account for 4 continuous years. In the fifth year, you will need to deposit a total of Rs. 5000 plus Rs. 200 (50 x 4) as a penalty for the default years.

Other Conditions of Sukanya Samriddhi Scheme

Maturity of the scheme

The scheme gets matured on completion of 21 years from the date of opening of the account or as the girl child gets married, whichever is earlier. Please note that the girl attaining the age of 21 years has no relevance to maturity of this scheme.

Premature Withdrawal and Account Transfer

Sukanya Samriddhi Scheme has been launched across India and hence the account is transferable to any part of the country in the situation of the account holder or depositor moving to other places.

In the event of the death of the account holder, the account will be closed immediately. On production of a death certificate issued by the competent authority, the account is closed and the balance along with the interest is paid to the guardian of the account holder.

Withdrawal of deposit amount is allowed only if the account has been active for at least 14 years. Only up to 50% of the deposit amount can be withdrawn before the girl child reaches the age of 18. This partial withdrawal is allowed only if the money is required for tending to some serious medical illness or on account of higher education or marriage expense of the girl child. Now onwards the account can be closed after the account holder attaining 18 years of age. Full amount can be withdrawn after the age of 18.

The most important rule regarding Sukanya Samriddhi Scheme is that any kind of withdrawal can be made only by the girl child in whose name the account has been availed. This feature is believed to lend a lot of financial freedom to women in future. One very important point about the scheme is that the account ceases to operate once the girl gets married.

Who can Operate the Account?

As mentioned earlier the account will be opened by the parents or legal guardian of the child and only they would be operating the account until the child attains 10 years. After 10 years the girl child can operate her account on her own if she chooses to.

Sukanya Samriddhi Account for the NRI Girlchild

A girl child is eligible for an SSY account only if she is a resident Indian citizen when the account is opened and remains so until the maturity or the closure of the account.

Non-resident Indians can open an SSY account. In fact, if you or your child’s residential status changes to non-resident or she take up another country’s citizenship during the term of the scheme, no interest shall be paid from the date of citizenship or residential status changes and the account will be considered closed.

Tax Benefits of SSS Investments

Currently, Sukanya Samriddhi Scheme offers the highest tax-free return with a sovereign guarantee and comes with the exempt-exempt-exempt (EEE) status:

Payment / Income	Tax treatment
Deposited amount	Exempted from Tax under Sec 80 C of IT Act up to Rs. 1.5 lakh in one F.Y.
Interest received	Exempt
Maturity amount	Exempt

How the Scheme Works

As the Monthly deposits will vary with person to person, and Rate of Interest also keeps changing it is very difficult to calculate the precise value of this scheme. However, with few standard assumptions, we can arrive at an approximate amount of maturity benefit achievable through the scheme.

Assuming:

• The rate of interest remains an average 8.5% per year for all the 21 years
• Yearly contributions made on April 1 every year; i.e. the beginning of the financial year
• Yearly investment into the account is Rs. 10,000
• And, nothing has been withdrawn before the maturity

Here you have the estimate of the growth of your invested amount:

No. of years	Annual contribution (Rs.)	Balance at the start of the year (Rs.)	Balance at the end of the year (RS.)
1	10,000	Nil	10,850
2	10,000	10,850	22,622
3	10,000	22,622	35,395
4	10,000	35,395	49,254
5	10,000	49,254	64,290
6	10,000	64,290	80,605
7	10,000	80,605	98,306
8	10,000	98,306	117,512
9	10,000	117,512	138,350
10	10,000	138,350	160,960
11	10,000	160,960	185,492
12	10,000	185,492	212,109
13	10,000	212,109	240,988
14	10,000	240,988	272,323
21	Final Value		482,050

“Everything you do for your daughter is cherished, catalogued and remembered.”

Where to Open Sukanya Samriddhi Account?

You can open the Sukanya Samriddhi Account at any of the designated branches of Nationalized Banks or Post Offices.