Our noted Prime Minister, Narendra Modi had recently talked about the “Beti Bachao, Beti Padhao” when he launched the Sukanya Samriddhi Yojana, which was eligible for exemption less than 80C. In the current budget speech, the Finance Minster proposed to make the interest component along with the maturity proceeds as tax-free. To think of it, this scheme has now become the best small savings scheme available to investors who are otherwise conservative while investing. But can be this scheme even better than our good old Public Provident Fund (PPF)? Let’s find what this scheme has to offer and compare the two. Opening of SSY scheme Right now, Sukanya Samriddhi Scheme is a small savings scheme which can be opened by the parents or a legal guardian of a girl child in any post office or authorised branches of some of the commercial banks like State Bank of India, Bank of Baroda, Canara Bank and so on. Here, the girl child is termed as the “Account Holder” and the guardian is the “Depositor”. Any parent or legal guardian of a girl child who is 10 years or below can open this account in the name of the child. In a bid to make this scheme operational, an one year grace period of 11 yrs has been announced. This means that a parent or legal guardian of any female child who is born between December 2, 2003 and December 1, 2004, can open an account, with validity getting December 1, 2015. You will need the birth certificate of the girl child, along with an identity proof and residence proof while opening an account under this scheme. In case you have two daughters, you can open two accounts but the total amount invested cannot surpass Rs 1, 50,000 per annum. Rate of Interest The rate of interest flagged off for this scheme is at 9.1 per cent, which is higher than that of PPF at 8.7 per cent. Having said that, this rate of 9.1 per cent is not fixed for the tenure and may be revised every financial year just like all other small savings schemes, including PPF. When the recent Union Budget stated that this scheme would be exempted from taxes, nearly all investors who then found an interest rate of 9. 1 per cent quite unappealing are now keen on opting for it, say experts. The attention amount will get added to your account balance and is compounded wither regular monthly or annually, as per your choice. Because this is a debt-based scheme, it may not offer very high returns and hence can be used in a combination with other saving schemes, note experts. Duration of the Scheme The scheme matures on completion of 21 years from the day of opening the amount. Say if the account is not closed on maturity after 21 years, the balance amount will still continue to earn interest every year. In case your daughter’s marriage takes place before the maturity day i.e. before the completion of 21 years, you cannot operate the account beyond this date and no interest will be payable. Amount to be deposited/ invested While the scheme carries duration of 21 years, you are not required to make contributions for all these 21 years. You can invest only for the first 14 years, after which you need not deposit any further amount. However, your account will keep earning an interest rate for the remaining seven years. One can deposit a minimum level of Rs 1,000 annually in order to keep your account active. If you fail to do so, your account turns inactive and may be retrieved only after paying a penalty of Rs 50 combined with the minimum level of Rs 1,000. You could invest a maximum level of Rs 1, 50,000 annually, either by making regular contributions every month or by investing a lumpsum. Premature closure and partial withdrawal One can close the account as your child turns 18 provided she gets married before the withdrawal. You are allowed to withdraw 50 per cent of the balance standing at the end of the preceding monetary year, only after your child turns 18. In a way, there is a lock-in period of at least eight yrs. You cannot withdraw any amount before this period. Nomination facility While there is no nomination facility available as of now, in case of an unfortunate event like demise of a girl child, the account will be closed and the money will be handed over to the parent or guardian of the account holder.
Calculation
If I invest x Rs into the Sukanya Samriddhi Scheme account monthly, how much money will I get on account maturity? This is one of the most common queries we receive on daily basis. After reading through all the details of the account, every investor wants to know that how much money their investment can make. So we have created Sukanya Samriddhi Scheme Calculator. This calculator is simple to use and free for all. Our aim here is to allow every investor to create an informed decision about where and how much money they want to put in.