Benefits of Sukanya Samriddhi Account

Sukanya Samriddhi Account

Launched in January 2015, Sukanya Samriddhi Scheme, a small savings scheme, helps an account holder accumulate savings for the education and wedding of his or her girl child. A Sukanya Samriddhi account can be easily opened - in any post office or designated bank branch across the country - on behalf of a girl child till she turns ten, by her guardian. One Sukanya Samriddhi account is permitted per child. A Sukanya Samriddhi account can be opened for up to two children (account can be opened in the name of the third child in case of triplets or twins). An account can be opened with just Rs.1,000 (initial deposit) and in multiples of Rs.100 thereafter. The minimum deposit is Rs.1,000 while the maximum is Rs.1.5 lakh in a financial year.

Main Benefits of Sukanya Samriddhi Account

The following are the main benefits of Sukanya Samriddhi Account

• Highest Interest Rate: The government is currently offering the Sukanya Samriddhi Account (SSA) at 9.20%. The interest rates for the scheme can be revised every financial year. According to experts, government wants to maintain around 0.50% differential between Sukanya Samridhi Yojana and PPF.  Sukanya Samriddhi Account  offers the highest interest rate of all small savings schemes available in the country. It is important to note that the rate of interest for this scheme is market linked.
• Lock-in Period

Sukanya Samriddhi Account matures when the girl child attains 21 years or when     she gets married, whichever is earlier. The girl child should, however, be 18 years old at the time of her wedding. Also, partial withdrawal (50% of accumulated amount) can be made for the purpose of education of the girl child when the latter turns 18. However, in PPF, partial withdrawals are allowed from the seventh financial year onwards. Sukanya Yojana, therefore, combines a long lock-in period with higher returns.  

• Tax Savings

Investors can avail up to  Rs. 1.5 lakh as deduction under Section 80C of the Income  Tax Act, 1961. The Sukanya Samriddhi Yojana qualifies for EEE tax status (100% tax free - deposit, withdrawal and growth). Account holders can avail of tax benefits available under the scheme.             

• Maturity Proceeds

Upon attainment of 21 years by the girl child, the Sukanya Samriddhi Account can be closed. One of the unique features of Sukanya Samriddhi account is that unlike other schemes, interest is accrued even after maturity. If account holders do not close the account at the time of maturity, the balance amount in the account will continue to earn interest until the account is closed.

• Account opening/Transferability             

A Sukanya Samriddhi account can be opened at any authorized bank branch or post office with simple documentation such as birth certificate, residence proof, identity proof and photographs of legal guardians/parents. A Sukanya Samriddhi account is opened by guardian/parent on behalf of a girl child till the latter turn 10. Sukanya Samriddhi account can be transferred across India.