Sukanya Samriddhi Yojana: Empowering the Girl Child's Future

Introduction

Sukanya Samriddhi Yojana (SSY) is a significant initiative launched by Indian PM, Narendra Modi in 2015. Predominantly designed for financial planning for a girl child's higher education and marriage, the scheme provides a robust avenue to ensure monetary security.

Who is Eligible?

Primarily, any parent with a girl child can open an SSY account. However, the scheme permits the opening of an account until the girl child attains the age of ten.

Where to open an SSY Account?

• SSY accounts can be opened at a post office.
• It can also be initiated with public sector banks such as SBI, Bank of India, etc.
• Private sector banks such as ICICI Bank, HDFC bank, and Axis Bank too offer facilities to open an SSY account.

Documents Required

Opening an SSY account requires basic documents like the birth certificate of your girl child and KYC-related documents like PAN card or Aadhar card.

Deposit Limit

The minimum deposit limit for the scheme is just INR 250 annually and can go up to INR 1,50,000 per year. The scheme also allows multiple deposits in a single year with a minimum amount requirement of INR 50 per deposit.

Tenure and Maturity

The SSY scheme matures after 21 years of account opening. If a girl child is enrolled when she is already aged ten, the account will mature when she turns 31. Therefore, it is advised to open an account in the same year the girl child is born to yield the maximum benefits.

Interest Rate

The applicable annual interest rate at the moment is 8%, compounded annually, subject to change by the government.

What is the EEE Category?

The SSY falls under the EEE (Exempt-Exempt-Exempt) category.

• The EEE notion implies that the principal investment made in the account is tax-deductible under section 80C of the Indian Income Tax Act.
• The interest earned on the deposit is also exempted from tax.
• Lastly, the total proceeds on maturity are non-taxable.

Exceptions & Withdrawal Rules

There are a few noteworthy exceptions to the rules regarding withdrawals.

• For the girl child's higher education, up to 50% of the account balance can be withdrawn, provided either the girl child has turned 18 or has completed her 10th standard.
• The entire money from the account can be withdrawn if required for the girl child's marriage, granted she is at least 18.
• In case of a life-threatening disease to the account holder, the entire balance can be withdrawn after the account has been active for a minimum of five years.

PPF vs SSY

For those seeking to choose between SSY and Public Provident Fund (PPF), it's crucial to note that there are substantial differences.

• The current interest rate for SSY is 8%, while PPF is 7.1%.
• The lock-in period for SSY is 21 years with exceptions, while for PPF, it's 15 years.
• Unlike PPF, loan against SSY account balance is not permissible.

Conclusion

In summary, the Sukanya Samriddhi Yojana is an excellent government initiative aimed at securing the financial future of a girl child. It encourages parents to save systematically for their daughter's higher education and marriage expenses.