Sukanya Samriddhi Scheme Key Highlights: Sukanya Samriddhi Scheme is also known as Sukanya Samriddhi Account or yojana. It was launched by Prime Minister Narendra Modi 22-Jan-2015. The objective of the scheme was to facilitate them proper education and marriage expenses. The scheme is an investment based concept for a girl child under “Beti Bachao and Beti Padho” campaign. The scheme comes with the tax benefit under the deduction of 80C. There is a, rule of law which the principle is set to all the people called as Sukanya Samriddhi Account Rules, 2014. And the SSA is governed by the, Savings Banks Act, 1873. The account may be opened by the parent or legal guardian in the name of a girl child from the birth of the girl child till she attains the age of ten years and any girl child, who had attained the age of ten years, one year prior to the commencement of these rules, shall also be eligible for opening of the account under these rules. The account can be opened at the post office or any commercial banks in India, the parent or the legal guardian will be allowed to operate only one account in the name of girl. He can operate 2 accounts, in case in the event of birth of twin girls in the first stage or the second, he can operate 3 accounts. The parent or the guardian shall deposit minimum of Rs.1,000 to open an account, there after he can deposit the amount in multiple of 100 and with the minimum deposit of Rs.1,000 per year and maximum up to Rs1,50,000. The interest rate was set at 9.1% but later it was revised to 9.25% The withdrawal shall be allowed only when the account holder girl child attains the age of eighteen years, and the account will be matured when the girl child attains the age of 21years.
Advantage: This scheme is a great social initiative to secure the future of the girl child. This account comes with lock in period, but the to meet the needs of account holder like, education and marriage, they can withdraw up to 50% of the deposit amount when the account holder turns 18 years. The scheme comes with the interest rate of 9.2% , where the depositor is getting benefit of both RD and FD accounts. Even after the maturity of the account, if the account holder wish to continue she will get the same ROI would apply to the account. The Scheme comes with the taxation benefit a contribution of up to Rs.1, 50,000 lakh qualifies for income tax deduction under Section 80C of Income Tax Act. All payments to the beneficiaries including interest payment on deposit will also be fully exempted. The entire maturity amount of the Scheme and the interest earned are non-taxable. The scheme is convenient for all classes of people, where you need to pay only Rs.1, 000 to open an account and just deposit in the multiple of Rs.100. The account comes with the feature of, transfer of account anywhere in India. Account can be opened up to age of 10 years only from the date of birth. For initial operations of Scheme, one year grace has been given. The simple procedure to open an account makes you happy; all you need is a birth certificate of the girl child, address proof and identity proof of the parents of the girl child.
Disadvantages Sukanya Samriddhi Account has a very high lock-in period of 21 years. The deposited money matures only after 21 years from the account opening date. That means one cannot consider this as a short term investment product. This could be a drawback as people can’t consider this product for short term goals. The maximum number of accounts is also a problem. Per family max 2 account is possible, each girl one account. In case of a 3rd girl child as per Sukanya Samriddhi scheme rules it is not possible to open an account. Although the current interest rate of Sukanya Samriddhi Account is 9.2%. But it is not fixed. Every year the interest rate will be reviewed and it may change accordingly. We have seen in case of PPF account the interest rate have come down drastically in last few years. So in future there is no guarantee that Sukanya Samriddhi Account will be able to attract people with this interest rate and this could be the biggest drawback of this scheme. One cannot operate Sukanya Samriddhi Account online. This is one of the major disadvantages of this scheme. Every financial scheme should be accessed online to attract more people and access easily. May be in future Govt. will launch Sukanya Samriddhi Account online. The premature closure rules is also not good from short term point of view. Mainly if you compare SSA with PPF account premature closure. Although this is too early to comment on SSA scheme, but with time we may observe the Sukanya Samriddhi Account drawbacks free. I hope many of these disadvantages will be rectified and may be some more attractive feature will add under SSA scheme to make it more useful. By the time you can check out the SSA excel based calculator and check how much money you can accumulate with SSA account. No fixed rate of interest: The scheme offers a great interest rate of 9.2% per annum for FY 2015-16, which happens to be the best among all other small saving schemes; however, the ROI is not fixed for the entire tenure.
It may keep varying every year with market trends and that may or may not be as decent as the current one. Premature withdrawal not allowed: A lot of people who are not financially secure have a habit of using whatever money they have in the time of crisis. Since, there is a long lock-in period associated with the account; such kind of parents would not really be interested in operating Sukanya Samriddhi Account. Read more for Premature Withdrawal. High lock-in period of 21 years: The lock in period is a little on higher side for those who are looking for a shorter investment options. The mature proceeds could only be withdrawn either at the time of marriage of the girl child or for the purpose of higher education of girl child. 21 years of lock-in period may not go well with some people. No online transfer facility: This is one of the major drawbacks of the scheme. We wonder how the government and policy makers could oversee the possibilities of online banking to be applied on this scheme. Today, when everything is being done over internet, making this scheme a nononline subject will add to the discomfort of account holders and increase the work pressure on bank and post office branches. Last but not the least; the scheme would fully be managed as per each year’s union budgets and market performances. We may well understand that there would be lot of political influence on the scheme and hence the scheme may be susceptible to political instabilities, at anytime