The Sukanya Samriddhi Yojana program is a popular small deposit system, which was started by the government as part of its “Save The Girl Child” or “Beti Bachao Beti Padhao” campaign.
The plan offers an interest rate of 7.6% and comes with numerous tax advantages.
It grants an income tax refund under Section 80C of the Income Tax 1961, and returns under the scheme as well as the maturity scheme are tax exempt.
A Sukanya Samriddhi Yojana account can be opened anytime after a girl’s birth until she is 10 years old, by the guardian. The account can be opened at any post office or authorized branches of commercial banks.
How to Open a Sukanya Samriddhi Account
The government had notified the rules for the scheme through a notification in December 2019. Under this, a Sukanya Samriddhi account can be opened by the natural or legal guardian on behalf of the girl from her birth till her 10 years.
In addition, only one account can be opened for the girl under the program. A maximum of two accounts can be opened for two female children in a family in accordance with the rules.
The birth certificate of the girl in whose name the account is opened must be presented by the guardian when opening the account at the post office or at the bank, together with other documents relating to identity and applicant’s residence.
Minimum and maximum balance required for an account
The account can be opened with an initial deposit of Rs 250 and thereafter any multiple amount of Rs 50 can be deposited, provided that a minimum of Rs 250 is deposited in a financial year, but the total funds deposited in an account on a single occasion or on several occasions shall not exceed Rs 1,50,000 during a financial year.
Deposits to the account can be made for up to 15 years from the date the account is opened. Thus, for a nine-year-old child, deposits must continue until the child reaches the age of 24.
The Sukanya Samriddhi investment matures in 21 years. However, deposits are only made up to 15 years. So, if the account was opened when the girl was nine, it will expire when she turns 30.
Thus, between 24 and 30 years (maturity date of the account), the account continues to earn interest on the balance.
If the minimum amount of Rs 250 is not deposited in a single financial year, then it becomes an account in default. A defaulted amount can be revived before the end of 15 years by paying the minimum deposit of Rs 250 and also an additional amount of Rs 50 as penalty amount for each year.
Even if an account in default is not activated, all deposits in it will continue to earn the interest rate applicable to the plan until the account is closed.