Sukanya Samriddhi Account is a savings scheme established by the Government of India.

SUKANYA SAMRIDDHI ACCOUNT is a "Girl Child Prosperity" scheme, and it aims mainly for the education and marriage of a Girl child.

History Of Sukanya Samriddhi Account

Sukanya Samriddhi Account scheme was launched by the Government of India on 22-January-2015.

It was launched under the campaign "Beti Bachao, Beti Padhao" meaning "Save girl child, educate girl child".

How Does Sukanya Samriddhi Account Work?

·         Open Sukanya Samriddhi Account in a Bank or Post Office in the name of your girl child

·         Deposit the amount (from Rs. 250 to Rs. 1.5 Lakhs) every year for the first 15 years

·         You don't have to deposit from 16^th year to 21^st year (that is 16^th, 17^th, 18^th, 19^th, 20^th and 21^st years)

·         Account will earn yearly compounded interest as per the interest rate (%) announced by the Government from time to time

·         After completion of 21 years (from the date of account opening), the account will mature, and the girl child can withdraw the entire maturity amount. Account will be closed after maturity

·         If the girl child gets married before completion of 21 years from account opening, then the entire accumulated balance can be withdrawn 

Features

·         Exclusively for girl children

·         Established by the Government of India

·         Safe and guaranteed returns

·         Income tax benefits

·         Currently, high interest rate compared to other savings schemes of "Debt" category

·         Partial withdrawal facility for the education of girl child

·         Full withdrawal facility for the marriage of girl child

Income Tax Benefits

Effective 01-Apr-2020, the income tax benefits will depend upon whether you choose old tax system or new tax system.

Old Tax System:

Deposit amounts up to Rs. 1.5 Lakhs in a financial year will be eligible for tax deduction under Section 80C of Income Tax Act.

Interest earned and withdrawals are tax free.

Maturity amount is completely (100%) tax free. 

New Tax System:

No income tax benefits. The deposit amount won't get any deduction benefit under Section 80C of Income Tax Act.

Interest earned and withdrawals are tax free.

Maturity amount is completely (100%) tax free.

Who Can Open the Account?

Parents or legal guardian of a girl child can open the account in the name of the girl child.

Sukanya Samriddhi Account can also be opened in the name of adopted girl child.

Age of the girl child should be less than 10 years at the time of account opening. That is, from new-born baby to less than 10 years of age.

The girl child is called the "Account Holder" and the parent or guardian is called the "Depositor" in this scheme.

Parent or legal guardian will operate the account till the girl child reaches 18 years of age.

Girl child can operate the account by herself when she reaches 18 years of age.

How Many Accounts Can Be Opened?

There should be only one account in the name of a girl child.

Maximum of 2 accounts can be opened in the name of two different girl children.

You can open more than two accounts if you are blessed with more than 2 girl children on the first birth.

You can also open more than two accounts if you are blessed with 2 or more girl children on the second birth if you had only one girl child on your first birth.

Where Can You Open the Account?

You can open Sukanya Samriddhi Account in

1.     Authorised Bank branches or 

2.     Any Post Office 

Documents Required

The following documents are required to open Sukanya Samriddhi Account.

1.  Birth certificate of the girl child

2.  Identity proof of the Parent or Guardian

3.  Address proof of the Parent or Guardian 

Deposit Limits

The following are the deposit limits for a financial year.

·         Minimum - Rs. 250

·         Maximum - Rs. 1.5 Lakhs

·         Deposit amount should be in multiples of Rs. 50

There is no limit on the number of deposits made in a month or in a financial year.

If you deposit more than Rs. 1.5 Lakhs in a financial year by mistake, the additional amount will not earn any interest and you can withdraw it any time. 

Deposit Period

Deposit period is only the first 15 years. That is, you need to deposit every year from the account opening date till the completion of 15 years.

Though this scheme has a maturity period of 21 years, you are required to make deposits for the first 15 years only.

After 15 years, you cannot deposit any amount into this account.

After 15 years, your account will be keep earning the yearly compounded interest as per the interest rate (%) announced from time to time by the Government of India for the remaining 6 years (that is 16^th, 17^th, 18^th, 19^th, 20^th and 21^st years).

Note that the deposit period was 14 years when the scheme was launched. But, in March-2016, this was updated to 15 years. 

How To Deposit?

You can deposit into your Sukanya Samriddhi Account in one of the following ways.

1.  Cash

2.  Cheque

3.  Demand Draft (DD)

4.  Online Transfer

The details about each of the deposit mode is given below.

1) Cash:
Date of deposit will be the same day. 

2) Cheque:
Cheque drawn in Favors of the Postmaster of the Post Office or the Manager of the Bank where the Account is opened.

Date of deposit will be the date of encashment of the cheque. 

3) Demand Draft (DD):
DD drawn in favour of the Postmaster of the Post Office or the Manager of the Bank where the Account is opened.

Date of deposit will be the date of submission of DD. 

4) Online Transfer:
Bank or Post Office should be using CBS (Core Banking Solution).

Date of deposit will be the date of deposit of money into the account. 

Default Or In-Active Account

If you don't deposit the minimum amount of Rs. 250 in a financial year, then the account will become "default" or "in-active" account.

To make the account active, you must pay a penalty of Rs. 50 for each year of default and minimum deposit amount of Rs. 250 for each year of default.

For example, if your account is in-active for 4 financial years, then to make it active, you have to pay a penalty of Rs. 200 (that is 50 x 4) along with minimum deposit amount Rs. 1,000 (that is 250 x 4).

To make the account active, you have the period of 15 years from the date of account opening.

Even if you don't make your account active within 15 years of account opening, then entire deposit amount (amount deposited even before the date of default) will earn interest as per the interest rate applicable to the scheme from time to time till maturity date. 

Interest Rate (%)

Current annual interest rate is 7.60%.

The interest rate is not fixed, and it will be announced by the Government from time to time.

From 01-Apr-2016 onwards, the interest rate has been announced on a quarterly basis. Note that it used be on a yearly basis earlier. 

Compounding Frequency

Sukanya Samriddhi Account scheme follows yearly compounding frequency.

That is, interest is calculated on a calendar month basis and credited into the account at the end of the financial year.

Monthly interest is calculated on the lowest balance between the close of 5^th day and end of the month.

For example, you have Rs. 5,000 in the account on the 5^th day of the month. You deposited another Rs. 5,000 on 20^th of the month. At the end of the month, your account will have Rs. 10,000. But interest will be calculated for Rs. 5,000 only.

It means that if you deposit on or before 5^th, then you will earn interest for that month.

If you deposit after 5^th of the month, then you will NOT earn interest for that month. But you will earn interest in the next month only.

So, the best time to deposit in SUKANYA SAMRIDDHI ACCOUNT scheme is on or before 5^th of the month. 

Maturity Period

Maturity period is 21 years from the date of account opening.

Sukanya Samriddhi Account will mature on completion of 21 years from the date of account opening.

On maturity, the entire (100%) balance, including interest, will be paid to the girl and the account will be closed.

To get the maturity amount, the girl must submit identity proof, address proof and Indian citizenship.

Note that the girl reaching the age of 21 years has no relevance to the maturity of this scheme. 

Marriage before Maturity Period:

If the girl is planning to get married before the maturity period of 21 years, then the girl can request the concerned Bank or Post Office to close the account and pay the maturity amount.

Such account closure request can be made a month before marriage or within 3 months after marriage.

Such account closure request should be made with the submission of age proof to prove that the girl will be 18 years of age or more on the date of marriage.

The concerned Bank or Post Office will pay the account balance along with interest, till the date of request for closure, to the girl child and close the account.

Note that it is not compulsory to close the account following the marriage of the girl child. You have the option to keep the account open beyond marriage till the completion of 21 years from account opening date. 

No Interest After Maturity:

Note that interest will NOT be paid after the maturity period of 21 years.

If you forget to close the account after 21 years, then interest will NOT be paid after the maturity date. 

Partial Withdrawal

Partial withdrawal facility is allowed when the girl child reaches 18 years of age or has completed 10th standard, whichever is earlier.

Partial withdrawal facility is allowed only for the purpose of education of the girl child.

For this withdrawal, you should submit the proof of "admission offer" for girl child into an educational institution or "fee slip" to be paid to the educational institution.

Your eligible withdrawal limit will be the lowest of the following 2 things.

1.      Maximum of 50% of the balance standing at the end of the financial year just before the year of withdrawal

2.      Actual "admission fees" or "fee slip" to be paid to the educational institution

For example, your eligible withdrawal limit may be Rs. 2 Lakhs. But the college admission fees and subsequent year fees may be around Rs. 1 Lakh. In this case, you can withdraw a maximum of Rs. 1 Lakh only.

You can withdraw as a onetime lump sum amount or one withdrawal per year for a maximum of 5 years. Yearly withdrawal amounts need not be equal. 

Pre-Mature Closure

You can close the Sukanya Samriddhi Account before maturity under the following situations.

1.     Death of girl child

2.     Girl child becomes NRI or citizen of another country

3.     Extreme difficulties in maintaining the account

4.     For any other reasons

The details about each of the situation are given below.

1) Death of Girl Child:

If the girl child dies during the tenure of Sukanya Samriddhi Account, the account can be closed immediately by producing the death certificate.

The account balance along with interest, till the date of death of girl child, will be paid to the parent or guardian of the girl child.

The interest for the period between date of death and date of account closure will be paid as per the interest rate of Post Office Savings Bank (SB) account for the balance. 

2) Girl child becomes NRI:

During the tenure of Sukanya Samriddhi Account scheme, if the girl child becomes NRI (Non-Resident Indian) or Citizen of another country, then it has to be notified to the concerned Bank or Post Office where the account is held within a period of 1 month from the change of residency or citizenship status.

Following the notification, the account will be closed pre-maturely. The account balance along with interest, till the date of residency or citizenship change, will be paid to the girl child.

If any interest credited into the account after the date of residency or citizenship change, will be debited from the account and it will be paid to the Government by the Bank or Post office. 

3) Extreme difficulties in maintaining the account:

In case of extreme difficulties in maintaining the account for reasons such as life-threatening diseases to the girl child or death of the parent or guardian, then the concerned Bank or Post Office can allow pre-closure of the account based on sympathy subject to sufficient documentation.

However, in this case, pre-mature closure will be allowed only after completion of 5 years from the date of account opening.

In this case, the entire account balance along with interest, till the date of closure, will be paid to the girl child or parent. 

4) For any other reasons:

Pre-mature closure of Sukanya Samriddhi Account may be allowed, after opening the account, for any reason other than mentioned above in Point #3 (Extreme difficulties in running the account).

In this case, the entire deposit amount will earn interest as per the interest rate of Post Office Savings Bank account only. 

Loan Facility

No loan facility is available in this scheme. 

Nomination

Nomination facility is not available in this scheme.

If the girl child dies, the account will be closed immediately and the balance along with interest will be paid to the parent or the legal guardian of the girl child. 

Passbook Facility

When you open Sukanya Samriddhi Account, you will be given a Passbook. This is like the one issued by the Bank or Post Office when you open a Savings Bank Account.

This Passbook will contain the following details.

1.     account number

2.     date of account opening

3.     name of the girl child

4.     date of birth of girl child

5.     address of the girl child

6.     name of the parent or guardian

7.     address of the parent or guardian

8.     relationship of parent or guardian with the girl child

You need to take the passbook when you deposit, receive interest, withdraw and close the account.

You also have the option to maintain the account completely in "online banking" method if the Bank or Post Office provides CBS (Core Banking Solutions) facility. 

Duplicate Passbook Facility

Duplicate passbook facility is available.

You can apply for duplicate passbook in case of loss or damage of the original passbook.

But you must pay a fee of Rs. 50 to get the duplicate passbook. 

Account Transfer

Account transfer facility is available.

You can transfer your Sukanya Samriddhi Account

1.     from one Post Office to another Post Office

2.     from one Bank to another Bank

3.     from Post Office to Bank and vice versa

Account transfer is free of cost (Rs. 0/-) if the girl child or the parent or guardian is shifting house from one place to another place.

If you want to transfer for other reasons, then you must pay Rs. 100 to the Bank or Post Office to which you want to transfer the account. 

NRI

NRI (Non-Residential Indian) are not eligible to open the account.

During the tenure of Sukanya Samriddhi Account scheme, if the girl child becomes NRI (Non-Resident Indian) or Citizen of another country, then it must be notified to the concerned Bank or Post Office where the account is held within a period of 1 month from the change of residency or citizenship status.

Following the notification, the account will be closed pre-maturely. The account balance along with interest, till the date of residency or citizenship change, will be paid to the girl child.

If any interest credited into the account after the date of residency or citizenship change, will be debited from the account and it will be paid to the Government by the Bank or Post office.