Sukanya Samriddhi Yojana
With interest rates rising, it was expected that the government will increase the rates for small saving scheme for the September quarter. These rates are revised every quarter. As a result, the rate for Sukanya Samriddhi Yojana (SSY) remains the same at 7.6 per cent.
Though the rates have been kept unchanged, small savings schemes can still help you save systematically and earn a guaranteed rate, as per the quarterly announcements. SSY is specifically meant to help parents save for the future of their daughters. Here is all you need to know about SSY.
What Is SSY?
SSY is a government-backed small deposit scheme which was introduced in 2015 under the ‘Beti Bachao, Beti Padhao’ campaign. Under this scheme, parents or guardians can open a bank account in the name of the girl child across any private and public sector bank for 21 years. It is meant to help save for goals such as daughter’s higher education or marriage.
Deposits made in SSY are eligible for tax deduction under Section 80C of the Income-tax Act, 1961.
How Do I Open An SSY Account?
The SSY account needs to be opened by the guardian of the girl child before she turns 10 years old in her name. The guardian may manage the account till the girl turns 18 years old.
The guardian can open only one account in the name of one girl child either at a post office or in any bank which is authorised by the Ministry of Finance for this purpose.
Parents can open this account for two girls in a family. In case of twins or triplet girl children, more than two accounts can be opened.
How Much Do I Need To Invest?
The minimum amount you need to deposit in SSY in one financial year is Rs 250 and the maximum Rs 1.5 lakh. After you deposit the minimum of Rs 250, subsequent deposits can be in multiples of Rs 50. You can also invest a lump sum.
There is no limit to the number of deposits made in a year though there is a limit on the amount.
The account would be regarded as “defaulted” if the minimum deposit of Rs 250 is not made in any fiscal year. However, an individual can revive the “defaulted account” by paying Rs 250 plus Rs 50 for each defaulted year.
How Is The Interest Rate Calculated?
The current rate of interest for SSY is 7.6 per cent per annum which is calculated on yearly basis. The interest is determined for the calendar month based on the account’s lowest balance between the fifth day’s close and the month’s conclusion.
The interest is credited to the account at the end of each fiscal year. One of the benefits of the scheme is that the interest earned is tax free.
When Can I Withdraw The Money?
The guardian can withdraw the amount from the SSY account when the girl child attains the age of 18 or when she passes Class X.
The money withdrawn should be at least 50 per cent of the balance available at the end of the preceding financial year.
Can I Close The SSY Account Prematurely?
The account can be closed after five years of opening, subject to two conditions: one, death of the account holder; two, on extreme compassionate frounds.
In the event of the death of the account holder, the SSY account can be closed prematurely. The balance in the account will be paid, along with the interest till the period preceding the month of the premature closure of the account, to the guardian of the account holder.
Is An SSY Account Transferable?
If the girl child in whose name the account has been opened moves to another location in India, the account can be transferred to the local bank or post office branch.
The transfer is free of charge as long as you provide evidence that either the account holder or the parent/guardian have moved. The applicant must pay Rs 100 to the post office or the bank where the transfer is being performed if no such proof is provided.
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