Sukanya Samriddhi Account Deposit Scheme is one of the most popular small saving schemes in India. This scheme was launched in January, 2015. Since then, it has been estimated that around 76 Lakhs Sukanya Samriddhi Yojana Accounts have been opened across the country. The amount collected under these accounts is around Rs. 2, 838 crore (up to October, 2015).
Sukanya Samriddhi Account (SSA) can be opened in the name of girl child only. Post offices and Commercial banks (Public / Private Sector) have been authorized by the Govt to open SSAs.
Though Sukanya Samriddhi Scheme is a simple financial product, there has been some confusion with respect to some of its features, operation of account, premature withdrawal, account transfer, NRI & SSA, closure of account etc.,
To clear this confusion, the govt has recently issued a notification highlighting some new changes / amendments to ‘Sukanya Samriddhi Account Deposit Scheme’.
15 New Amendments to Sukanya Samriddhi Account Deposit Scheme Rules
Below are some of the revised rules of Sukanya Samriddhi Account;
- Definition of Account Holder & Beneficiary : Account holder means a person in whose name the Account is held. Girl child is the beneficiary under SSA. The amount can be deposited by the account holder (girl child) or by her parent/guardian.
- SSA & Adopted Daughter : The new rules have made it clear that Sukanya Account can be opened even in the name of an adopted Daughter.
- Resident Indian Girl Child : Only an Indian Resident Girl Child can be the Beneficiary under the SSA Rules.
- Rate of Interest : As per the old rules, the rate of interest will be declared on an yearly basis. Now, the Government can amend the Interest Rate from time to time. (Read : Latest Small Saving Schemes & Rate of Interest – New guidelines)
- Minimum Amount & Account Default Rules :
- The minimum amount that has to be deposited in SSA is Rs 1,000 p.a.
- If the min amount is not deposited, account will be treated as ‘Account in Default‘ and such accounts can be regularized on payment of a penalty of fifty rupees per year.
- The new rules also specify that if the defaulted account is not regularized within fifteen years of opening the account, then the whole deposit amount (including the deposits made prior to the date of default) shall be eligible to get Post Office Savings Bank interest rate at the time of its maturity.
- In case if the reason for default is due to the death of the ‘Guardian’ of the child, the above rules won’t be applicable. The account holder will get normal SSA interest rate.
- Maximum Deposit : The maximum amount that can be deposited in SSA is Rs 1.5 Lakh per fiscal year. In case deposit in excess of one lakh fifty thousand rupees in any financial year is accepted due to any accounting error, such excess amount will not be eligible for any interest. The depositor can withdraw such excess amount anytime.
- Online Payment Mode : As of now, deposits can be made in the form of cash/by cheque/by DD only. The new rules have clarified that ‘online payment mode’ (electronic transfer) is also acceptable provided that the post office or bank has access to CBS facility (Core Banking Solution).
- Interest Calculation Procedure : Under SSA, the interest is compounded on yearly basis. The interest amount is calculated for the calendar month on the lowest balance in an Account on the deposits made between the close of the tenth day and the end of the month. So, it is now clear that no interest is paid on deposits made after 10th of the month for that specific month.
- Duplicate Passbook : In the event of loss of passbook, a duplicate passbook can be issued on payment of Rs 50. The guardian or the account holder has to submit a written request to get a duplicate SSA passbook.
- Transfer of Account : SSA can be transferred from a bank to a post office branch (vice versa) at free of cost. The guardian or the account holder has to furnish proof of shifting of residence. Even if you are not relocating, you can transfer the account by paying a fee of Rs 100 to the post or to the bank to which the transfer is being made.
- Withdrawal for Education Purposes :
- Withdrawal of upto a maximum of fifty per cent of the balance in the Account at the end of the financial year preceding the year of application for withdrawal, shall be allowed for the purpose of higher education of the Account holder.
- Provided that such withdrawal shall not be allowed unless the Account holder attains the age of eighteen years or has passed tenth standard, whichever is earlier.
- The withdrawal can be made in lump sum or in installments not exceeding one per year, for a maximum period of five years.
- The guardian or the account holder has to submit a documentary proof of confirmed admission in an Educational institution (or) a Fee-slip from such institution.
- Account Closure & Age Proof : To close a SSA account, age proof has to be submitted to prove that the girl child is not less than 18 years of age.
- Account Closure & Marriage : Earlier premature withdrawal is allowed after the girl child’s marriage takes place but now withdrawal is possible even if Depositor is intending to get married.
- Change of Citizenship :
- If after opening of account, Account holder becomes a non-citizen or non-resident of India (NRI), he/she (guardian/parent/girl child) has to intimate the same within a period of one Month and her account will be deemed as closed.
- Interest is not be paid on such Accounts.
- Post Account Closure & Interest Payment : As per the old rules, post maturity (after 21 years from the date of account opening) even if account holder does not close the account he/she was eligible for interest till the final closure of the account. But as per the new amendments, if an account completes twenty-one years, no interest amount is payable.
I hope you find this post useful and informative. Are you contributing to Sukanya Samriddhi Account Deposit Scheme? Kindly share your experience and views on SSA.
(Image courtesy of chubphong at FreeDigitalPhotos.net) (Post published Date : 05-April-2016)
This post was last modified on July 11, 2023 11:12 am
Sreekanth ReddySreekanth is the Man behind ReLakhs.com. He is an Independent Certified Financial Planner (CFP), engaged in blogging & property consultancy for the last 14 years through his firm ReLakhs Financial Services . He is not associated with any Financial product / service provider. The main aim of his blog is to "help investors take informed financial decisions." "Please note that the views given in this Blog/Comments Section/Forum are clarifications meant for reference and guidance of the readers to explore further on the topics/queries raised and take informed decisions. The information provided, therefore, should not be viewed as financial, legal, accounting, tax or investment advice."
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Hi Sreekanth,
I had been a regular reader of your articles.All of them are very informative.I thank you for providing the detailed information about each and every investment options available.
I have one question,I invested 1.5 lakh last year in the SSA scheme last year.This year also I am planning to do the same.Do you think it is the best investment option?If not please suggest the other best investment options for a girl child.My daughter is 5 year old.Requesting your advise.
Dear Anjani,
As a responsible parent, the first priority is to have your life covered with adequate life insurance cover.
So, May I know if you have any existing life insurance cover? What about your health insurance?
Kindly read:
If life is unpredictable, insurance can't be optional.
Blocks of Financial Planning Pyramid.
SSA is a good scheme considering the safety aspect & tax benefits. It is one of the best debt investments on par with PPF. But one has to invest in other equity oriented options too to meet the Future education expenses of a kid. It is very tough to beat inflation with 8 to 9% returns. So, one has to invest in a combination of financial products besides investing in SSA.
Read:
Sukanya Scheme Review.
List of best Investment options.
Kid's Education goal & calculator.
Hi Srikanth,
Thank you very much for your reply.I am not having any insurance cover.My husband is having one LIC policy of 5 lakhs.Gone through your post on Insurance.I am thinking to opt for kotak policy.
Thank you once again for your advise
Nice and crisp update,
It will be good if you can add publish date, that will help us to make sure we are referring to latest articles and the information changes from portal to portal.
Dear Shailesh..I had received same suggestion from one of the other blog readers too, implemented the suggestion since 2 weeks. You can find the published date at the end of the post.
Anyways, thank you for the suggestion and keep visiting :)
so very nice plan bro
Hi Sreekanth,
Very good info on sukanya samridhi acc. but my question is, Is this the best plan for a girl child as of now or do we have better plans which gives better returns ?
I have a daughter of 2 1/2 yr old and planning to start something for her now, plz suggest ?
Dear joe,
First priority as a parent is to get adequate LIFE INSURANCE COVER. Then he/she can create a solid plan to accumulate wealth for long-term goals like Kid's education goal.
Kindly read:
Blocks of Financial Planning Pyramid.
If life is unpredictable, insurance can't be optional.
Kindly note that investing in SSA alone may not lead to achievement of required corpus. One needs to invest in combination of financial products based on his/her requirement/financial profile. But within the debt products category, SSA is one of the best options.
Kindly read :
SSA - Review.
List of best investment options.
Please confirm is it possible to transfer ac from post office to SBI and online transfer of funds to the account. If so procedure to do so.Thank you
Dear Dilip..As per the notification, YES. But it depends on the respective PO & SBI branch . Suggest you to check with your banker too.
Good info, as my father has opted this for his grand daughter, today I came to know full info, thanks once again
Hi Sreekanth,
What Happens to the SSA account if the Guardian(Father/Mother etc) who is paying the money for SSA of his daughter dies? Will the SSA account will be closed and the money will be refunded with the Interest?
Dear Narasimha Reddy,
The account holder (girl child) can continue the contributions (or) any other guardian can deposit the amounts (or) she can close the account and get the refund with the interest amount.
Dear SreekanthReddy,
Thanks for the update.
is good information sir
thank you very much
Question on Sukanya tax exemption -
If husband is account holder then can wife claim the amount under 80 C? or it should under wife's name to claim 80C? or is it possible to open joint husband and wife as account holders?
Please help.
Dear Ajith..Kindly note that the account holder is 'girl child'.
I believe that SSA account can not be opened jointly. So, whoever is the depositor (parent/guardian) alone can claim the tax benefit of up to Rs 1.5 lakh under section 80C in a Financial Year.
Thanks for replying Sreekanth.
Let me ask the question correctly.
If husband is the depositor and husband is not claiming 80 C then can wife claim that under 80C? like we do in LIC if husband does not claim his LIC premium then wife can claim. Does that holds true here also?
Thanks,
Ajith
Dear Ajith..No.
Dear Sreekanth.,
Could you explain the point no 8 ( interest calculation procedures) through an example for better understanding
Regards
Krishna
Dear Krishna,
To get interest amount for a specific month, one can deposit the contribution amount before 10th of the month.
For example: Let's say SSA balance till 10th is Rs 1 Lakh, and the depositor invests Rs 10k on 15th of the month. As per the rule, the lowest balance between 10th of that month and end of the month is Rs 1 Lakh (and not Rs 1.1 Lakh), so Rs 1 Lakh is taken into consideration while calculating interest amount for that specific month.
Thanks for your explanation
Regards
Krishna