Rs. 250 a year might seem like a very insignificant amount to make any difference in anyone’s life, but this very amount can certainly make a huge impact in a girl child’s life if it is invested for her future through Sukanya Samriddhi Yojana, a Government of India’s scheme that encourages the guardians of girl children to create funds through small savings for their little girls’ education and marriage.
It is a sad reality in India that even in 21st Century, daughters are often seen in many families lesser than sons and these families start worrying about the expenditures of their marriages the minute the girls are born, which often leads to a lifetime of discrimination and denial of basic needs for them like education. The parents in these families would rather save money for their marriages than give them a decent education. Sukanya Samriddhi Yojana tries to solve both of these issues at one go and here’s everything you need to know about it.
Launching of the scheme
Sukanya Samriddhi Yojana, which translates to Girl Child Prosperity Account, was launched on January 2015 by PM Narendra Modi as part of ‘Beti Bachao, Beti Padhao’ campaign, and though ‘Beti Bachao, Beti Padhao’ quickly became a popular catchphrase, the same cannot be said about the former and still there are many who have even no clue of its existence.
Who is eligible to avail the scheme?
As the name suggests, this is exclusively for girls. Any girl child under the age of 10 years is eligible to get benefited from this scheme. Initially, her parents or guardians would operate her account until the time she reaches the age of 10 years. Once she attains 10 years of age, she can operate the account herself if she wishes to.
A child can have only one account and a family can have a maximum of two accounts for two girls under this scheme. However, if there are twins or triplets and all of them are girls, the family can open more than two bank accounts to accommodate all.
Where and how to open an account?
The accounts can be opened at any of the branches of the authorized banks or India Post offices. The authorized banks include State Bank of India, State Bank of Mysore, State Bank of Hyderabad, State Bank of Travancore, State Bank of Bikaner & Jaipur, State Bank of Patiala, Vijaya Bank, United Bank of India, Union Bank of India, UCO Bank, Syndicate Bank, Punjab National Bank, Punjab & Sind Bank, Oriental Bank of Commerce, Indian Overseas Bank, Indian Bank, IDBI Bank, ICICI Bank, Dena Bank, Corporation Bank, Central Bank of India, Canara Bank, Bank of Maharashtra, Bank of India, Bank of Baroda, Axis Bank, Andhra Bank and Allahabad Bank.
The different documents needed for opening an account are birth certificate of the girl on whose name the account will be opened, address proof of her parents or legal guardian and their proof of identity.
Advantages of opening an account
Sukanya Samriddhi Yojana is easily one of the best visionary schemes that have ever been introduced in the country to empower the girls and besides being able to be transferred anywhere in the country, here are a few other most important reasons why every girl child should have an account under the scheme.
1. Small deposits can be made throughout the year
The minimum amount needed to be deposited in these accounts is Rs. 250 in a year. When the scheme was first introduced in 2015, the amount used to be Rs. 1,000 but it has been slashed. The maximum amount that can be deposited is Rs. 1,50,000. The deposits can be made throughout the year in the form of small savings. In case an account fails to receive the minimum amount, the account becomes inactive. However, paying a fine of Rs. 50 and maintaining the minimum balance, the account can be reactivated.
2. A high rate of interest compounded annually and exemption from taxation
The present rate of interest (revised on October 1, 2018) on these accounts is 8.5%, down from 9.1% when it was first launched and the interest is compounded annually. The accounts reach maturity after 21 years from the day of opening, though investments need to be made only till the end of 14 years. After this period, the accounts will only earn interests at applicable rates. After the end of 21 years, no more interests are allowed.
For instance, if someone deposits Rs. 200 per month in one of these accounts, at the end of a year (s)he is investing Rs. 2,400 per year. This way, in 14 years, (s)he will be investing Rs. 33,600 but when the account matures, his/her daughter will receive a total of Rs. 1,15,667 at present rate of interest. Impressive, right? And the entire amount will be exempted from tax under section 80C of the Income Tax Act.
3. Withdrawal before maturity
While the amount cannot be withdrawn till its maturity, there is but an exception. Only the girl for whom the account has been opened can withdraw 50% from the balance, that too if she is 18 years of age and needs the money for her education. Another condition to make the withdrawal is that the account should have a deposit of at least 14 years.
Closure of an account before maturity
Though an account needs to be 21 years old to mature and therefore eligible to get closed, it can, however, be closed prematurely if:
1. The child for whom the account was opened dies or gets married before reaching the age of 21 years
2. The competent authorities ascertain that maintaining the account is causing undue hardships to the depositor
3. The child becomes a non-resident on non-citizen of the country
Sukanya Samriddhi Yojana is a farsighted scheme and will be remembered as one of the most impactful achievements of this government.