Understanding Sukanya Samriddhi Yojana

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Sukanya Samriddhi Yojana is one of the cornerstones of the Beti Bachao Beti Padhao initiative by Government of India which was announced by PM Modi on 22 January 2015. This Yojana encourages parents to save funds for the future education and marriage expense for girl child. It is basically a saving scheme for girl’s future, with relatively high rate of interest. The scheme has been well accepted by the masses in wake of the financial security and independence it would provide to the girl child as well as her parents and guardian. Since the launch of scheme, huge number of accounts has been opened.

• Criteria and Conditions to open an account –

1) Girl should be below 10 year;

2) Girl should be a citizen of India;

3) Birth Certificate of girl is compulsory;

4) Account can be opened even for an adopted girl child;

5) Parents or Legal Guardian can open account;

6) Address and identity proof of Parents or Legal Guardian and

7) Only one account is permitted per one girl child and maximum two girls from a family can avail of this scheme. However, third account is permitted only if mother gives birth to twin girls as second birth or if the first birth itself results into three girls being born).

• Where to open an account

1) Post Office.

2) Authorised Public and Private Sector Banks.

This is the best part of scheme as India has huge presence of Post Office branches across urban and rural areas and also citizens get choice of number of Public sector and Private sector banks to open an account where ever it’s convenient to them.

• Financial Benefits of SSY scheme

1) The Government of India fixes interest rates on quarterly basis based on the G-sec yields. The interest rate spread that the SSY enjoys over the G-sec rate of comparable maturity is 75 basis points. Interest rate will be calculated on 10th day of every month.

The interest rate since its launch is as follows:

For Financial year 2014-2015 : 9.1%

For Financial year 2014-2015: 9.2%

From April 1, 2016 – June 30, 2016: 8.6%

From July 1, 2016 – September 30, 2016: 8.6%

From October 1, 2016 – December 31, 2016: 8.5%

From January 1, 2017 – March 31, 2017: 8.5%

From April 1, 2017 – June 30, 2017: 8.4%

2) Deposits upto Rs.1.5 lakhs is eligible for exemption under Section 80C of Income Tax Act, 1961.

3) SSY offers the highest tax-free return with sovereign guarantee and comes with the exempt-exempt-exempt (EEE) status.

• Benefits, advantage and conditions of SSY Account

1) The amount for opening an account is Rs. 1,000. The depositor can deposit in multiples of Rs. 100 throughout the year with no limitations on number of deposits.

2) Minimum deposit to be made in an account is Rs. 1,000 and maximum is RS. 1,50,000 in a given financial year.

3) Deposit can be made in the form of Cash/Cheque/Demand Drafts. Deposits can be made online too.

4) Deposits in the account can be made till the completion of 15 years, from the date of the opening of the account or if the girl gets married before completion of 21 years (whichever is earlier). For a 7-year-old, deposits have to continue till the child turns 22. Between ages 22 and 28 (when the account matures), the account keeps earning interest on the accumulated balance.

5) Maturity amount to be given directly to the girl child.

6) 100% of the deposit amount can be prematurely withdrawn once the girl reaches the age of 18 years.

7) Account can be transferred anywhere in India if the girl child in whose name the account has been opened shifts to a place other than the city or locality where the account stands. The transfer is free of cost on furnishing the proof of shifting of residence of either the parent/guardian or account holder. If no such proof is submitted then the applicant has to pay Rs 100 to the post office or the bank to which the transfer is made.

8) Girl child/Account holder may operate her account, if she wishes to. This would give a lot of financial independence to the girl child as well.

9) This Scheme doesn’t have any middleman or agents which is one of the best parts of scheme.

• Drawbacks of SSY scheme

1) The scheme offers a great rate of interest which happens to be the best among all other small savings scheme. However rate of interest is not fixed for the entire tenure. It may keep varying every year with market trends and that may or may not be as attractive as the current one.

2) The scheme would be fully managed as per each year’s union budgets and market performances. There could be a lot of political influences on the scheme hence the scheme may be susceptible to political instabilities arising due to change of Governments.

3) Lock in period is a little on higher side.

4) Loan is not available against SSY account. .

· Performance of SSY Scheme

Since the launch of Sukanya Samriddhi Yojana, more than 1 crore accounts have been opened and an amount of Rs. 11,000 crore has been deposited in these accounts.

• Social Impact of SSY Scheme

A nation can only develop if half of its population is empowered and treated equally. If we study social data of developed world, they grew rapidly only when their women came out of their kitchens and started working in every field.

I have seen this change in Indian Society too during last 2 decades and its right time for a vast diverse and greatly divided (rural and urban) India to empower its girls so that she can independently make her choice as regards education and marriage.

Even today in 21st century, in most parts of rural India birth of a girl child doesn’t bring joy on the face of parents and in urban India lower and middle classes are constantly worried about expense of girl’s marriage from the day of her birth. Girls of our nation doesn’t need lectures on how weak and vulnerable they are; they just need financial security to demonstrate how strong and efficient they are and Sukanya Samriddhi Yojana will provide them this much needed financial security.

This Scheme will help to eliminate issues regarding gender inequality and it will surely change way of life in lower middle class homes and rural areas since parents no more have

to worry about marriage expenses and girl no more have to worry about her education. SSY will indirectly help to curb social menace like dowry, triple talaq, polygamy or child marriage as educated and self empowered women with right frame of mind would never accept it.

As our beloved PM Modiji once said ‘Best tool to fight against poverty is EDUCATION”.

I humbly request all of you who have read this article to enquire if your neighbour, labour, maid, co-worker, vegetable vendor, milkman etc. know about Sukanya Samriddhi Yojna or not and if they have not yet opened account for their girl child; it’s your duty to convince them to do so. Even if a single girl’s life gets changed due to us, we would indirectly benefit future generations of that girl.

By – Kashyap Khakharia

@just_kashyap

 

View expressed here are of the Author. Feedback can be given as responses to the article.

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