What are the new changes in the Sukanya Samriddhi Yojana scheme? In case you have no idea, here’s everything you need to know. Read on.
The Sukanya Samriddhi Yojana (SSY) will find a place in any list of top investment options in India that are both safe and offer a decent return on your investment. The Sukanya Samriddhi Yojana is a flagship government scheme designed for parents or guardians of a girl child to meet the financial requirements of the child’s higher education and marriage. It is a good debt investment, offering secured investment with 8.1% returns (July-Sept Quarter), to those eligible to invest in the scheme. The interest rate is revised every quarter.
Under the Sukanya Samriddhi Yojana, you can invest a minimum of Rs. 250 (earlier Rs. 1,000) and a maximum of Rs. 1,50,000 in a financial year. As a parent or guardian, you can open an account for your daughters who are 10 years old or younger. The rate of interest for the scheme is calculated on a yearly basis and is compounded annually. However, unlike bank FDs or RDs, the rate of interest is not fixed for the entire tenure and is reset every year similar to other Small Savings Schemes interest rates. This will have an implication on the ROI.
First introduced in January 2015, the government revised some of the regulations and investment guidelines for the scheme after the 2016 Budget and the minimum investment amount more recently. If you missed it, here is everything that you need to know about the changes in regulation for investing under the Sukanya Samriddhi Yojana scheme.
Changes made in Sukanya Samriddhi Yojana (SSY)
The government has made some minor but significant changes in the scheme that you should be aware of.
Revision of interest rates: Originally, when the scheme started in January 2015, the rate of interest was 9.2%. However, this interest is not fixed for the entire tenure but may keep varying. The new interest rate has been fixed at 8.1% for the July-September quarter.
SSY not available for NRIs: As per the new regulations, SSY is available only for resident Indian girl children. The girl child must be residing in India at the time of account opening and should continue to be an Indian resident until maturity or closure of the account.
If there is any change in residential status after the opening of the account under the SSY scheme, the parents or guardians must report the same to the designated bank or post office within one month. If the interest has been credited and there is a change in the residential status, the earnings will be returned to the government, with the balance being returned to the investor.
Change in maximum investment term: The maximum investment term under the scheme has been increased from 14 years to 15 years.
The introduction of e-transfer option: The revised regulations have initiated an e-transfer facility where parents or guardians can link their bank accounts with the SSY scheme. The linking of accounts allows them to transfer their annual contribution under the scheme online without having to physically visit the bank or the post office.
Changes in penalty rule: The minimum annual contribution under the SSY scheme per year is fixed at Rs. 250. A failure to pay the annual contribution attracted a penalty of Rs. 50 previously. Although the new regulations have not increased the penalty amount, if the minimum amount is not paid, the account will be considered as an ‘Account in Default’. If such an account is not regularised within fifteen years of opening the account, the entire deposit including deposits made before the default date will accumulate interest at par with the Post Office savings scheme (which is currently fixed at 4%) instead of the 8.1% of the SSY scheme.
No premature closure before five years: As per the new guidelines, you cannot make any premature closures unless the investment has completed a mandatory five-year period. If, however, you still want to go ahead and withdraw your investment before the lock-in period, you will earn an interest rate at par with the post office savings account and not the one linked with SSY scheme.
SSY Scheme changes at a glance
| SSY Regulations | Earlier norms | As per the new regulations |
| Maximum investment tenure | 14 years | 15 years |
| Residential status for eligibility | No clarity earlier | Open only for girl children who are resident Indians |
| E-transfer facility | Not available | Available |
| Premature closure | Was available at any time | Lock-in for first 5 years of investment; Interest rate at par with PO savings scheme if prematurely withdrawn before 5 years |
| Penalty | Rs. 50 along with Rs. 1000 annual contribution | Rs.50 penalty. But interest will be paid at par with P. O. interest rate on deposit if not regularised within 15 years of account opening
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| Interest Calculation | Calculated on the 5th of every month | Will be calculated on the 10th of every month |
| Adopted child | You cannot open an account in the name of your adopted girl child | You can open an account for your adopted girl child |
| 100% Withdrawal | Cannot withdraw 100% till maturity | Can withdraw 50% when the child turns 18 for higher education or for marriage-related expenses. |