Simplified Sukanya Samriddhi Yojana | Can NRIs Invest?

If you have a daughter then you shouldn’t miss the investment opportunity in Sukanya Samriddhi Yojana (also called as Sukanya Samriddhi Scheme). Either you have a son or a daughter, you have an equal responsibility to give them proper education and fulfill their basic needs. And, you need to have a well planned and safe investment plan to achieve it.

Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana aka SSY is not a new investment scheme by the Indian Government but still, a majority of people don’t know the complete information. Therefore, I thought to share all the details you must know about Sukanya Samriddhi Yojana.

What is Sukanya Samriddhi Yojana?

Sukanya Samriddhi Yojana is a saving scheme designed for the parents of a girl child. It is a government-backed small saving scheme as part of the “Beti Bachao and Beti Padhao Yojana”. SSY offers an attractive return on investment and encourages the parents to built funds for the daughter’s education and marriage expenses.

A majority of the Indian population still earns very less and it is difficult for them to provide their kids with a better education. On the other hand, the education cost in India is touching new high every day especially higher education.

The other expense which scares the middle or low-class people is the marriage expense of their daughter(s). Therefore, Sukanya Samriddhi Scheme emerges as the best investment instrument for the bright future for your daughter.

It gives the flexibility to arrange funds during her higher education and her marriage. Therefore, I recommend every parent out there to open a Sukanya Samriddhi Account as soon as you are gifted with a baby girl.

Key Features of Sukanya Samriddhi Scheme

Following are the key points to remember before investing in Sukanya Samriddhi Yojana;

  • You have to deposit at least INR 250 in a financial year and the maximum period up to which deposits can be made is 15 years from the date of opening of the account.
  • Failing to maintain minimum deposit in a financial year (i.e. INR 250), you will be liable to pay a penalty of INR 50 * (number if financial year defaulted) to reinstate the account.
  • The maximum investment allowed towards an SSY account in a financial year is INR 1,50,000.
  • Maturity of the SSY deposit account is 21 years i.e. you can only withdraw the full amount after the 21 years from the date of opening the account.
  • Sukanya Samriddhi Account can only be opened for girl children who are younger than 10 years. Any girl child older than 10 years old will not be eligible for the SSY account.
  • Only one account can be opened in the name of a girl child and you can have this account only for your two girl child. However, if your second baby is twins then you can apply for three SSY accounts – after providing birth certificates of your daughters issued by the government of India.
  • Interest rates on Sukanya Samridhdhi account are subject to change quarterly based on the government’s decision but usually, it pays more than other investment instruments.
  • Investment in Sukanaya Samriddhi Yojana comes under the 80C income tax act and the maturity balance along with the interest earned are fully exempted from the income tax.

Sukanya Samriddhi Yojana is a government scheme and all the latest updates on this scheme can be found on their portal.

Documents Required To Open A Sukanya Samriddhi Account

Sukanya Samriddhi Account is available for all the Indian Residents and the following documents required to open an SSY account;

  • Birth Certificate of the Girl Child (issued by the government of India)
  • PAN Card of the parent or legal guardian who will deposit the money on behalf of the girl child.
  • Filled Sukanaya Samriddhi Account Opening Form.
  • Address proof of the parent or legal guardian i.e. Passport Copy, Electricity Bill, Driving License, etc.

Maturity Period Of The Sukanaya Samriddhi Account

Sukanya Samriddhi is a long term investment scheme that is designed for the welfare of Indian girls. The long term horizon makes sure, you have the fund for your daughter when it is required the most i.e. during her higher education or marriage.

The maturity of a Sukanya Samriddhi account is 21 years from the date of opening the account.

On account closure, the account holder (daughter) will get all the balance including the tax-free interest earned during the tenure.

Sukanya Samriddhi Account cannot be operational post-marriage of the account holder.

Also, Account holder must produce an affidavit to the effect that she is not less than eighteen years of age as on the date of closing of the account

You will be getting the interest on your balance in SSY account even If you don’t close your account after maturity.

Is Early Withdrawal From The Sukanaya Samridhhi Account Possible?

Sukanya Samriddhi Account comes with very long term (i.e. 21 years) maturity period. Sometimes, it is difficult to wait that long when we see big expenses coming for your daughter before the maturity date i.e. Higher Education and Marriage Expense.

Considering that, the government of Indian has given relaxation on the early withdrawal facility for higher education and marriage.

If your daughter is going for higher education or getting married, you can request for the 50% withdrawal from the Sukanya Samriddhi Account balance provided account holder i.e. your daughter’s age is no less than 18 years.

You may be asked to produce documents confirming that either your daughter is getting married or has got admission in some university for higher education.

Can We Request For Premature Closure Of An SSY Account?

Now, we already know that the maturity period of the Sukanya Samriddhi Account is 21 years and you have to deposit money for 15 years. For many people continuing deposits for 15 years could be a burden or just not possible due to various financial reasons.

Sukanya Samriddhi Scheme allows premature closure of the account in the following scenario:

  • Death Of the account holder: SSY account should be closed in the event of the death of the account holder. Account balance along with interest earned will be paid to the guardian of the account holder. Guardians must produce the death certificate of the account holder to close the SSY account.
  • Unable to deposit due to financial crisis: There could be some bad time when you can’t even manage to pay INR 250 per year into Sukanya Samriddhi Account. You need to produce supporting documents along with premature SSY account closure requests. The government should be satisfied that the operation or continuation of the account is causing undue hardship to the account holder due to medical support in life-threatening disease.

How To Open a Sukanya Samriddhi Account?

SSY account is a government scheme and it could be opened at any of the following places;

  • You can visit your nearest post office and request for the account. You will be asked to produce the required documents along with the filled Sukanaya Samriddhi Account Opening application form.
  • Alternatively, you can reach out to the authorized nationalized banks to open a Sukanya Samriddhi Account for your girl child. At present, most of the banks offering this scheme but I would prefer the best banks like SBI, ICICI, AXIS, HDFC, etc. for their technically advanced banking system.
  • You can start your account by just depositing INR 1000 and thereafter deposit minimum INR 250 per financial year.
  • Sukanaya Samriddhi Account comes with a passbook with baby girl’s date of birth on it and the same needs to be presented at the time of depositing the fund, receiving funds, or at the time of final closure of the account on maturity.

Now, the next question comes

What Are The Mode Of Payment Available?

The mode of the deposit depends on the facilities provided by the post office or banks in which you have opened an SSY account. Following are the options available for you;

  • Cash Payment
  • Cheque Payment
  • via DD i.e. Demand Draft
  • Online Payment is also possible now with banks and post office (using IPPB i.e. India Post Payment Bank)

Want to pay in SIP or recurring deposit?

Yes! this is possible, you need to give standing instruction at your bank’s branch or could be set through Internet Banking for automatic credit to Sukanya Samriddhi Account

Can NRI Invest In Sukanya Samriddhi Yojana?

NO! NRIs cannot invest or open a Sukanya Samriddhi Account. SSY account is only the Indian residents living in India.

What if you opened a Sukanya Samriddhi Account when you were Indian resident but later your resident status changes to NRI?

Well, in this case, you have to reach out to the post office or bank where you have the SSY account and intimate the resident status change.

Once you do that, they will stop interest on your deposits and you won’t be allowed for the further contribution in the SSY account.

But, if you have a daughter who has an Indian passport and lives in India but you are an NRI who lives abroad, you can open an SSY account for her once you are in India. But, the moment her status changed to non-resident, you have to intimate the post office or the banks where you opened the SSY account.

To summarize;

  • Only Indian Residents living in India are eligible for Sukanya Samriddhi Account
  • If you opened an SSY account when you were in India but your resident status change to NRI then you should intimate the post office or bank within a month of changing the resident status.
  • You cannot contribute to already opened SSY account once you become an NRI, however you can continue with the account once you returned from abroad and you are an Indian resident now.
  • If your daughter is an Indian and lives in India but you are an NRI living abroad, you can still have a Sukanya Samriddhi Account for her.
  • No interest will be credited to the SSY account once your daughter also becomes an NRI but account could be held till maturity.
  • However, if you have a plan to settle abroad, then you must intimate the post office or bank where you have a Sukanaya Samriddhi Yojana account and request for SSY premature closure.

In a nutshell, Sukanya Samriddhi Yojana is not for the NRIs but NRIs shouldn’t feel sorry about it because there are other good investment opportunities available for them in India. Read Best Investment Options For NRIs

Can We Deposit In Sukanya Samridhhi Account Online?

Yes! We can deposit in Sukanya Samriddhi Account easily.

You can add your Sukanya Samriddhi Account in the payee/beneficiary list and initiate the payment in the same way you do for other online transactions. This facility is available with almost all the nationalized Indian banks however, checking the available balance online is still an issue.

What if you have opened a Sukanya Samriddhi Yojana Account in the Indian post office?

Fortunately, we have the online payment/deposit option available with the Indian Post Office as well. You can download their IPPB (Indian Post Payment Bank) Android App and iOS App and register with your account details. Apart from the online payment facility towards your PPF and Sukanya Samriddhi Account, you can lot more with this IPPB app.

Pic credit- ippbonline.com

Online Deposit in Sukanya Samriddhi Account is very easy using IPPB mobile app. All you need to do is;

  1. Locate Sukanya Samriddhi Account on the menu
  2. Add your SSY Account number
  3. Enter the amount you wish to deposit
  4. Confirm the transaction

You should have the sufficient balance in your Indian Post Payment Bank Account before making the deposit. You can transfer funds from your existing bank to the IPPB account if you don’t have enough balance to make the deposit.

That’s it! You will get a successful transaction message. You can also check your total contribution towards the Sukanaya Samriddhi account in the current financial year.

What Are The Benefits Of Sukanaya Samriddhi Yojana?

If you have reached this part of this post then you already know many good things about the Sukanya Samriddhi Scheme however, the following are key benefits of investing in Sukanya Samriddhi Yojana.

  • Flexibility on Investment: With an SSY account, you can deposit as low as INR 250 and maximum up to INR 1,50,000 in a financial year. This makes this scheme perfect for all the people.
  • Attractive Interest Rate: Sukanya Samriddhi Account offers more interest rates than any other fixed deposit scheme like PPF, NPS, etc.
  • Benefit Of Compounding: SSY is a long term investment and adds the benefit of compounding on your investment.
  • Investment Security: Sukanya Samriddhi Account is fully backed by the Government Of India therefore your investment is 100% risk-free.
  • Tax Benefit under 80C: SSY deposits come under the tax deduction benefits under 80C up to 1.5 Lakh in a year.
  • Exempt, Exempt & Exempt: Your investment in Sukanaya Samridhhi Account along with the interest earned are fully expected from the income tax.
  • Deposit Only 15 Years: Even though the maturity period of an SSY account, you need to deposit only 15 years and you can enjoy interest with the benefit of compounding for the remaining 6 years.

Apart from these benefits, you also get financial support in your daughter’s higher education and marriage. These are the times when most of the parents either take loans and carry the financial load for a long time. Sukanaya Samriddhi Account helps you in depositing the fund systematic manner with discipline and allows withdrawal funds when it is needed.

The fund has its worth when it is available when you need the most.

Following is the interest rates on Sukanya Samriddhi Account (credit Wikipedia)

Interest rates on Sukanya Samriddhi Account.

What Are The Disadvantages Of Sukanaya Samriddhi Account?

Till now, we are discussing only the good stuff about the SSY account. Does it don’t have any negative points? Is there any disadvantage of Opening a Sukanya Samriddhi Account? Let’s find out;

  • Long Lock-In Period – Tenure of deposit in Sukanaya Samriddhi Yojana is 21 years from the date of opening the account. It could be one of the points to consider before investing or opening an SSY account.
  • Maximum Two Accounts – You can have one account for a girl child and you can have Sukanya Samriddhi Account for your two daughters only. However, you get a triplet or second delivery is twins then you are allowed to open three accounts. I don’t consider this as a disadvantage but it could be for some people. Considering the increasing population, one should have their responsibility by having a maximum of to kids.
  • Premature Withdrawal – Premature withdrawal is not easy in the SSY account. You can request for premature withdrawal unless your daughter is 18 years old and need money for her higher education or marriage. Therefore, investment towards the Sukanaya Samriddhi Account should be decided based on your investment goals.
  • Online Account Opening Facility – Online facility to open Sukanaya Samriddhi Yojana Account is not available at this moment which is one the setback of this scheme. However, India is witnessing the digitization and we can expect to see some improvement in this area as well soon.
  • No Fixed Interest Rates – The interest rates on your investment in Sukanya Samridhhi Account are not fixed and the government can revise it quarterly. Still, this scheme offers the best interest rates among other long term investment schemes like PPF, NPS, etc.

These might be the serious disadvantages of the Sukanya Samriddhi Account but this scheme is best and surely works for the reason it has been introduced i.e. empowering the girl child and securing their future.

Why Should You Open An Sukanaya Samriddhi Yojana Account?

Sukanya Samriddhi Account (Girl Child Prosperity Account) is a government-backed account and launched only for the welfare of Indian girl children. This is a small savings scheme and best fit for the low and medium class people who faces difficult times when it comes to arranging fund for their daughter’s education and marriage.

Sukanya Samriddhi Account gives you the flexibility of deposit and you can deposit as per the availability of funds (min- INR 250 and Maximum INR 1.5 Lakh). Also, it is difficult for most of us to maintain the discipline while investing or saving money, since SSY account has deposit tenure 21 years, it helps in following saving or investing discipline.

Marriage expenses are touching new high every day and every parents want to do their best in their child’s marriage. There is no limit to marriage expenses when it is your daughter’s marriage. People take loans for their daughter’s marriage that adds financial burden for a long time for parents. Sukanaya Samriddhi Yojana helps in minimize the fund burden during your daughter’s marriage.

If you are a salaried person working in a government or private firm, you must have a Sukanya Samriddhi Account. Your small contributing to this scheme will give you big relief when you need funds for your daughter’s higher education or marriage.

The investment towards Sukanya Samriddhi Account eligible for tax exemption benefit under 80C and maturity amount is also fully tax-free. Systematically invest in Sukanaya Samriddhi Account required for your daughter’s bright future.

Conclusion

  • Sukanya Samriddhi Account is a government-backed small savings account designed for the welfare of the Indian Girl Child.
  • A maximum of 1 account per girl child could be opened and only two girl children of parents eligible for this account. However, in the case of twins to triplets, you can have three accounts.
  • Only Indian residents can avail the benefits of Sukanaya Samriddhi Yojana and NRIs cannot open or operate the same.
  • This account can be opened until your girl child is younger than 10 years.
  • The maturity period of the Sukanya Samriddhi Yojana is 21 years however, you have to deposit only 15 years.
  • Investment in Sukanya Samriddhi Account eligible under tax benefits under 80c up to INR 1.5 lakh per annum.
  • Investment along with interest earned in your SSY account if fully exempted from the income tax and it comes under tax benefit – EEE
  • 50% Partial withdrawal possible once your daughter turns 18 and need fund either for higher studies or marriage.
  • The minimum deposit is INR 250 and the Maximum is INR 1.5 Lakh in a financial year. Failing to maintain the minimum balance will attract INR 50 penalty for each defaulted years.

Also Read.

I hope, you have all the details on Sukanya Samriddhi Yojana now and you can decide whether to go for it for your daughter or not? I strongly recommend Sukanya Samriddhi Scheme for all the parents if they have a girl child.

Let me know if you have any questions in the comments on Sukanya Samriddhi Yojana, I will try to address them.

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