Hello. Today we will talk about one of the flagship govt savings schemes that the Modi govt had launched back in 2015.
This was the 1st Indian savings scheme that was targeted toward female children and is an integral part of the Beti Bachao Beti Padhao campaign.
In this video, we will discuss: Overview of the Sukanya Samriddhi Yojana (SSY), Basic Features, Withdrawal options, and conditions.
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Let's see the Overview first.
The Sukanya Samriddhi Yojana was launched by Prime Minister Narendra Modi on 22 January 2015 in Panipat, Haryana.
Its main objective was to incentivize parents to have dedicated savings for female children, for their education, and for weddings in the future.
It was one of the flagship programs launched under the Beti Bachao Beti Padhao campaign.
This savings scheme account can be opened anytime between the birth of the girl child to the time the child turns 10 years old.
Only 1 account is permitted per child and each parent can open only 2 accounts at max at a time.
Now let's see the Basic Features.
The way that this savings scheme works is very similar to the Public Provident Fund.
The account provides the same income tax benefits as PPF with a deduction in the taxable income of up to Rs 1.5 Lac under section 80C.
It also provides a fixed rate of return like PPF.
The rate of return was at 9.1% at the start and it was at 7.6% in FY22.
SSY accounts can be opened in post offices around the country and in any bank that provides savings accounts.
The scheme has a total of 2.86 Cr registered subscribers with a total amount saved of more than Rs 1.27 Lac Cr as of 28th Feb 2022.
Like PPF, the principal and interest accumulated in SSY accounts are fully tax-free.
The minimum yearly amount to be invested for this scheme is Rs 500 while the max limit is Rs 1.5 Lacs similar to PPF.
Like PPF, the interest accrual is compounded annually at the given interest rate for that year.
If the account holder is less than 10 years old then the account is handled by the parent or guardian of the holder.
Once the holder becomes 18 years old, the account must be operated by the account holder.
The account can be transferred anywhere in India without any fees or for Rs 100 if residence proof is not provided.
All account holders are issued a passbook to track the transactions and act as proof of account for the holder.
Now let's see the Withdrawal options & conditions.
SSY also allows for partial withdrawal only in 2 cases which are education and marriage.
A maximum of 50% of the account can be withdrawn in a lump sum or 4 installments when withdrawing for education.
This type of withdrawal is allowed only when the girl child has either turned 18 or has completed her education of 10th standard.
Documentary proof of education fees is mandatory when applying for premature withdrawal for education purposes.
In case the girl child is above 18 and is getting married, the entire amount can be withdrawn with an application
This application can be made in the period between 1 month before the marriage and 3 months after the marriage.
The age proof and marriage proof documents are necessary when applying for withdrawal.
The account will be automatically closed in case the account holder passes away or becomes a non-citizen or non-resident.
The parent or guardian can withdraw the amount after submitting the necessary documents and proofs.
There is also an option for the account holder to withdraw the funds if the parent or legal guardian has passed away.
The account holder can also choose to retain the account to accumulate interest until she turns 21
even if deposits may not continue due to the parent or guardian passing away.
Lastly, the account holder can apply for full withdrawal after she turns 21.
The account holder can apply for withdrawal by submitting an application with the post office or the bank where their account is operating,
along with the required documents of identity proof, citizenship documents, and residence proof.
The interest accumulation will only continue till the account turns 21 and will stop any interest addition after this date.
Now let’s compare SSY with Public Provident Fund (PPF) and debt mutual funds.
Sukanya Samriddhi Yojana is Applicable only to a girl child.
Debt Mutual Fund is Applicable to anyone.
Public Provident Fund is Applicable to any taxpayer.
Sukanya Samriddhi Yojana gave Fixed Return Rate of 7.6% (in FY22)
Debt Mutual Fund gave Returns ranging from 5%-10%
Public Provident Fund gave a Fixed Return rate of 7.1% currently
Sukanya Samriddhi Yojana- Tax-Free with tax deduction allowance
Debt Mutual Fund- Incurs Capital Gains Tax & has no tax deduction allowance
Public Provident Fund- Tax-Free with tax deduction allowance
Sukanya Samriddhi Yojana Cannot be extended after the girl reaches 21
Debt Mutual Fund Can be reinvested at any time
Public Provident Fund Can be extended for 5-year blocks after initial 15 years
Sukanya Samriddhi Yojana's Yearly limit of Rs 1.5 Lacs
Public Provident Fund's Yearly limit of Rs 1.5 Lacs
Debt Mutual Fund has No limit
Thus, we come to the end of this video.
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