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Are you aware of these rules changes of Sukanya Samriddhi Scheme

Sukanya Samriddhi Yojana is one of the most popular long-term investment instruments. The scheme meant for girl children has undergone some changes recently. In a notification dated December 12, 2019, the finance ministry repealed the
existing scheme rules and replaced them with some new ones. 

The Sukanya Samriddhi account is designed to provide a bright future for the girl child. It offers a high-interest rate of 8.4% and tax benefits under 80C of the Income Tax Act.

SSY Eligibility:

The account can be opened by the natural or legal guardian for a girl child of age below 10 years.
A depositor can open and operate only one account in the name of a girl child under the scheme rules.
Natural or legal guardian of a girl child are allowed to open the account for two girl children only.
SSY features:
  • Attractive interest rate of 8.4%, that is fully exempt from tax under section 80C.
  • Minimum Rs 1,000 can be invested in one financial year
  • Maximum investment of Rs 1,50,000 can be made in one financial year
  • If the minimum amount of Rs 1,000 is not deposited in any financial year, a penalty of Rs 50 will be charged
  • Deposits in an account can be made till completion of 14 years, from the date of opening of the account
  • The account shall mature on completion of 21 years from the date of opening of the account, provided that where the marriage of the account holder takes place before completion of such period of 21 years, the operation of the account shall not be permitted beyond the date of her marriage.

Withdrawal Facility:

To meet the financial requirements of the account holder for the purpose of higher education and marriage, an account holder can avail partial withdrawal facility after attaining 18 years of age. If the beneficiary is married before the maturity of account, the account has to be closed.

Here are five changes that have been made to the Sukanya Samriddhi Yojana Scheme:

1. Higher interest rate for default accounts: If a subscriber does not deposit even the minimum amount (Rs 250) in a financial year in the SSY account, it will be considered as an account in default. According to the new rules, such 'default accounts' will earn the interest rate applicable to the scheme, till the maturity date of the account, if not regularised till then.

2. Premature closure of account: According to the new scheme rules, the premature closure of a Sukanya Samriddhi account is allowed in case of death of the girl child or on compassionate grounds which would include situations such as medical treatment of the account holder for life-threatening diseases or death of the guardian. Old rules allowed the premature closure of account due to change in residency status of the girl child as well. However, new rules have not specified whether the account will be allowed to be prematurely closed or have to be continued till maturity.

3. Interest on deposit: Deposits in the account shall earn interest at the rate of 8.4 per cent per annum. The interest shall be calculated for the calendar month on the lowest balance in the account between the close of the fifth day and the end of the month. The interest shall be credited to the account at the end of each financial year. Interest shall be credited at the end of the financial year irrespective of the change of the account office due to transfer of the account during the financial year. 

At the current rate of interest, if Rs 1.5 lakh per year is deposited in the account till the completion of 15 years from the date of opening, the total value of the money in the account will be around Rs 45,44,820 (approx Rs 45 lakh) in 15 years. However, as the account matures after completion of 21 years from the date of opening the account, money in the account will continue to earn interest and grow to approximately Rs 73 lakh. This means that account holder may get Rs 73 lakh on maturity.

4. Operation of account: According to the new rules, the account cannot be operated by the girl child till she attains the age of 18 years as against 10 years as per old rules. The account will be operated by the guardian till the account holder (i.e., the girl child) attains the age of 18 years. Once she attains the age of 18 years, necessary documents are required to be submitted to the bank/post office where the account is being held.

5. Opening of accounts for more than two girl children: An account under this scheme may be opened for a maximum of two girl children in one family provided that more than two accounts may be opened in a family if such children are born in the first or in the second-order of birth or in both, on submission of an affidavit by the guardian supported with birth certificates of the twins/triplets regarding the birth of such multiple girl children in the first two orders of birth in a family.

This provision shall not apply to girl child of the second order of birth if the first order of birth in the family results in two or more surviving girl children. 

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