In this article we have covered some frequently asked questions regarding sukanya samriddhi yojana.
Where can the account be opened?
The account can be opened at any post office in India and all public sector banks.
Who can invest?
Parents or legal guardians of a girl child can open the account in the name of the girl anytime after her birth till she attains an age of 10 years. For the first year there is an exemption provided in the age condition. The scheme was notified on 02/12/2014. All girls who have turned ten, one year before notification of the scheme are also eligible to get an account under this scheme. That means the account can also be opened for a girl who has attained the age of 10 years between 02/12/2013 to 02/12/2014.
Only one Sukanya samriddhi yojana account can be opened for a girl child. Parents/guardians can open accounts for up to two girls. In case there are twin girls born as the second birth or triplets-all girls born as the first birth, parents/guardians will be allowed to open three accounts upon presentation of the relevant documentary proof.
How much can be invested?
Account needs to be opened with minimum Rs.1000. Minimum investment amount is Rs.1000 per year and the maximum allowed is Rs.150000 per year. These amounts can be deposited any number of times in a year.
What is the duration of the scheme?
Investments can be made till completion of 14 years from the date of opening of the account.
What is the rate of return?
The rate of return will be announced by the government every year. In the current year the rate is 8.6%. The interest would be compounded yearly. Apart from the rate, the yearly compounding nature will help create a good corpus upon maturity
There is also an option of monthly interest payout. Though this option is provided, it will be better to avoid it, to be able to have a sizeable corpus for your daughter’s higher education or marriage.
Account operation
The account has to be operated by the parent/legal guardian of the girl. When the girl becomes 10 years old, she herself can operate the account.
The details of the transactions in the account will be updated in a passbook given by the post office or the bank where the account is maintained.
What is the level of safety?
The level of safety is highest in this product as it is scheme from Government of India.
Taxation
This is a tax free scheme. When you invest the amount into this account, you get a benefit under Sec 80C. The interest received is tax free and upon maturity you will be able to withdraw the amount tax free. So it is under the EEE taxation level, same as that of PPF account.
When the scheme was launched the taxation was not clear. The tax exempt status has been announced in the budget of 28 February, 2015. So this is yet in a proposal stage and will become the law once the finance bill is passed in both houses of the Parliament.