Apart from banks, which offer a a host of financial instruments, the post office also offers several savings schemes with different interest rates. The Sukanya Samriddhi Account, one of the savings scheme offered by India Post - which has a network of more than 1.5 lakh post offices across the country - is a deposit scheme for the girl child. Interest rates applicable to small savings schemes such as Sukanya Samriddhi are reviewed every quarter. For the first quarter of financial year 2019-20, the government has left the small savings schemes' interest rates unchanged at existing levels. The onset of a financial year is a good time to start investing in savings schemes to be able to avoid making a hurried decision, say financial experts.
Here's a lowdown of the key things you need to know to set up a post office Sukanya Samriddhi account:
1. Eligibility: The Sukanya Samriddhi account can be opened by a natural or legal guardian in the name of a girl child. A person can open and operate only one account in the name of a girl child and maximum two accounts in the name of two different girl children. The account can be opened up to age of 10 years from the date of birth, according to India Post's website - indiapost.gov.in.
2. Amount: One is allowed to set up a Sukanya Samriddhi account at a minimum investment of Rs. 250 and a maximum of Rs. 1,50,000 a financial year. The subsequent deposits in the account can be made in multiples of Rs. 100. However, there is no limit on the number of deposits either in a month or in a financial year, according to the India Post website.
3. Rate of interest: Investment in the Sukanya Samriddhi scheme fetches interest at the rate of 8.5 per cent per annum, is calculated and compounded on a yearly basis, according to the India Post website.
4. Penalty: If a minimum amount of Rs. 250 is not deposited in a financial year, the account will be discontinued and can be revived with a penalty of Rs. 50 per year along with the minimum amount required for deposit for that year, according to India Post's website.
5. Income Tax Benefit: The deposits made to the Sukanya Samriddhi account, the proceeds and maturity amount are fully exempted from tax under section 80C of the Income Tax Act.