The Sukanya Samriddhi scheme will earn a higher interest rate of 9.2 per cent interest (yearly compounded) in the fiscal year 2015-16 (April to March). In FY15, the Sukanya Samriddhi scheme earned interest of 9.1 per cent. Sukanya Samriddhi Scheme is a small savings scheme launched in January this year and is aimed at encouraging savings for a girl child's education and marriage.
Here is a 10-Point Cheat-Sheet
Taxation: A contribution of up to Rs 1.5 lakh under Sukanya Samriddhi scheme qualifies for income tax deduction under Section 80C of Income Tax Act. Also, interest income and maturity amount would be tax-free, making Sukanya Samriddhi scheme similar to public provident fund (PPF) in terms of tax aspects.
Interest Rate: For 2015-16, the government would be paying 9.2 per cent interest on Sukanya Samriddhi scheme, higher than the 8.7 per cent announced for PPF accounts. The government will every year declare the interest rate of small savings schemes like Sukanya Samriddhi scheme and PPF. In 2014-15, Sukanya Samriddhi scheme earned 9.1 per cent as compared to 8.7 per cent for PPF.
How It Compares With PPF: Public provident fund (PPF) scores over Sukanya Samriddhi scheme in terms of flexibility: withdrawal and loan facility. In PPF, partial withdrawal is permissible every year from the seventh financial year of opening the account. In case of Sukanya Samriddhi account, up to 50 per cent of the accumulated amount can be withdrawn only after the account holder turns 18 while full withdrawal is possible after she turns 21.
A loan facility is available from the third financial year of opening the PPF account. In Sukanya Samriddhi account, there is no such facility.
What Experts Say: Suresh Sadagopan, the founder of Ladder 7 Financial Advisories, says Sukanya Samriddhi scheme is a good investment option to save for a girl child's future. But investors should keep in mind that Sukanya Samriddhi is a long-term scheme where partial withdrawal is possible only after the girl child turns 18, he adds.
Opening of Account: A Sukanya Samriddhi account can be opened by the guardian in the name of a girl child till she attains the age of ten years. However, this year a one-year grace period has been given. Under this, an account for a girl child can be opened who is born between December 2, 2003, and December 1, 2004. This relaxation on account opening is applicable only is till December 1, 2015.
Operation of Account: The account will be operated by the guardian of a girl child till the girl child, in whose name the account has been opened, attains the age of 10 years. On attaining age of 10 years, the girl child may herself operate the account.
Deposits: The account may be opened with an initial deposit of Rs 1,000 and thereafter any amount in multiple of Rs 100 can be deposited. The minimum deposit for a financial year is Rs 1,000 and maximum Rs 1.5 lakh. There is no limit on number of deposits either in a month or in a financial year.
Maturity: The account can be closed after the girl child in whose name the account was opened completes the age of 21. If account is not closed after maturity, the balance will continue to earn interest as specified for the scheme from time to time.
Partial Withdrawal: Up to 50 per cent of the accumulated amount can be withdrawn after the account holder turns 18.
Transferability and Penalty: The account may be transferred anywhere in India. An account where minimum amount has not been deposited in a particular year will attract a fine of Rs 50 per year.