Bhai Dooj 2018: Why You Should Gift Your Sister A Sukanya Samriddhi Account

Amid the ongoing fervor of Diwali and Bhai Dooj, if you're planning a gift for your daughter or younger sister, a Sukanya Samriddhi account could be one of the best options, say experts. The Sukanya Samriddhi Yojana, launched in January 2015, is a deposit scheme for the girl child. The government last month increased interest rates on Sukanya Samriddhi Scheme to 8.5 per cent per annum from 8.1 per cent. Earlier this year in July, the government had also reduced the annual minimum deposit on Sukanya Samriddhi accounts to Rs. 250 from Rs. 1,000. The accounts can be opened in leading banks and post offices across the country.

Here's everything you should know about the Sukanya Samriddhi Scheme:

1. Number of Accounts: The Sukanya Samriddhi account can be opened by a natural or legal guardian in the name of a girl child. One can open and operate only one account in the name of a girl child. The natural or legal guardian is allowed to open the account for a maximum of two girl children only. In case of twin girls as second birth, or if the first birth itself results in the birth of three girl children, three accounts can be opened in the name of three girl children. 

2. Age & Tenure: The period during which the Sukanya Samriddhi account can be opened is from the birth of the girl child until the age of 10 years.

Deposits can be made up to 14 years from the date of opening of the Sukanya Samriddhi scheme. After this period the account will only earn interest as per the applicable rates.

The account will be valid for 21 years from the date of opening, after which it will mature. However, the account will also automatically close if the girl child gets married before the completion of the tenure of 21 years.

3. Amount: One needs to deposit a minimum of Rs. 250 and a maximum of Rs. 1,50,000 in a financial year. The subsequent deposits in the account can be made in multiples of Rs. 100. Deposits can be made in lump-sum and there is no limit on the number of deposits either in a month or in a financial year.

If minimum Rs 250 is not deposited in a financial year, the Sukanya Samriddhi 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.

4. Premature Withdrawal: Withdrawing money before the completion of the maturity period of 21 years can only be made by the girl child in whose name the account has been opened after she attains the age of 18 years. This withdrawal will also be limited to 50 per cent of the balance standing at the end of the preceding financial year. Also, in order to make a withdrawal, the account should have a deposit of at least 14 years or more.

5. 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.