Long term schemes can sometimes get difficult to commit to. There may be instances where one fails to pay the minimum required amount to keep an account active. But there are ways to revive or close these long term schemes like Sukanya Samriddhi Yojana that fetches high returns.
This scheme was launched in 2015 under the Beti Bachao Beti Padhao program to encourage education for a girl child.
Features of Sukanya Samriddhi Yojana
- The account can be opened for a girl child below 10 years of age.
- Only one account can be opened in the name of a girl child and only two accounts can be opened per family for two girls.
- It fetches the highest interest rate a government-backed scheme with guaranteed returns can give you at 8.5 percent (January-March 2019).
- The account can be opened at any authorized bank or post office in India and the account can be transferred to a different branch within the country at any time.
- It comes with the EEE tax status, which means income tax is exempt on deposits made, interest earned and maturity amount.
- Tax exemption can be claimed under section 80C of the income tax act.
- Deposits towards the scheme can be made online.
- The girl child will receive access to the SSY account when she turns 10 years old. The parents, as well as the child, can make contributions to the fund thereafter.
- Deposits can be and will be needed to be made for 15 years to keep the account active.
- The account will run and keep earning interest for 21 years irrespective of the girl's age. It will stop earning interest on completion of 21 years, if not closed.
- The interest rates on the scheme are reviewed and revised every quarter by the government just like other small savings schemes.
- It is best to make the deposit before the tenth of a given month to earn interest for the month.
- A minimum deposit of Rs 250 a year is required to keep the account active.
- The maximum deposit is limited to Rs 1.5 lakh. If any amount beyond the limit is deposited to the account, it shall not earn interest.
- The interest is compounded at the end of the financial year and credited to the account.
What happens when you do not make minimum contribution towards the SSY account?
The account will be treated as 'discontinued' on failure to make the minimum contribution as per regulations. Contributions have to be made towards the scheme for a minimum of 15 years to keep it active and it will continue earning interest for 21 years (maturity period) as mentioned before.
To revive the Sukanya Samriddhi Yojana account, visit the post office or bank branch that you hold the account with and ask for a revival request form.
Apart from submitting the request form, you will have to pay a minimum of Rs 1,000 per year for non-payment and a penalty of Rs 50 for each year of inactivity.
If you wish to close the account prematurely instead, the following rules apply:
- On the death of the beneficiary account holder (girl child), the account shall be closed from the date of death and on producing the death certificate, the balance at the credit of the account and interest thereof till the date of death shall be paid to the Guardian.
- If the girl child becomes a non-citizen or non-resident of India after opening of the account, it should be informed to the bank or post office by the guardian or account holder within a month of change of such status. Such account shall not earn any interest from the date of the change of status of the account holder's citizenship or residence and shall be deemed to be closed prematurely on the date of such change of residence status even if the intimation is given late.
- From the date of such deemed closure, the account shall be treated as irregular and not earn any interest. The balance at the credit of such account will be returned, along with interest due for such deposit to the account holder or guardian.
- Where the post office is satisfied that the continuation of the account is causing undue hardship to the account holder, it may, after complete documentation, by order and for reasons to be recorded in writing, allow premature closure of the account but only in cases of extreme compassionate grounds like medical support in life-threatening diseases of the girl child or death of the Guardian but not before 5 years of opening the SSY account.
- lf an application is made for premature closure for the reasons other than above, the premature closure may be permitted on condition that the account shall be treated like a savings account from date of opening and whole deposit would be eligible only for interest rate prescribed for Post Office Savings Bank account (currently earning 4 percent per annum). Excess interest credited in such cases will be recovered from the balance in the account.