Sukanya Samriddhi Account in 10 points

1. Sukanya Samriddhi Account (SSA) scheme was started in 2014 by the government under the mission of "Beti Badao, Beti Bachao". This scheme can be availed from public sector banks, some private banks (ICICI, AXIS, IDBI, HDFC) and Post Office Savings Account. The goal of this scheme is to have savings account for girl child and save money for her bright future. Government gives a higher interest rate on this scheme.

2. Eligibility : Account should be opened before the girl child attains the age of 10 years. Only one account per girl child is allowed. And a family can have accounts maximum for two girl child. Twins and Triplets are accepted exceptions.

3. Account can be opened with minimum deposits of Rs. 250 and every financial year Rs. 250 is mandatory to be added to the account. One can deposit a maximum sum of Rs 1.5 lakh in 1 financial year.

4. One can deposit money for 15 years max from the date of opening account. Deposited money and interests can be claimed under section 80C for tax deductions. The early you start, the better returns you get.

5. Account will be matured once the girl is married or when she attains the age of 21 whichever is earlier. An amount of 50% can be withdrawn when girl attains 18 years of age for educational or emergency purpose.

6. This scheme has a variable interest rate i.e. it will change every quarter as per the direction of government. Generally, the interest rates are very attractive and are in range of ~7.5-9%. This is a low risk, guaranteed return scheme.

7. The money invested will be locked-in for longer period of time, hence one should invest only the sum of money which he/she will not require as emergency. Also, if one needs to close the SSA account he can do that after 5 years with strict guidelines from RBI or in-case of death of the guardian/parent/girl child.

8. Documents : Birth certificate of child, Address Proof of Parent (Aadhar, PAN, passport, driving license), Identity proof of Parent (Aadhar, PAN, passport), KYC form, SSA form.

9. Example : Rahul creates SSA account for his daughter when she was 3 years old. For next 15 years he pays Rs. 10,000 monthly (1.2 lakh) for her daughter's future. (1.2 * 15 = 18 lakhs). Expecting an average of 8.4% interest rate, his invested income will become ~36 lakhs. He can withdraw 50% for her education needs (18 lakhs) and remaining 50% when the scheme matures at the age of 21. If you see, her education expenses were covered freely in the interest earned by the scheme.

10. Opinion : The interest rates are fixed by RBI and will not change if you have account with any bank or Post Office. It is wise to choose a bank with trustworthiness and good service. If you have regular transactions with Post Office, then one can prefer it as well. Expecting a good service from post office can turn into nightmare as well.

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