Jun 222017
 

Comparison between Sukanya Samriddhi Account Yojana vs LIC. Both the Sukanya Samriddhi Account Yojana and the Life Insurance Corporation of India has given then the people of the country options to safeguard the future of themselves and their loved ones. Though they are meant for the same outcome, the SSA and the LIC are very different from each other. The following table will assist you in getting a clear idea about the differences between the two kinds of investment schemes:

Comparison between Sukanya Samriddhi Account vs LIC

Type Sukanya Samriddhi Yojana Life Insurance Corporation of India
Type of Investment If you are looking for a small investment scheme that will provide you with a good interest rate then SSY is the best option. If you are looking for a life cover that will secure the future and also give benefits in the present then LIC has a number of options.
Tenure of maturity The total time that is required for the SS scheme to mature is 21 years. The time of maturity, of the LIC scheme will depend on the policy that the customer has selected.
Life coverage If the depositor dies, the girl in whose name the account has been opened will not get a life coverage benefits. The main reason for purchasing the LIC policy is that after the demise of the depositor, the family will get the life coverage benefits
Account holder The SS account can only be opened by the parents of the legal guardian. The account can only be opened for a female child. Anyone can opt to purchase a LIC policy. The customer will be able to purchase the policy for both a girl and a boy offspring.
Facility of nominations The account holder is the only person for whom the account can be opened. There is no facility of nominating anyone else When purchasing a LIC policy, the client will be able to nominate two people who will get the money after the demise of the actual client.
Rate of interest If you are looking for a high interest rate then opening an SSA for the female child is the best option. The rate of interest that LIC offers will differ according to the terms of the policy that the person has chosen.
Fixed rate of interest The interest rate that the SSY is offering will depend on the economic market. It is not fixed. Though the rates will differ according to the policy terms and also the market, once you have taken the policy, the rate will remain the same till the maturity date.
Pre-mature withdrawal facility Once the female child has attained the 18 years, she will be able to withdraw only 50% of the total amount that has been accumulated in the account. Only after the completion of 3 years will the client he able to surrender the LICF policy.
Return on the investment In case of the SSA, the account holder will be able to acquire a good return on the total investment that has been made. When compared to the SSA, the return that a LIC policy holder will get on his/her investment is not very impressive.
Tax benefits The SSA account will get tax benefits under the Section 80C of IT and it also falls under EEE tax exemption. The amount invested in the LIC policy will also get tax benefits as per the rules of Section 80 C but will not be counted under the EEE slab.

Once you have acquired knowledge about the differences in the features of both these investment schemes, you will be in a better position to choose the right one for securing the future of your children.

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Jun 222017
 

Educational withdrawal condition in Sukanya Samriddhi Account

Educational withdrawal condition for in Sukanya Samriddhi Account. The Sukanya Samriddhi Yojana is one of the schemes that was launched and implemented by the Modi government for ensuring the safe economic future of the female children of the nation. Under this scheme, the parents will be able to save money for their girls. When the female child will attain the legal age, the withdrawal of the money is possible.

The government was of the opinion that the money will not only secure the future of the female child but will also provide the cash when the account holder is going to be married. But this is not the only reason why the importance of this scheme is increasing among the children. The money will also assist the female children in pursuing their dreams of attaining higher education.

Conditions of withdrawing the money for educational purpose from Sukanya Samriddhi Account

According to the guidelines of the scheme, the account holder will be able to withdraw the money for meeting the cost of the education. You can also read Withdrawal or Premature Closure Rules for SSA. But for this, the account holder will have to meet certain criteria.

  1. Age of the account holder

As per the conditions, highlighted in the scheme draft, the account holder will only be able to withdraw money from the SSA, for meeting educational requirements, once they have attained the legal age of 18 years. Below that, the withdrawal facility will not be possible. But if the account has not been operated for 14 years when the child attains the age of 18 years, the withdrawal will not be permitted. You can read full details about Sukanya Samriddhi Yojana Age Limit here. 

  1. Amount that can be withdrawn

The rules also point out that on attaining 18 years, the account holder will only be able to withdraw about 50% of the total money that has been accumulated in the respective account. The 50% will have to be spent on meeting the higher education costs.

Thus, if you want to ensure that the girl gets the facility of withdrawing the money and meeting the requirements of higher education costs, you will have to open the Sukanya Samriddhi Account as soon as possible.

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Jun 162017
 

Sukanya Samriddhi Yojana or SSA vs Child Mutual Fund

By now, most of the parents or legal guardians of the female children are aware of the importance of opening an account under the Sukanya Samriddhi Yojana. It is a new scheme that has been launched by the government of the nation. But there are many who still have some reservations about this small investment scheme. For them, investing in a time tested formula is better than taking a risk with the new programs. One such time tested investment scheme happens to be the Child Mutual Fund or the CMFs. Both the plans have their merits and demerits. Knowing about both is very important if you want to secure the future of your child. In this article, you will acquire an in-depth knowledge about the two schemes.

Below the Some Comparison between Sukanya Samriddhi Yojana or SSA vs Child Mutual Fund

  1. Main account holder – By now, all citizens of the country must be aware of the fact that the Sukanya Samriddhi Account can be opened only for a female child. In comparison to this, the parents or the guardians can invest money in the Child Mutual Funds both for boys and girls.
  2. Number of accounts permitted per child – As per the guidelines, any parent or legal guardian will be able to activate only one account for one female child. There are no restrictions to the number of accounts that can be opened for children under the CMFs.
  3. Age limit for inaugural the account – According to the rules of SSY, the parents or the legal guardians will be able to activate the account under this plan as soon as the female child is born. As the Child Mutual Funds are monitored by respective companies, the age limit will vary according to their in-house rules.
  4. Maximum age of activating the account – The parents of the female child will be allowed to activate the SSA as long as the child has not attained the age of 10 years. As for the CMFs, the maximum age till which the account can be opened is till 18 years.
  5. Required documents – Proper documents supporting the claims of identity and address are required for investing under both the schemes. But for investing under the SSY, the parents will also have to produce the certificate of birth, belonging to the female child, which is not required for CMFs. On the other hand, the parents will have to produce the PAN card in case of the CMFs only.
  6. Yearly monetary depositions – This is one feature that is common in both the cases. The parents or the legal guardians are allowed to make as many monetary depositions in the accounts, during the entire year.
  7. Rate of interest – In both the schemes, the interest rates, offered to the investors will depend on the current financial market situations. The rate of interests will fluctuate and they are not fixed in any way. For instance, the rate for SSA for 2014-2015 was 9.1% while it was increased to 9.2% during 2015-2016. 
  8. Tax benefits – As per the draft of the SSA, the total amount of money that the person will be saving in the account as well as the interest earned will not be subjected to any taxation under the Section 80C. As for the CMFs, whether you will get any concession from tax or not will be direct dependent on the scheme chosen.
  9. Facility of partial cash withdrawal – Under the rules laid down for SSA, the government has provided the facility of withdrawing only 50% of the money accumulated in the account. This can only be done once the female child has acquired the age of 18. As for the CMFs, the withdrawal facility is mostly permitted after the completion of the third year. But some companies may also have other withdrawal rules, as per the policy of the corporation.
  10. Places of opening the account – The SSA can be opened and operated from 28 banks, listed by the government and also from the post offices. As for the CMFs, the person will have to approach the company and then invest accordingly (Tata Mutual Fund, SBI Kotak, and others)
  11. Risk factors – The advantage of the SSA over the CMFs is that there are no risks involved with the former. The money you invest in SSA will be safe but this cannot be said about the CMFs as they have a direct connection with the progress of the money market.
  12. Nomination facility – As the SSA can be opened in the name of a particular female offspring, the facility of nominating someone else is not there. You will get the benefit of nominating a second person in case of the CMFs.
  13. Presence of insurance cover – According to the rules of the SSY, the account holder will not get any additional insurance policy. On the other hand, this facility is often provided by the companies providing the CMFs. The facilities differ according to the chosen mutual plan.
  14. Mode of payment – For depositing the money in both types of scheme, the depositors may make use of Cash, Cheque, and Demand Draft. In addition to these, one can also make use of the ECS, Credit Cards or Debit Cards for making the payment in the CMFs.
  15. Facilities for NRIs – Till date, the facility of depositing money in the SSA is only available for the citizens who live in India. The NRIs cannot take part SSA. You can also read Sukanya Samriddhi Account for Non Resident Indians (NRIs). On the other hand, depositing money in the CMFs by NRIs is permitted only if the child is also not a resident of India.
  16. Maturity – As the rule goes, the account holder will be able to withdraw the entire amount from the SSA once the maturity period of 21 years is completed. If you have invested in the CMFs, the withdrawal is possible as per the rules of the mutual fund companies.
  17. Minimum yearly deposit amount – There is a minimum amount that needs to be deposited both in the SSA and the CMF schemes. For the SSA, the minimum monetary deposit that must be made on a yearly basis is Rs. 1000 and the amount that must be deposited in the CMF is Rs. 500.
  18. Maximum yearly deposit amount – When it comes to the making the a maximum amount of deposit in the SSY account, one will not be allowed to credit more than Rs. 15,000 into a particular account. No such limit is applicable to the CMFs.
  19. Utilization of the money – Most of the money that is collected from the common people, under the schemes is utilized for the development of the nation. The money that will be collected via SSY will be devoted for enhancing the infrastructural development of the nation. Equities, securitized debt, debt instruments, and other such instruments are directly fed by the money that is accumulated via CMFs.
  20. Penalty charged on the account holder – To ensure that the SSY account holder is not defaulting with the yearly deposits, the government will charge a penalty of Rs. 50 in case of failure to pay the money. This disadvantage is not applicable for the people who are depositing money in the CMFs.
  21. Application fee – The banks or the post offices will not charge any money from the account holders of the SSA. It is not the same for the CMFs. Depending on the company and the policy that you choose, you will be charged with a specific application fee.

After accessing all the above points, you will be in a better position to choose a scheme for securing the future the children. One thing must be maintained that both these programs were designed for the long term investments. No matter what you socio economic position is you will be able to find a scheme that will meet your requirements.

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Jun 132017
 

Process to change the name of the girl child in Sukanya Samriddhi Account or SSA

Process to change the name of the girl child in Sukanya Samriddhi Account or SSA. One of the most popular small investment schemes, rolling in the market during the recent times is the Sukanya Samriddhi Yojana. With this, the parents will be able to secure the monetary future of the female children. But changing the name of the account is thought to be an issue. If you have the same nation then this article will assist you.

Changing the name of the account can be done by the parents or the guardian of the account holder. This has to be done if the female child is less than the age of 18 years. You can read Age Limit of Sukanya Samriddhi Account Yojana. If the female child has already attained the age of 18, then they will have the power to change the name of the account by themselves.

Process to change the name of the girl child in Sukanya Samriddhi Account (SSA)

The method of changing the account name is really not that difficult. The steps mentioned below will give you a step by step guide to what needs to be done if you desire to make changes in the name of the account holder:

  1. First of all, you will have to get to the branch of the bank or the post office, where you have opened the Sukanya Samriddhi Account. This has to be done from the home branch of the bank or the post office.
  2. The authority will provide you with an affidavit form. Filling this form is a must as it will contain details about the former name and the name under which the account will be operated from here on.
  3. With this form, it is mandatory to produce photocopies of documents, which will support the claims of the name change. The guardian or the original account holder will need to provide certificate of birth, address proof and other ID proofs like Voter or PAN card.

With all these documents in place, it will not be very difficult to change the name of the account holder. The entire method will not be completed in a day and you will be able to operate the account under the new name.

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