Drawbacks of Sukanya Samriddhi Account


Drawbacks of Sukanya Samriddhi Account

Sukanya Samriddhi Account was launched under the prestigious girl child campaign ‘Beti Bachao, Beti Padhao, and promises financial security for the girl child at the time of her marriage or higher education.  This scheme, thus shares burden of modern parents in getting their daughter a better future.  The scheme was launched to ensure promising future to the girl child in the wake of rising female feticide and uneven sex ratio.

While the scheme has been accepted well by may parents and has quite a many advantages, it certainly has some drawbacks which could hold several parents from not investing in it:  Some of the drawbacks as per analysts are mentioned below:

Drawbacks of Sukanya Samriddhi Account

High Lock-in-Period

The lock in period of the scheme is certainly a concern for many.  As per the scheme, the account matures after 21 years of opening, which means parents would have to wait for quite long in order to get the complete benefits.  Partial withdrawal is allowed after only 18 years, but only 50 per cent can be withdrawn.

Limitation on Number of Account

The scheme targets lower income group mainly.  And it is quite true that most of the low income parents do have more than two daughters.  As per Sukanya Samriddhi Scheme, parents can open SSA for only two daughters.  This way, if someone has more than two daughters, they could never be brought under the scheme and thus could not benefit by it.

Payments to SSA can’t be made online

This is one of the biggest drawbacks of the scheme.  Today is the time of internet.  When everything is happening on internet these days, making Sukanya Samriddhi Account only payable through cash, demand draft and cheques would certainly limit the scope of the scheme.

There are many young parents from middle or lower-middle income group who are doing every transaction on internet.  They hardly visit bank branches. For them, it would be hard to keep depositing money in cash or cheque at the branch.

Less clarity on what could be the future Rate of Interest

This again is quite a significant drawback of Sukanya Samriddhi Scheme.  The rate of interest of this scheme would keep changing every year based on overall financial growth of the economy.  This jeopardizes the future of the scheme.

Last but not the least, every central government would have a say in this scheme.  This throws SSA in a state of fluidic condition.  Today, the scheme promises quite a handsome rate of interest of 9.1 per cent, which is even higher than PPF.  However, we are not sure if it would continue to be the best small saving option in India, as is today.

Other Articles 

  1. Sukanya Samriddhi Account vs LIC
  2. Sukanya Samriddhi Yojana vs Child Mutual Fund
  3. Premature Closure Rules for SSA
  4. Is Sukanya Samriddhi Account transferrable

  2 Responses to “Drawbacks of Sukanya Samriddhi Account”

  1. No provision of online transfer under SSA is the biggest drawback. And I am surprised why there is no provision in this digital world.

  2. It has to be their in our digital India, it will be very convenient.

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