Interest Rates in Sukanya Samriddhi Account

 

Interest Rates in Sukanya Samriddhi Account. The government has recognized that a lot needs to be done for securing the financial future of the female children. Though the situation is far better for the girls born in the urban areas, most of the girl children have to face the hurdles of lack of proper education and get married at a fledgling age. To curb the sorry situation in the rural areas, the central government has taken the initiative to secure the position of the female children by implementing the Sukanya Samriddhi Account scheme.

interest rates in Sukanya Samriddhi Yojna

Sukanya Samriddhi Account Interest Rate

The main aim of the SSY has been to secure the financial position of the girl children. The scheme will provide them with a strong economic foundation to bank on till the time they get married. Till then, the money saved under the scheme can be used in giving them higher education. The money saved under the scheme will only be available to the candidate after a span of 21 years. The schemes is only open for female children under the age of 10 years. Before the fixed span of 21 years, the candidate will not have access to the money.

The PM of the nation Mr. Narendra Modi announced the implementation of the Yojana in the year 2014. When the program was launched, the rate of interest on the deposited amount was fixed at 9.10%. Later on, the government took the decision of increasing the interest rate to 9.20%. One drawback of the Sukanya Samriddhi scheme is that the interest rate is not fixed. The interest rate will fluctuate according to the decision of the government. The interest rate will depend on the financial condition of the nation.

Sukanya Samriddhi Interest Rate vs PPF, FD and RD

The following table will give the interested candidates a quick look at the rate of interest and the basic differences between the SSY, PPF, FD, and RD:

Yojana SSY  PPF FD RD
 Per Annum Interest ( 2016 -2017) 8.60% 8.10% 6-9% 8.40

SSA interest rate change chart

With the implementation of the SSY, the government has been urging the parents of the female children to secure the future of their daughters by enrolling under the scheme. As the rate of the interest is significantly high, the people registering under it stand a chance of acquiring a good amount at the end of the tenure. In the current financial scenario, the SSY is offering the candidates an interest of 8.6%. Apart from the high rate of interest, the amount that has been deposited under the scheme has also been kept outside the taxation structure.

If you want to acquire more knowledge about the various rates of interest under the SSY, the table given below will assist you in your endeavors:

S.No. Fiscal Year Valuation Year Rate of interest Minimum Amount(Rs.) Maximum Amount(Rs.)
1 2016-17 2017-18 8.5 Rs.1000 1.5 lakh
1 2016-17 2017-18 8.6 Rs.1000 1.5 lakh
1 2016-17 2017-18 8.6 Rs.1000 1.5 lakh
2 2015-16 2016-17 9.1 Rs.1000 1.5 lakh
2 2014-15 2015-16 9.2 Rs.1000 1.5 lakh

Comparison between PPF and SSA

One of the most important and popular schemes in which people like to invest their money is PPFs or the Public Provident Funds. If you take a closer look at the features of the PPF and the SSA, you will see that the PPF will offer you some extra advantages, which are not present in the SSA scheme. The following are the important benefits of the PPF schemes over the SSY program:

  1. When the PPF account will mature, the person will get the opportunity to extend the PPF for another term of not more than 5 years. This can be done many times and the person will have to apply for extension within a span of one year. The same extension facility is offered by SSA after the completion of the 14 year term. But the extension can be done for 7 more years only.
  2. The deposition of the amount in the SSA account can only be done by Demand Draft, cheque and cash. On the other hand, the money for deposition in the PPF account can be done by DD, cheque, cash, online banking, etc. The candidate will be offered the opportunity of paying up 12 installments as one time.
  3. People investing in the PPF accounts will get the chance of withdrawing the money after the completion of the 7 year term. The person, who is willing to draw money out of the account, will have to conform to some conditions. For drawing out the entire sum, the candidate will have to wait till the year of maturity. This facility is not available in SSA. Only after the girl child reaches the legal age of 18, the guardian or she will get the chance to draw 50% of the total amount present in the account
  4. The PPF account can be opened by any citizen of the nation. Upper age bar has not been fixed for the scheme. But the account under the SSY can be opened on behalf of a female child, by her parents.
  5. The lowest amount to be deposited in the SSA scheme is Rs. 1000. The lowest amount of deposit to be made in the PPF account is Rs. 500. Thus, it has an upper hand on the deposit amount too.
  6. Candidates opting for saving in the PPF scheme will get the chance of selecting a nominee. The process of nomination is not possible in case of SSA scheme. So, PPF is seen as a better option by the common people of the country.

Benefits with Higher Interest Rate in Sukanya Samriddhi Account

There are no extra points in guessing that the rate of interest offered under the SSY is very lucrative. The candidates stand a chance of getting a significant sum of money at the end of the maturity period. Apart from this, there are other advantages of enrolling under the SSA scheme as well. To start with, the willing candidates who enroll under the program will receive tax exemption, under the Section 80. Secondly, the account can be easily transferred in any part of the country. All the candidates need is the proper documents. Thirdly, the female child, in whose name the account has been opened, will be in a position to activate SSA after attaining 10 years. Once the girl attains the age of 18 and the account matures, the total money saved in the account will be forwarded to her.

Tax exemption

The present rate of interest for Sukanya account is 9.2% and this can be undoubtedly said to be the best of all interest offered by central government. When a guardian or parent is gaining such a good amount of interest rate on Sukanya Account along with EEE tax exemption under 80C, then it is highly likely that people shall try to deposit as much as possible in Sukanya Account. It is a fact that there are no other schemes or fixed deposit schemes that offer such a decent return on deposit. This scheme not only ensures the safety of your girl child, but it also exempts tax from your daughter. Tax in this scenario does not mean income tax. It means if the annual return of an individual from interest rates is more than ten thousand rupees, then a certain amount of tax is deducted, but in case of Sukanya Account, there is no such scenario of such tax deductions.

Additional benefits

The higher rates of interest offered in Sukanya Account makes it a preferred choice for a huge number of individuals especially in rural areas. But at the same time, you need to know that the interest rates might not be consistent in every year, because, rates of interest vary according to economic conditions of every fiscal year. Considering the noble intent of this scheme the government is hoping that it will bring higher rates of interest than other saving schemes. Along with higher interest rates for Sukanya Account, you shall have a few more advantages like EEE tax exemptions, account is completely transferable, girl child shall have operating authority after 10 years and she will get the proceeds on maturity.

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  One Response to “Interest Rates in Sukanya Samriddhi Account”

  1. i have open this account on 2015 and my daughter will be 21 on 2030 – if i keep on paying 150000 till 2030 – how much money will i get

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