Should You Choose Post Office Sukanya Samriddhi Scheme To Secure Your Daughter's Future

Sukanya Samriddhi, a popular Post Office (PO) scheme is offered to provide a secure future to your girl child, as the name suggests. A parent should take up this scheme under his/her girl child's name, who must be aged below 10 years. The account will be operated by the parent till the girl child attains her age of 18 years. The parent or account holder can deposit money in the Sukanya Samriddhi account maximum up to the completion of 15 years from the date of account opening. A parent can open only one account in a PO, only in case of twins or triplets girls birth, more than two accounts can be opened.

You can sign up for the Sukanya Samriddhi scheme to spend a lump sum amount during your child's marriage, or for her education without much financial burden at once. The plan will also provide installment options of withdrawal if you do not want to withdraw the amount at once. You can obtain the form for the Sukanya Samriddhi scheme from the Post Office, or online on the PO official website.

Interest rates under Sukanya Samriddhi

The rate of interest under the Sukanya Samriddhi scheme is 7.6% Per Annum (PA) which is calculated and paid yearly. A parent can deposit a minimum of Rs. 250 and a maximum of Rs. 1,50,000 in a Financial Year (FY). PO informs, "Subsequent deposit in multiple of Rs. 50 deposits can be made in a lump sum, no limit on the number of deposits either in a month or in a financial year." However, if one fails to deposit a minimum of Rs. 250 in an FY, the account will be considered as a default account. The account can be closed on maturity after 21 years from the date of account opening, or at the time of the girl child's marriage attaining the age of 18 years. You can deposit the money online, no need to visit the PO physically every time. Interest earned is tax-free under Income Tax Act.

Under the Sukanya Samriddhi scheme, you will have to deposit the money periodically, either monthly, quarterly, or yearly, etc, according to your wish. But at the time of need, when the scheme will mature, the girl will be able to utilize the money for her future after completing 18 years. This long-term plan is a good financial security for your girl child with a lucrative interest rate, along with this plan you can also check the LIC Jeevan Lakshya for the same purpose. However the basic difference between these 2 plans is, in the PO Sukanya Samriddhi scheme you can deposit the money in the account as your accordance, but in the LIC policy you are needed to deposit a fixed amount each year, either monthly or quarterly or yearly.

Amount withdrawal

A partial withdrawal may be taken by the guardian up to 50% of the balance available in the Sukanya Samriddhi account at the end of the preceding FY after the girl child attains the age of 18 or passed the 10th standard class. The parent can withdraw the money in one lump sum or installments, not exceeding one per year, for a maximum of five years.

Premature closure of the account

A normal premature closure is possible only after the child becomes 18 years old, on the occasion of her marriage with all documents provided. Otherwise, in case of a life-threatening decease of the account holder, or if the account holder dies, or if the guardian by whom the account operated dies, the account can be closed prematurely after 5 years of account opening.

Should you choose the Sukanya Samriddhi scheme?

However, due to inflation, the interest rates of all the schemes were falling. In the Sukanya Samriddhi scheme, the interest rate was 8.5% in June 2019, which has been deducted gradually and it stood at 7.6% in June 2020, which is continuing to date. The pandemic has forced the PO to keep the interest rates low, as per the present monetary policy. The interest rate changes quarterly. So, the falling interest rates are concerning some people now.

Although the interest rates are falling, it is a secured plan by the government, unlike equity or stock markets linked policies. Money in the equity market is not stuck for a very fixed long-term period, you can withdraw at any time. In many stocks or mutual funds, a guardian can have better interests, even double interests from the same amount invested. But certainly, it will stay at risk of market volatility. So, if your lookout is to secure your money on a long-term basis with fixed interest, even if it is low, you can take up this policy. You should compare the Sukanya Samriddhi scheme with other term deposit offers by the Post Office, or LIC, or other banks. You can check that the interest rate in the Sukanya Samriddhi scheme is mostly better than other plans. Hence, it is a popular choice by parents. However, you should compare the Sukanya Samriddhi scheme with the LIC Jeevan Lakshya for the same purpose.