5 Things to Note Before Investing in Sukanya Samriddhi Yojana

The Government of India launched the Sukanya Samriddhi Yojana in 2015 under the Ministry of Women and Child Development. It is the government’s flagship savings scheme that allows individuals to deposit in a post office account or a savings account with any public sector financial institution. 

Sukanya Samriddhi online is a part of the “Beti Bachao, Beti Padhao” campaign of the Indian Government. Individuals invest in this scheme to accumulate a substantial corpus over time. The accumulated fund is usage-bound and can only be used to finance a girl’s educational or wedding expenses. 

It is a sovereign debt instrument implying high security and assured returns. The interest on it is calculated on a quarterly basis, and such interest rate depends on yields of the government sector.

Things to consider before investing in Sukanya Samriddhi Yojana

As it is a long-term investment scheme, there are few things which you should consider before committing to it. These are – 

1. Period before daughter’s education and marriage 

You should consider the time left for your daughter’s education and marriage when investing in the scheme. It should be taken into account that the Sukanya Samriddhi Scheme has a strict time frame for different variables of the scheme. According to its guidelines, the beneficiaries should be below 10 years of age when you make the first deposit. 

Other than that, the first application for premature closure of the account can be put forward after 5 years of your deposit is completed. Even then, the plea for foreclosure shall be made on substantial grounds to allow a prominent interest rate to be earned. In any other event, the interest rate shall be brought down to post office savings account rates. 

Henceforth, you can apply for more flexible investment options such as a fixed deposit to ensure considerable corpus accumulation without such strict time constraints. 

2. Account activity

You need to make yearly investments for 15 years to keep the account operational. The minimum deposit value for such is Rs.250 and in multiples of 100. You can make an annual investment of up to Rs.1.5 lakh. Therefore, when deciding to invest in Sukanya Samriddhi online, you should consider whether you can manage to invest in the scheme consistently. 

Retired individuals, on the other hand, can consider investing in fixed deposits to ensure higher returns. Financial institutions such as Bajaj Finance provide considerably high senior citizen FD rates.

3. Premature withdrawal policies 

As per the guidelines of the scheme, you can make a withdrawal when your daughter reaches the age of 18. Such withdrawal should be on account of your daughter’s needs. 

You can withdraw up to 50% of the deposited value to meet her educational expenses for which you need to provide orderly papers (admission proof) and substantiate your claim. Withdrawal limit would be thus set as per the educational finances required. 

Alternatively, you can consider other investment options to ensure your child has a secure future. 

4. Maturity period

The maturity period for Sukanya Samriddhi online is 21 years. However, you only need to invest for the first 15 years of the scheme. In the last 6 years, interest would accumulate in your account as per the applicable rate. 

You cannot foreclose the account before such period unless your daughter is getting married. To materialise such premature closure, you will need to furnish an affidavit that would attest to the fact that your daughter is above the age of 18. 

5. One account per daughter

You can only open a single account in the name of your daughter. The maximum number of accounts allowed per family is two, with exceptions in cases of twins. 

These are the factors which you take into consideration before investing in Sukanya Samriddhi online. Although it is a beneficial scheme which enables individuals to meet their daughter’s educational expenses and wedding expenses, its stringent features make it inconvenient in the long-term. 

On that account, if you are an early investor, you should invest in an FD to reap long-term benefits. A company fixed deposit comes with high interest rates to ensure you can build a substantial corpus over time without imposing such stringent terms.

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