RBI/2014-15/494
IDMD(DGBA).CDD.No.4052/15.02.006/2014-15
March 11, 2015
The Chairman and Managing Director/Managing Director
Head Office, Government Accounts Department
State Bank of India/State Bank of Patiala/
State Bank of Bikaner & Jaipur/State Bank of Travancore/
State Bank of Hyderabad/State Bank of Mysore/Andhra Bank/
Allahabad Bank/Bank of Baroda/Bank of India/Punjab & Sind Bank/
Bank of Maharashtra/Canara Bank/Central Bank of India/ Corporation Bank/
Dena Bank/Indian Bank/Indian Overseas Bank/ Punjab National Bank/
Syndicate Bank/UCO Bank/Oriental Bank of Commerce/ Union Bank of India/
United Bank of India/Vijaya Bank/Axis Bank Ltd./ICICI Bank Ltd./IDBI Bank Ltd.
Dear Sir/Madam,
Sukanya Samriddhi Account
We forward herewith a copy of the Government of India Notification No. G.S.R.863(E) dated December 02, 2014 regarding the Sukanya Samriddhi Account for necessary action at your end. The Government of India, vide this Notification, has notified the Sukanya Samriddhi Account Rules, 2014, which came into force with effect from December 02, 2014.
2. Reporting of the Sukanya Samriddhi Account transactions i.e. receipt, payment, penalty, etc. may be directly done through the Government Account at Central Account Section, Reserve Bank of India, Nagpur on daily basis like the transactions of PPF, 1968, in order to have uniformity in reporting, reconciliation and accounting.
3. The Agency banks are required to observe the rules and regulations of the Scheme, and non-observance of rules and regulations would attract penal action, including de-authorization of the branch or bank. Pecuniary liabilities, if any, arising from such non-observance shall be borne entirely by the bank.
4. You may, therefore, approach Central Account Section, Reserve Bank of India, Nagpur for necessary arrangements to report Sukanya Samriddhi Account transactions with immediate effect.
5. Specimen of account opening application form and the passbook of the Sukanya Samriddhi Account are also enclosed for ready reference and necessary action at your end.
6. The contents of this circular may be brought to the notice of the branches of your bank operating the PPF, 1968 Scheme. These instructions should also be displayed on the notice boards of your branches for information.
Yours faithfully
(R. K. Singh)
Deputy General Manager
About Scheme:
• Rate of interest 9.1% Per Annum(2014-15),calculated on yearly basis ,Yearly compounded.
• Minimum INR. 1000/-and Maximum INR. 1,50,000/- in a financial year. Subsequent deposit in multiple of INR 100/- Deposits can be made in lump-sum No limit on number of deposits either in a month or in a Financial year
• A legal Guardian/Natural Guardian can open account in the name of Girl Child.
• A guardian can open only one account in the name of one girl child and maximum two accounts in the name of two different Girl children.
• Account can be opened up to age of 10 years only from the date of birth. For initial operations of Scheme, one year grace has been given. With the grace, Girl child who is born between 2.12.2003 &1.12.2004 can open account up to1.12.2015.
• If minimum Rs 1000/- is not deposited in a financial year, account will become discontinued and can be revived with a penalty of Rs 50/- per year with minimum amount required for deposit for that year.
• Partial withdrawal, maximum up to 50% of balance standing at the end of the preceding financial year can be taken after Account holder’s attaining age of 18 years.
• Account can be closed after completion of 21 years.
• If account is not closed after maturity, balance will continue to earn interest as specified for the scheme from time to time.
• Normal Premature closer will be allowed after completion of 18 years /provided that girl is married.
Know everything you wanted to know about the new investment avenue.
1. Who can open the account?
This account can be opened only for girl child who is below 10 years of age (as of account opening date) by their natural or legal guardian. One year relaxation is available for this year, which means even if the child has turned 10 anytime in 2014, you can still open this account in her name.
The account can only be opened for 2 girl children. Third account can be opened in exceptional cases where the depositor was blessed with 3 girl children at the first birth or twin girl children at the second birth.
2. Where can the account be opened?
The account can be opened in most public sector banks and Post offices.
I personally would advise going to large public sector banks like SBI as they are more advanced in terms of online access etc. As this is new investment avenue most banks would not have online access in place, but going forward larger banks would be first to bring those accounts online thereby giving convenience as it happened in case of PPF.
Moreover, the account can be transferred anywhere in India.
3. How much interest would be paid?
The interest would be paid annually and would be notified every year by Government of India like in case of PPF.
For Financial year 2014-15 its 9.1%.
4. What are the documents required?
You would require the following documents for opening of account:
Date of Birth proof for the child
Your Identity Proof
Your Address Proof
These are regular KYC documents that you require for opening a new bank account.
5. Rules for Deposit?
The account can be opened with minimum deposit of Rs 1,000 and multiples of Rs 100 thereafter. The maximum amount that can be deposited in the account is Rs 1.5 lakhs every financial year.
The deposit has to be made in cash, cheque or demand draft. Online option might be available in future as banks connect this with core banking.
Also minimum deposit of Rs 1,000 needs to be made every financial year; else a penalty of Rs 50 would be levied.
6. Premature withdrawal?
Depositors can withdraw 50% of the balance after the girl child turns 18 for higher education or marriage only.
7. Account Maturity?
The deposit has to be made for first 14 years from the year of account opening. The account matures either from 21 years from the date of account opening or when the girl is married, whichever is earlier.
Account would be closed prematurely in event of death of the girl child.
8. Loan Facility?
There is NO loan facility under this scheme.
9. Taxation?
Budget 2015 has made taxation of Sukanya Samriddhi Account EEE – i.e, “Exempt”,”Exempt”,”Exempt”. This means that the amount deposited up to Rs 1.5 lakh gives tax exemption u/s 80C.
Moreover there is no tax on interest received in the account and also there is no tax on withdrawal at maturity.
Recommendation:
Sukanya Samriddhi Account is a good initiative from Government to secure the future of girl child. Also the offer of higher interest rates than PPF is a welcome proposition.
Also Budget 2015 has made the product tax free at the time of maturity which is similar to PPF. So in most cases Sukanya Samriddhi Account is better alternative to PPF for girl child. This said you should also look to equity mutual funds for planning your child’s future.
