As part of Government of India’s initiative to empower girl children, it introduced the Pradhan Mantri Sukanya Samriddhi Yojana or PMSSY. It is an investment scheme which allows parents or guardians of a girl child to build a fund to meet her educational and wedding expenses. The government also provides income tax exemptions on this scheme so that it can be more beneficial for a girl child.
Before investing in a Sukanya Samriddhi Yojana, here are several things that one should know about it.
Who can operate the account?
The guardians of a girl child in India can apply for a PMSSY account any time before she becomes ten years old. They will operate the account until the girl child becomes legally adult. The PMSSY account should be handled compulsorily by the girl child after she becomes 18 years old.
How to avail the application form?
The application form for PMSSY can be availed from the post office or any designated financial institution. Apart from that, one can also download the application form from the official website of any of the following –
- India Post.
- Reserve Bank of India.
- Official website of any of the participating financial institutions.
What are the documents required to open a PMSSY account?
The following documents should be kept handy while applying for an account under Pradhan Mantri Sukanya Samriddhi Yojana –
- Identity proof of the guardian or natural parent. It includes driving license, passport, PAN, Aadhaar, etc.
- The depositor’s address proof. It includes documents such as Voter ID, Aadhaar, recent electricity bill, ration card.
- Birth certificate of girl child
- Duly filled in application form.
- Medical certificate in case of twin girl children
- Other related documents as required by the post office or financial institutions.
Besides the above points, one should be aware of the following features of Pradhan Mantri Sukanya Samriddhi Yojana –
- Government of India allows tax exemption on the interest and the deposit amount of up to Rs.1.5 lakh under Section 80C.
- Deposits have to be carried out every year from the date of opening the account for a period of 15 years. The minimum deposit is Rs.250, and the maximum is up to Rs.1.5 lakh. The deposit to PMSSY account can be made via online payment options as well as cheque, cash or demand draft.
- The amount in this account can be transferred to any other post office or bank account within India easily by furnishing proof of a change of residence of the girl child or her guardians.
- Premature withdrawal or closure of PMSSY account is not allowed except in certain extreme cases. It includes –
- To meet expenses related to higher education. However, account holders can only use fifty percent of the total deposit amount.
- If sufficient proof is provided that account holder, her parents or guardian is unable to meet the expenses to continue the account.
- If the account holder, after turning 18 years of age gets married, she can withdraw the full amount from the account and close it to meet her marriage expenses.
- Untimely demise of the account holder.
In spite of the above features, one of the significant restrictions of is that a family can only hold two accounts for two girl child. In such cases, they can consider other investment options, such as fixed deposits.
Most financial institutions and NBFCs offer FDs. Consequently, to ensure that you receive maximum returns on your savings, you should consider companies which provide the highest FD interest rates. Hence, you should know how to pick the right NBFC for a fixed deposit.
With a fixed deposit account, you can also choose to receive the interest as per your convenience. It is also essential for you to know how the tenor on your FD affects its interest rates.
You can also use a fixed deposit calculator to evaluate your interest and frame your financial plan accordingly. Furthermore, one can also avail a loan against their fixed deposit if they require emergency funding.