NEW DELHI: Focused on providing India’s girl children and their parents a secure, relatively remunerative savings scheme with a substantial payout when they turn adults, the Sukanya Samriddhi Yojana has become a favoured investment tool among the target population. Small tweaks to the scheme over the five years since its launch in 2015 have served to make it friendlier to account holders, the most recent of which have relaxed the penalty for default accounts and made it easier to pay medical expenses. 
The scheme allows parents to make between Rs 250 and Rs 1,50,000 as a deposit per year at an interest rate of 8.4 per cent per annum for a period of 14 years. 

The deposit will continue to earn applicable interest until it matures 21 years from the date of account opening with potential payouts exceeding Rs 50 lakh. Before the government’s December 2019 notification, accounts where the depositor had missed making the minimum payment were considered default accounts and did not attract the higher 8.4 per cent interest until they were regularised. However, under the new rules, such default accounts will continue to earn the applicable interest rate until the date of maturity as opposed to the earlier system of paying only the post of savings bank rate, which is just 4 per cent currently. 

The changes have also made it much easier for account holders to get cash from their deposits in times of medical emergencies. Under the pre-December 2019 system, premature account closures were allowed only in two cases: death of the girl child or change in her residency status. However, the recent changes also add compassionate grounds as a valid reason for premature closure and payout, which experts say will also include medical emergencies or treatment for the girl child. 

In case of change of residency status or the account holder ceases to be a citizen of India, the account will be deemed closed from the last day of the previous month when the account holder ceased to be a citizen. In these cases, the deposited amount will continue to be in the account until the account holder chooses to withdraw it, but will only earn the post office savings bank interest rate from the date of closure. 

a central scheme for the girl child
Sukanya Samriddhi Yojana allows parents to make between `250 and `1,50,000 as a deposit per year at an interest rate of 8.4 per cent per annum for a period of 14 years.