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Due to growing inflation and the benefits of compounding, it is advantageous to start investing or saving as early as possible for the benefit of children by placing the most priority on their future. A risk-free investment option will be a sensible choice when it comes to saving for your child, and parents should be informed that the Finance Ministry has opted to retain the rates for post office small savings schemes the same for the second quarter of FY23. Small savings accounts are the best option since they are backed by the Indian government, and the Department of Posts offers the Sukanya Samriddhi Account (SSA), a well-liked initiative that not only provides safe returns but is also limited to girl children.
A guardian can create accounts in a girl's name who is younger than 10 years old. The account can be started at your local post office or bank, and guardians should be informed that only one account can be opened in the name of a girl child, with the exception of twins or triplets. A Sukanya Samriddhi Account (SSA) can be opened with a minimum deposit of ₹250 up to a limit of ₹1.50 lakh in a financial year and deposits may be made for a maximum of 15 years after the account is opened. If the required minimum deposit is not deposited in an account during a fiscal year, the account will be closed and defaulted accounts can be reactivated prior to the expiration of 15 years from the date of account opening by paying the penalty amount of ₹50 along with the minimum deposit of ₹250 for that financial year. Parents should note that deposits made under Sukanya Samriddhi Accounts are income tax-deductible up to ₹1.5 lakh under section 80C of the Income Tax Act.
After a girl reaches 18 years of age or has completed the 10th standard, guardians can withdraw money from the account up to 50% of the balance in a financial year. According to the regulations set by the Department of Posts under the Ministry of Communication, withdrawals can be accomplished in a single transaction or in installments, with a maximum of one withdrawal per year with up to a limit of 5 years. The account will be managed by the guardian until the girl child turns 18 years old, at which point she will be allowed to handle it herself and make deposits and withdrawals. However, the maturity amount can be withdrawn or in simple words, the account will mature after 21 years from the account opening date or at the time of the marriage of the girl child after she turns 18.
Guardians should be aware that Sukanya Samriddhi Accounts (SSA) can be prematurely liquidated after five years from the date of account inception. Premature withdrawals are nonetheless subject to certain situations, such as the death of the account holder or the demise of the guardian and incase of the extremely poor health condition of the account holder. By submitting an application form along with the required documents/passbook at the concerned bank or post office, premature withdrawals can be made. In the event of an early or premature withdrawal w When an account holder passes away, the Department of Posts will apply the interest rate of Post Office Savings Accounts from the date of death until the date of payment of the withdrawal amount.
For the quarter of July-September in FY 2022-23, the Ministry of Finance has maintained the interest rates unchanged for the small savings schemes at their current levels. This information was released by the Ministry of Finance in a circular dated June 30, 2022. In other words, Sukanya Samriddhi Accounts (SSA) will continue to give an interest rate of 7.6 per cent per year for the quarter ending September 30, 2022. This interest rate is calculated on an annual basis and is compounded annually. The available balance in the account between the fifth day and the end of the month will be used to determine interest for the month, and interest will be issued to the account at the conclusion of each fiscal year. Additionally, under section 80C of the Income Tax Act, the interest generated through the Sukanya Samriddhi Account (SSA) is tax-free.