The girl child small saving scheme Sukanya Samriddhi Yojana in accordance with the notification dated December 12, 2019 has been modified by the finance ministry and the then applicable scheme rules have been repealed and substituted with new provisions.
Below are listed the changes in the Sukanya Samriddhi Yojana Scheme that you should know:
1. Operation of SSY account:
As per the new rules, the Sukanya Samriddhi scheme account cannot be operated by the girl child unless she turns 18 years in age. Earlier, the scheme allowed the account to be operated by the girl child as and when she attains the age of 10 years. Until then now the account will be operated by the guardian. Also, as and when the girl child or account holder turns 18, the required documents need to be provided where the SSY account is maintained.
2. Default accounts to earn interest as applicable to the scheme:
There is a minimum sum which is to be contributed mandatorily to the account every financial year and for the SSY account it is Rs. 250 every year. If not paid, the amount becomes a default account. Now as per the new rules, default accounts will continue to fetch interest rate as applicable to the scheme until the account matures, if it is not reinstated until then.
As per the previous schema of things, such 'default accounts' would fetch interest rate as on the post office savings bank account which is much lower than the interest rate on SSY account. For the quarter April-June 2020, interest rate on SSY account is 7.6% per annum while interest rate on post office savings bank interest rate currently stands at 4%. The new rule hence applies to default accounts of SSY scheme both due to the death of the guardian or accounts 'other than due to the death of guardian'.
3. Changes in relation to premature account closure:
Now as per the new rules, premature account closure of SSY scheme is allowed only if the account holder or the girl child in whose name the account is maintained dies or on some compassionate grounds including medical treatment of the account holder for critical ailments or on death of the guardian.
Earlier the account could be closed when the girl child dies or if there is any change in residency status of girl child. But in the rules, it is not specified whether on change in residency the account will have to be continued until maturity or can be closed prematurely.
"The new scheme refers to the provisions of Government Savings Promotion General Rules, 2018 in relation to the matters for which no rules is prescribed in the 2019 scheme. Accordingly, as per the General Rules, 2018 if the account holder (girl child) subsequently becomes non-resident, the account shall be continued till maturity. However, the benefits shall be available to the account holder only on non-repatriation basis. Further, the account shall not be allowed to be extended or continued beyond maturity, even if such extension or continuation is otherwise permissible and no interest shall be payable after the date of its maturity. Further, if the account holder ceases to be a citizen of India, the account shall be closed or deemed to be closed from the last day of the month preceding the month in which the depositor ceases to be an Indian citizen", Chadha, People Advisory Services - Partner, EY India said.
Further, in the above case, the account from the deemed date of closure will continue to fetch post office savings bank account interest rate until the amount is withdrawn from the account.
4. For opening account for more than 2 girl child:
In accordance with the new laid down rules, in case of account opening for more than 2 girl children, in addition to the birth certification, there is also an additional documentation requirement of an affidavit. In the previous instance, guardian was required to furnish medical certificate. Under the scheme, per family the account can be opened for a maximum of 2 girl child. "If the first birth results in twin/triplets girls, then more accounts cannot be opened in case of second birth of girl child. However, third account can be opened for a girl child in a scenario of birth of twin girls as second birth or if the first birth itself is triplet", added Chaddha.
5. Additional minor modifications:
As per the new rules, interest on SSY account will be credited at the end of the financial year. Also, the norm of reversing wrongly credited interest in the SSY account has been withdrawn in consideration of the fact that now interest rate as on the scheme applies to all default accounts.