The central government renamed the Sukanya Samriddhi Yojana to Sukanya Samriddhi Account Scheme, 2024, and the Post Office Time Deposit Scheme to the National Savings Time Deposit Scheme, effective January 1, 2024, with revised interest rates. On Sukanya Samriddhi Yojana the government notification on February 12, 2024, said, “This Scheme may be called the Sukanya Samriddhi Account (Amendment) Scheme, 2024. It shall be deemed to have come into force on January 1, 2024.”
"The deposits made in the account on or after the 1st day of January 2024 and the balances at the credit of the account shall earn interest at the rate of 8.2 per cent. per annum,” the government added.
Notably, the interest rates for deposits made in the SSY account from January 1, 2024, onwards have been adjusted to 8.2 per cent per annum, and 3-year post office deposits were hiked by 10 per cent, which was announced 3 months earlier. But the government reiterated it as a formal announcement saying," “By giving retrospective effect to the Sukanya Samriddhi Account (Amendment) Scheme, 2024, no one shall be adversely affected as a result of retrospective effect being given to this amendment.”
Sukanya Samriddhi Account Scheme
Sukanya Samriddhi Account Scheme is a government scheme aimed at securing a girl child's future, by helping cover education, marriage, and other expenses. SSY accounts must be opened before the child turns 10 years of age. Investments can range from Rs 250 to Rs 1.5 lakh yearly.
Applications are processed through select banks and post offices and require documents like birth certificates and KYC proofs. The scheme matures in 21 years and offers tax-exempt returns. Premature closure is allowed for a girl's education, with partial withdrawals permitted after the girl turns 18. Failure to deposit every year in the account being 'discontinued.' To reactivate it, a minimum payment of Rs 250 per defaulted year and a penalty of Rs 50 per inactive year is warranted.
Post Office Time Deposit Scheme
Another name change involves the Post Office Time Deposit Scheme, which will now be known as the National Savings Time Deposit Scheme. This renaming will also be effective from January 1, 2024.
The National Savings Time Deposit Scheme provides annual interest payments which are calculated quarterly. The annual interest may be credited to the account holder's savings account by applying. The deposit amount can range from Rs 1000 to any amount. The investment under 5-year TD qualifies for the benefit of section 80C of the Income Tax Act, 1961. No deposit shall be withdrawn before the expiry of six months from the date of deposit.
The government had increased the interest rate on three-year time deposits by ten basis points (bps), from 7 per cent to 7.10 per cent. These prices are effective from January 1, 2024. On one-year deposits, the rate of interest available is 6.9 per cent, two-year deposits will attract an interest of 7 per cent, three-year time deposits will accrue interest of 7.1 per cent and five-year deposits will attract an interest of 7.5 per cent.
