Providing a bright future for their kids is every parent’s dream. Seeing their child lead a happy, peaceful and successful life is all what they want and is for what they strive hard and toil themselves.
The Government of India has come up with a lot of schemes that help parents save up for their children’s bright future. The schemes of the Government that can be taken up in the post offices are the most safest bet where you can invest in.
A wise decision would be to know the details from different sources to see which would be the best scheme to invest in.
The schemes can be chosen based on the purpose for saving intended be it for a male or a female child. Moreover these plans offer high interest rates.
Visiting the nearest post office will help in knowing more about the schemes and the eligibility procedures for the same.
Here is a brief about the different schemes that are available.
Public Provident Fund (PPF)
A scheme that aims at saving taxes, this comes with a locking period of 15 years which can be extended to another five years. Requires a minimum deposit of Rs. 500 to maximum of 1.5 lakhs.
Post the third year the depositor can also avail loan against the investments. The interest rate for this scheme is determined by the Government with respect to change in market conditions. The current interest rate is 7.1 which is subject to changes.
It is a great option to invest in this scheme for your minor child, because they would be able to operate the account once the lock in period gets over and they become majors. They do not have to wait for the entire lock in period to withdraw the amount.
National Savings Certificate (NSC)
The scheme comes with a minimum deposit of Rs. 100, a tenure of five years and an interest rate of 6.8. There is no maximum limit. Investors can claim tax benefits upto 1.5 lakhs in this scheme.
The government revises the interest rate yearly so keep a check on this. Transfer within post offices is hassle free in case of work transfers.
Recurring Deposit (RD)
Recurring deposit, RD is a scheme that enables monthly investments. The tenure is five years and cannot be withdrawn. The minimum amount is Rs. 100 and no limit on maximum amount.
Term deposit (TD)
The term deposit requires a minimum investment of Rs. 1000. Has the benefit of claiming tax exemption. The interest rate is subject to changes every quarter by the government based on profit of government securities and other factors. Reinvestment of interest rate post one year can yield higher amount of returns. The interest can be redirected to the five year recurring deposit scheme as well.
Post office Monthly Income Scheme
The scheme offers monthly income to the parents. Can be opened only if there is a savings account with the post office. The lock in period is about five years. The scheme enables premature withdrawals with penalties. The minimum amount to invest is Rs. 1500 to a maximum of Rs. 4.5 lakhs. The government fixes the interest rate every quarter.
Kisan Vikas Patra (KVP)
The scheme comes with a lock in period of 30 months with a minimum amount of Rs. 1000 to no limits in the maximum. However if depositor wants to invest more than 10 lakhs an income proof is necessary. Offers high guarantee income with higher interest rates. The depositor must be aware that the interest rate is taxable .
Savings account
Post office savings account is similar to the one in banks. It offers a 4% interest. Has a minimum deposit amount of Rs. 500 and no maximum limits. The minimum balance to be maintained is Rs 50. Enables any time withdrawal of amount.
Sukanya Samriddhi Yojana
The scheme is specifically for girl child. Can be opened before attaining the age of 10. Comes with an interest rate of 7.6 for the entire tenure. The child can get maturity benefit post 21 years. Requires a minimum deposit of Rs. 1000 to maximum of 1.5 lakh. The scheme is flexible to be transferred anywhere within India .
Ponmagan podhuvaipu nidhi
This is a scheme offered by the Tamilnadu Government for male child and can be availed only by the people of the state. The scheme is eligible for kids under 10 . The minimum amount to deposit is Rs. 500 and maximum of 1.5 lakhs. The rate of interest is 9.7 which is subject to changes. Tax deductions to this can be claimed.
Choosing to save early is a wise decision. But planning where to invest needs a lot of market research and thinking. These schemes since they are part of the Government have security factor on the higher end which enables them to be one of the best choices for parents to save for their kids future.
That Madras Mom 