Post Office Scheme for Children: The PPF and Sukanya Samriddhi Scheme of the post office have worked immensely for the future of children.
Post Office Small Savings Scheme for Children
The Central Government’s Sukanya Samriddhi Yojana (SSY) is a very popular scheme, which is being run keeping in mind the safe future of daughters. This account can be opened in the name of daughters below 10 years. At the same time, you should also know that according to the current rules of Public Provident Fund (PPF), you can open a PPF account in the name of your minor.
Any individual can open a PPF account in the name of his child. Just until the child is 18 years old, the guardian has to look after this account. Both schemes are popular schemes giving better returns in small savings. If you are wondering where there is more beneficial then this report can be useful.
Any individual looking at the future of his child can also open a PPF account in his name. Parents have to take care of the account till the age of 18 years. After 18 years, the child can manage this account himself.
Sukanya Samriddhi Yojana
The account can be opened in any post office or commercial bank under Sukanya Samriddhi Yojana (SSY). Generally, banks which have the facility to open the Public Provident Fund (PPF) accounts, also have the facility to open Sukanya Samriddhi Yojana accounts.
Where can you open an account?
Both schemes are run by the Post Office. Apart from this, banks which have the facility to open the Public Provident Fund (PPF) account also have the facility to open Sukanya Samriddhi Yojana Account (SSY).
PPF: The maturity of a PPF account is 15 years, but it can be extended for 5–5 years.
SSY: The maturity of Sukanya Samriddhi Yojana is 21 years, but parents have to invest only 14 years in it.
Rate of interest
PPF: The interest rate on PPF account is being compounded at 7.1% per annum compounding.
SSY: The current interest rate on Sukanya Samriddhi Yojana is being met at 7.6 per cent compounding annually.
PPF: If you deposit money in PPF account in the name of the child too, then you will get the benefit of tax exemption under Section 80C of the Income Tax Act. It is a very popular option for long term investment, where both interest and maturity are tax-free.
SSY: Tax exemption can be availed under Section 80C of Investment Income Tax Act under Sukanya Samriddhi Yojana.
Minimum and maximum investment
PPF: The minimum limit for depositing minimum and maximum in this account is Rs 500 and 1.50 lakh. But keep in mind that if the PPF account is also opened in the name of the guardian, then the maximum amount limit will be considered by including both accounts. It is not that 1.5 lakhs can be deposited annually in both accounts.
SSY: Minimum Rs 250 can be deposited annually in Sukanya Samriddhi Yojana. A minimum of Rs 250 and a maximum of Rs 1.50 lakh can be deposited annually under the scheme.
PPF: Return Calculator
Suppose you have opened a PPF account for the child as soon as 1 year. First, its maturity will be 15 years. By then the child will be 16 years old. At the same time, by increasing it to 5 years, the child will be completed 21 years.
For 15 years of maturity
|Maximum Monthly Deposit||Rs 12,500|
|Maximum annual deposit||Rs 1,50,000|
|Rate of Interest||Compounding 7.1% per annum|
|Amount at maturity after 15 years||Rs 40,68,209|
|Interest benefit||Rs 18,18,209|
5 more years, that is, 20 years
|Total investment||Rs 30,00,000|
|After 20 years, the amount on the maturity||Rs 66.58 lakh|
|Interest benefit||Rs 36,58,288|
SSY: Return Calculator
|Annual deposit||Rs 1.50 lakh|
|Deposited in 14 years||21 lakhs|
|Rate of interest:||7.6 percent|
This amount will be Rs 37,98,225, according to the compounding of 7.6% per annum in 14 years.
Then for 7 years, this amount will yield 7.6 percent annual compounding.
This amount at 21 years i.e. maturity: Rs 63.5 lakh
Interest benefit: Rs 42.5 lakh.
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