People generally save money for their children for several reasons – be it marriage, health, education, or career, or more than one reason. Saving money for your child comes with multiple benefits. Some money set aside always comes in handy in case of financial emergencies. One of the oldest organizations in India which still exists is the Post Office. Indian post offices have been present for a very long time. They have helped the citizens of India in developing and nurturing savings and investment habits. During the last few decades, the Indian Post Office has provided several savings schemes to its account holders. Many attractive schemes have been launched in India that benefit both male and female children. The best parts of investing in these schemes are:
Most of these schemes have a minimum opening amount of ₹500 and come with a decent rate of interest, which is subject to variation annually, depending on the then-present market. Opening a post office savings scheme account is hassle-free since the post office is usually located in almost every locality. In this age of digitization, with the whole world going digital, post offices are also following the same suit so that you can keep a check on transactions sitting on your couch at your home.
There are many useful postal schemes for the boy child, which you can invest in. Below mentioned are some of the saving schemes for boy child available in present India-
Post Office Saving Schemes for the Boy Child in India
1. Ponmagan Podhuvaippu Nidhi Scheme
There have been several girl child saving schemes since the beginning, for example – Sukanya Samriddhi Yojana, which is a highly popular investment scheme for the girl child. But there weren’t any saving schemes for the boy child. So, this male child savings scheme called “PonmaganPodhuvaippu Nidhi” was launched by Tamil Nadu post offices after receiving a lot of requests and appeals from the common people. With this scheme, parents can open an account at the post office in the name of their boy child. These are its salient features:
The PonmaganPodhuvaippu Nidhi was launched in September 2015. It is limited only to Tamil Nadu and is not available throughout India. The parent or legal guardian has to open the PonmaganPodhuvaippu Nidhi account before the boy child reaches the age of 10 years and the minimum pre-decided contribution to be made by the depositor parents annually is ₹500, while he/she can contribute a sum of ₹1.5 lakh maximum under the scheme. A depositor can make less than or a maximum of 12 contributions in a year. The rate of interest is decided every year, depending on government policies and market conditions.
The depositor parent can use the scheme to avail of a loan for the said period. The loan facility becomes available only after it has been 4 years from when the account was opened. Under Section 80C of the Income Tax Act, an individual can claim tax benefit and deduction up to a maximum limit of ₹1.5 Lakh per year. Moreover, along with the amount invested, any interest earned on the investment (an exception being the interest earned in the previous year) can totally be claimed as a tax deduction under the same provision, i.e., Section 80C ranging to an overall limit of ₹1.5 Lakhs.
Apart from the PonmaganPodhuvaippu Nidhi scheme, which is available only in the state of Tamil Nadu, there are various other options as well that work throughout India-
2. Post Office National Savings Certificate (NSC)
Post Office National Savings Certificate has been around since the 1950s. Earlier NSC was issued with the goal of raising money to aid the development of India. Later the NSC was converted from a fund-generating investment scheme to a tax-saving investment scheme. Any parent or legal guardian can open an NSC account in the name of the minor male child if he is below 18 years of age. The minimum amount to be invested under the NSC scheme is ₹100. There isn’t any upper limit for investment under this particular scheme. The tax benefit is restricted to ₹1.5 lakh only. NSC is a good option if you want to save money for your boy child for his future or in case of emergencies.
3. Post Office Recurring Deposit
Just like other banks, the Indian Post Office also offers a recurring deposit account. The Indian Post Office here offers its customers an option to open a 5-year Post Office recurring deposit, i.e., RD account under the Post Office Monthly Saving Scheme. You can monthly invest your hard-earned savings and earn a fixed interest on it. The minor child and the parent can open the joint Post Office recurring deposit account. Documents required for opening the account
4. Kisan Vikas Patra (KVP)
Kisan Vikas Patra (KVP) was first introduced in 1988. For a fairly long time, amongst lower and middle-class people and families, KVP has been a very popular and useful investment scheme. The KVP, though first introduced in 1988, was discontinued in 2011. However, the KVP was re-introduced in 2014 due to constant demands and requests. KVP is a government investment scheme in which a person can invest his/her savings in lump-sum, that too annually. Thereafter the government pays interest at a pre-decided rate. The KVP scheme is generally issued in denominations of ₹1000, ₹5000, ₹10,000 or ₹50,000. The minimum amount to be invested under the KVP scheme is ₹1000. There is no upper limit restriction for investment under this scheme. However, the child should be below 18 years of age. The parent or legal guardian can open the KVP account for their minor male child.
5. Post Office Monthly Income Scheme (POMIS)
Post Office Monthly Income Scheme (POMIS) is one of the safest investment options available in the market because the government of India manages both the investment and returns. It ensures that the investor receives guaranteed monthly payment, which depends on the investment amount made. A minor can also go for Post Office Monthly Income Scheme with the condition that he (the minor) opens a joint MIS account with a legal guardian, i.e., an individual with age more than 18 years. Note: Minors- individuals with a minimum age of 10 years of age but not more than 18 years Under this monthly income scheme, there is no risk of non-return on the capital invested, and it entitles the investor to receive an ensured amount of monthly return. Against a savings account, the return rates are comparatively higher. Also Read: 40 Ways to Save Income Tax Legally in India (2020)
6. Public Provident Fund
A Public Provident Fund is an investment scheme aimed at tax saving. It was introduced for the first time in 1968. Being an investor, you can retain this scheme and invest in this fund for a total time period of 15 years. One of the major benefits of this scheme that makes it popular is that you can claim various income tax benefits for the amounts invested, the ones which are offered by this scheme. According to the PPF rules, only the parent or legal guardian can open a public provident fund in the name of the minor boy child. Thus, these are the Post Office saving schemes for Boy child in India. You can enroll yourself and your children in any of the investment schemes mentioned above, depending on your choices and capabilities. Aid to save money to secure future is just a step away, should you choose to do it.
