THE SOONER financial planning starts, the better; this is axiomatic. And if you want to abide by it, and if you have a daughter under 10 years of age, you definitely need to take a look at the Sukanya Samriddhi scheme offered by India Post. It is intended only for girls under the age of 10 and may be opened in their name by a guardian.
However, only one such account can be opened, whether it is in a bank or post office. Further, you can’t open accounts for more than two girls in the family, unless you have twins or triplets.
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Interest rate and investment
The scheme offers a relatively high rate of interest at 7.6 per cent per annum, compounded yearly and can be opened with a minimum balance of just Rs 250. If you want to invest more, you can deposit more in multiples of Rs 50. The maximum deposit you can make in a single financial year is Rs 1.5 lakh.
What is more, there is no limit to the number of deposits you can make in a month or even in a year. However, you need to deposit at least Rs 250 in a financial year, failing which the account will be considered as a defaulted account.
Tenure and taxation
The scheme has a maximum tenure of 15 years from the date of opening and the interest earned is exempt from taxation. Deposits also qualify for deduction under section 80C of Income Tax Act.
In case you’re unable to deposit the mandated minimum of Rs 250 and your account is treated as a defaulted account, it can be revived before completion of 15 years from the date of opening of account by paying minimum Rs 250 and an additional Rs 50 default for each defaulted year.
Closing and Maturity
To prematurely close the account, five years should have elapsed from the date of account opening and need to fulfil the following criteria: death of account holder; life-threatening disease; or death of the guardian who operated the account.
The account will reach maturity should the time duration of the scheme complete and the girl in question reaches 21 years of age, or if she is married after attaining the age of 18.
How to open account
Forms for Post Office Savings Schemes are available at your nearest post office. You can also download them from the official India Post website. Simply navigate to this page and select the scheme. You will see a dropdown menu that contains a link to the page with forms.
These forms need to be filled and submitted at the nearest post office along with the requisite documents.
Why it is good
With more than 1.5 lakh post offices spread across the country, the Post Office Savings Schemes offer great accessibility to anyone aiming to accumulate small savings and if you want your child to have a financially strong future, a savings account in a Post Office Saving Scheme is an option you can’t go wrong with.
