Prime Minister Schemes For Boy Child

What are the Best Post Office Savings Schemes for a Boy Child?

Given inflation in nearly every sector, when it comes to securing the financial future of a boy child, financial planning takes on a special significance. It provides a foundation for educational pursuits, career aspirations, and eventual financial independence. 

With the government introducing better savings options, it is important that you understand the best ones that you can use for your child’s needs. By doing so, you can make informed decisions about which schemes align best with your goals and resources. 

Below is a list of top 6 post office savings scheme for boy child: 

• Public Provident Fund (PPF)

• Post Office Monthly Income Scheme (POMIS)

• Kisan Vikas Patra (KSV)

• National Savings Certificate (NSC)

• Ponmagan Podhuvaippu Nidhi Scheme

• Post Office Recurring Deposit (RD)

Best Government-Backed Savings Schemes For Boy Child In India

1. Public Provident Fund (PPF)

   The Public Provident Fund (PPF) is a long-term savings-cum-investment scheme for boy child backed by the Government of India. It is a popular tax-saving investment option that offers attractive returns and a number of other benefits.

   Eligibility:

   • All Indian residents are eligible to open a PPF account.

   • Minors can open a PPF account with the help of a guardian.

   • Non-Resident Indians (NRIs) are not eligible to open a PPF account.

   Key information about PPF 

   Information	Details
   Tenure	15 years
   Current Interest Rate	7.1% p.a
   Minimum Investment	₹500
   Maximum Investment	₹1.5 lakh per annum
   Opening Balance	₹100 a month
   Frequency of Deposit	Deposits can be made in lump sum or in 12 installments
   Mode of Deposit	Deposits can be made in cash, through cheque, or online transfer
   Mode of Holding	Individual only
   Risk Factor	Minimal
   Tax Benefit	Interest and maturity amounts are tax-free u/s 80C
   Partial withdrawal	Partial withdrawals are allowed from the 7th financial year onwards

2. Post Office Monthly Income Scheme (POMIS)

   POMIS is a small savings scheme for the boy child offered by the Indian government through the Post Office Department. It is a low-risk investment option that provides a guaranteed monthly income to investors. 

   Key Information about POMIS

   Information	Details
   Eligibility	Indian citizens of all ages are eligible to open a POMIS account
   Current Interest Rate	7.40% per annum, payable monthly
   Minimum Investment Amount	₹1,500
   Maximum Investment Amount	₹9 lakh for a single account ₹15 lakh for a joint account
   Minimum Opening Balance	₹1,500
   Frequency of Deposit	Lump Sum or installments (minimum deposit amount for each installment is ₹1,500)
   Mode of Deposit	Cash or cheque
   Partial Withdrawal	Allowed after 1 year, up to a maximum of 50% of the balance in the account. Premature closure penalty of 1% of the deposit amount is charged on all partial withdrawals
   Tax Benefit	Interest income is taxable as per the income tax slab of the investor. No TDS on the interest income

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3. Kisan Vikas Patra (KSV)

    Among Prime Minister Schemes for Boy Child, the Kisan Vikas Patra (KVP) is an important small savings scheme. It was introduced by the Indian government in 1988 to encourage long-term financial discipline. KVP certificates are issued by designated branches of the Indian Post Office and select public sector banks.
   Key Information about Kisan Vikas Patra

   Feature	Details
   Eligibility	Any individual, resident or non-resident Indian, can invest in KVP. There is no minimum age limit to invest in KVP. However, minor accounts can be opened only in the name of a guardian.
   Current Interest Rate	7.5% per annum
   Minimum Investment Amount	Rs. 1,000
   Maximum Investment Amount	No upper limit
   Minimum Opening Balance	Rs. 1,000
   Frequency of Deposit	One-time investment
   Mode of Deposit	Cash, cheque, or demand draft
   Partial Withdrawal	Not allowed before maturity
   Tax Benefit	Interest earned is taxable, but the maturity amount is tax-free

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4. National Savings Certificate (NSC)

   National Savings Certificate (NSC) is a small savings scheme offered by the Government of India for the boy child. NSC is a safe and low-risk investment option and is suitable for investors of all risk appetites.

   Key Information about NSC:

   Feature	Details
   Eligibility	Indian residents of all ages, including minors
   Current Interest Rate	7.7% (as of July 2023)
   Minimum Investment Amount	Rs. 100
   Maximum Investment Amount	No limit
   Minimum Opening Balance	Rs. 100
   Frequency of Deposit	One-time investment
   Mode of Deposit	Cash or cheque at any post office branch
   Partial Withdrawal	Not allowed
   Tax Benefit	Investment in NSC is eligible for deduction under Section 80C of the Income Tax Act, 1961, up to a maximum of Rs. 1.5 lakh per annum. Interest earned on NSC is taxable as per the investor's income tax slab.

5. Ponmagan Podhuvaippu Nidhi Scheme

   The Ponmagan Podhuvaippu Nidhi Scheme is a social welfare scheme launched by the Government of Tamil Nadu in 2015. It is a savings scheme aimed at providing financial assistance to boy child belonging to economically weaker sections of the society. The scheme is operated through the Post Office.

   Key Information about Ponmagan Podhuvaippu Nidhi Scheme for Boy Child:

   Feature	Details
   Eligibility	Male child below 10 years of age
   Current Interest Rate	9.70% p.a.
   Minimum Investment Amount	₹100
   Maximum Investment Amount	₹5 lakhs per year
   Minimum Opening Balance	₹100
   Frequency of Deposit	Monthly, quarterly, half-yearly, or yearly
   Mode of Deposit	Cash or cheque
   Partial Withdrawal	Allowed after 5 years
   Tax Benefit	Deposits up to Rs. 1.5 lakhs per year are eligible for tax deduction under Section 80C of the Income Tax Act, 1961.

6. Post Office Recurring Deposit (RD)

   The Post Office Recurring Deposit (RD) is a savings scheme that allows individuals to save a fixed amount of money every month for a predefined period for the boy child. The interest on the deposits is compounded quarterly.

   Key Information about Post Office Recurring Deposit Scheme: 

   Feature	Details
   Eligibility	Indian citizens above 10 years of age can open a Post Office RD account.
   Current Interest Rate	6.7% p.a., compounded quarterly
   Minimum Investment Amount	Rs. 100
   Maximum Investment Amount	No maximum limit
   Minimum Opening Balance	Rs. 100
   Frequency of Deposit	Monthly
   Mode of Deposit	Cash, cheque, or electronic transfer
   Partial Withdrawal	Allowed after 6 months, subject to a penalty of 1% of the amount withdrawn.
   Tax Benefit	Interest earned on this Prime Minister Schemes for Boy Child is up to Rs. 10,000 in a financial year is exempt from tax under Section 80TTA of the Income Tax Act, 1961.

What are the Benefits of Prime Minister Schemes for Boy Child?

Here are the benefits of Prime Minister Schemes for Boy Child:

• Easy investment process, requires minimal paperwork.

• Post offices Prime Minister Schemes for Boy Child are prevalent across rural and urban areas.

• Long-term investment options (up to 15 years).

• Government-backed, providing security.

• Range from 4% to 8%, rivaling banks.

• Varied tax implications, investment horizons, and expected returns.

• Deposits qualify for tax deductions under Section 80C of the Income Tax Act. 

• The interest earned is tax-free. 

• Loans can be availed after the expiry of the first 5 years of opening the account. This varies across different schemes. 

• The schemes allow you to make premature withdrawals in case you are in urgent need of liquidity.

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Conclusion

In brief, by leveraging the strengths of post office saving schemes, Prime Minister Schemes for Boy Child offer a straightforward and accessible avenue for parents and guardians to secure their child's financial future. These schemes enable families can take proactive steps towards ensuring a stable and prosperous future for their boy child.