Ways to save through Pon Magan Savings Scheme for Boys
Ways to save through Pon Magan Savings Scheme for Boys In 2015, the central government introduced a wealth savings scheme for girl children. Then, even those with male children approached the post offices asking for such a scheme for their child.
Therefore, it was suggested that under the existing Public Provident Fund scheme PPF, savings can be started under the scheme for those who are defined as minors and below the age of 18 years.
Therefore, those who have a male child also join this scheme as a small savings for their child’s future and education.
Who can join this program? How much interest? What are the maturity and other benefits? The scheme has been explained by the postal authorities. They are as follows.
How much can you save?
In this scheme you can save from a minimum of Rs.500 to a maximum of Rs.1,50,000 in every financial year.
How much interest?
The scheme currently offers 7.1% interest. However, it is revised once in every financial quarter i.e. every 3 months.
The interest rates changed by the Union Finance Ministry can be known from the post offices or from the official website of India Post (Post Office Saving Schemes (indiapost.gov.in).
Officials of Postal Savings Bank have informed that for the last 10 years interest has been paid at not less than 7%. The current rate of interest in this scheme is 1.1% lower than Selvamalam savings scheme.
How will they calculate?
For example if we pay Rs.1,000 per month, we will have paid Rs.1,80,000 in 15 years. You will get Rs.1,35,578 as interest. A maturity amount of Rs.3,15,572 will be available in 15 years.
How much will you pay and how much will you get on maturity with Calculator Post Info app?
When to pay?
Payment is to be made at least once in a financial year. For example a person who has paid on 1st April in this financial year will have to pay the next installment by 31st March of the next financial year. Failure to do so will incur a penalty.
What is the duration of the project?
This plan has up to 15 years of repayments. After that, every 5 years with maturity and renewal without withdrawing the savings, the interest accrued for that 5 year period will be added.
How to join?
You can open this account by visiting the post office and filling the applications in person. Or you have the option to open and close an account online through the post office’s internet banking facility.
Also, you can pay online through internet banking or India Post Payment Bank app.
Who is the program for?
Although the Ponmagan Savings Scheme is an existing PPF scheme, anyone from children to adults can join this scheme.
Any economic status is eligible to join this scheme. Officials have informed that there is no age limit or educational qualification.
But should have Indian citizenship. The scheme is not applicable to Non-Resident Indians (NRIs) and Foreign Citizens.
Who can pay?
A parent, guardian or anyone can make payment on behalf of a child under this scheme.
How about tax relief?
Income Tax Exemption Under 80C limit, tax exemption is available upto a maximum of Rs.1,50,000 per financial year in the category of savings and investment. The same tax deduction applies not only to children but also to adults joining the scheme.
What documents are required?
Copies of child’s birth certificate, parent’s Aadhaar, PAN, etc., photo will be asked. Nominee name details required.
Type of interest?
It will be calculated under compound interest. That is, the interest earned on the money we have paid is added to the account as investment, and the interest will come as compound interest in the next financial year. It will continue to be carried forward from year to year.
Can I withdraw money?
Savings account can be withdrawn after 7 years from opening. But only 50% of the money available at the end of the 4th financial year can be withdrawn.
Is there loan facility?
An added advantage is that there is a loan facility under this scheme. For that the 3rd financial year should have started. Only 25% of the amount at the end of the 2nd financial year can be borrowed.
How much is the interest on the loan?
If the loan is repaid before 36 months, only 1 percent will be charged as interest. 6 percent interest may come on top of that.
A loan can be taken only once in a financial year and in case of taking a second loan the first loan must be fully repaid.
However, it is worth noting that the full saving benefit is available only if the payment is made without any temptation of taking money in between and buying on loan.
What if death occurs?
If the child’s parent or guardian dies during the period of payment, the child will receive the payment if the child has attained the age of 18 years. If not, his guardian may receive the money.
