PPF, Sukanya Samriddhi Scheme: Best bets for a safe and secure future of your kids

New Delhi: In times of crisis, it is your savings that gets you sailing. If you wisely invest or make savings, it will not only benefit you but your next generation too.

Small Savings Schemes are one of the best options that can be made for your children to make a buffer or cushion for their future.

Small Savings Schemes include Post Office Savings Account, National Savings Monthly Income (Account), National Savings Recurring Deposit, PPF and Sukanya Samriddhi Account.

Here are two investment options for a safe and secure future of your kids

Public Provident Fund

You can open your Public Provident Fund (PPF) account in your own name as well as on behalf of a minor. PPF is a 15-year investment scheme under which an investor enjoys tax exemption at the time of deposit, accrual of interest and withdrawal.

The PPF Scheme, introduced by the National Savings Organization in 1968 was aimed at making small savings a lucrative investment option.

PPF currently offers an interest rate of 7.1 per cent. 

A minimum of Rs 500 and a maximum of Rs 1.5 lakh per annum can be deposited every year in a PPF account at present.  Deposits can be done maximum in 12 transactions. However, you must note that if you deposit more than Rs1.5 lakh in your PPF account per annum, the excess amount will neither earn any interest nor will be eligible for rebate under Income Tax Act.

Sukanya Samriddhi Scheme

Sukanya Samriddhi Scheme account can be opened in the name of a girl child till she attains the age of 10 years. The deposits fetch 7.6 per cent. Account can be opened with a minimum of Rs 250 - and thereafter any amount in multiple of Rs 100- can be deposited. The deposits made to the account, and also the proceeds and maturity amount, would be fully exempted from tax under section 80C of the Income Tax Act.

Maximum Rs 1,50,000 can be deposited in financial year. Deposits can be made up to 14 years from the date of opening of the account. After this period, the account will only earn interest as per applicable rates.

One withdrawal shall be allowed on attaining the age of 18 years of account holder to meet education/marriage expenses at the rate of 50 percent of the balance at the credit of preceding financial year.

The interest rate on Sukanya Samriddhi account is revised every quarter, just like other small savings schemes and PPF.