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Rakshabandhan symbolizes the promise of unwavering affection, trust and protection between brothers and sisters. Often on this festival, brothers gift clothes, sweets, chocolates or some cash to their sisters. However, in these times of inflation, the gift of financial security and self-reliance can prove to be much more meaningful and life-changing than chocolates or momentary gifts. If you want to truly gift ‘financial freedom’ to your sister this Rakshabandhan, then India Post’s government savings schemes with safe and guaranteed returns are the best option. Investment in these schemes remains completely risk-free as they are backed by the Government of India.
1. Sukanya Samriddhi Yojana (SSY): Highest interest of 8.2%
If your sister is below 10 years of age, Sukanya Samriddhi Yojana is the most unmatched financial gift for her bright future. Currently the highest interest rate of 8.2% per annum is being given in this scheme. This account can be opened with a minimum initial investment of just Rs 250 and a maximum of Rs 1.5 lakh can be deposited in a financial year.
This scheme comes under the ambit of ‘Exempt-Exempt-Exempt’ (EEE) tax exemption, which means that the amount invested, the annual interest received and the entire fund received on maturity after 21 years is completely tax-free. This amount will prove to be a milestone in achieving the sister’s higher education and career goals.
2. Public Provident Fund (PPF): Long Term Wealth and Security
Public Provident Fund (PPF) is a powerful medium for secure and long-term wealth creation for elder sisters. Guaranteed annual interest of 7.1% is available on this government scheme. The tenure of PPF account is 15 years, which can be further extended in blocks of 5 years.
A minimum of Rs 500 to a maximum of Rs 1.5 lakh can be invested in this account annually. PPF also comes under the EEE category, due to which the sister gets the tremendous benefit of compound interest in the long run and gets a huge tax-free fund on maturity.
3. Post Office Monthly Income Scheme (POMIS): Fixed pocket money every month
If you want your sister to get a fixed income every month for her personal needs or educational expenses, then Post Office Monthly Income Scheme (MIS) is an ideal gift. Currently, an annual interest of 7.4% is being given in this scheme, which is paid directly into the savings account on monthly basis.
The maturity period of this scheme is 5 years. In this, a maximum lump sum amount of up to Rs 9 lakh can be deposited under single account and up to Rs 15 lakh under joint account. After depositing the lump sum amount, the sister gets a guaranteed fixed income every month for 5 years.
4. 5-Year Time Deposit (POTD): A better option than bank FD
The post office time deposit (TD) scheme works similar to a bank fixed deposit (FD), but offers better security with a government guarantee. Time deposit accounts can be opened in the post office for a period of 1, 2, 3 and 5 years. Currently, 5-year time deposit is offering an attractive annual interest of 7.5%.
Investing in a 5-year FD also gives the benefit of tax exemption up to Rs 1.5 lakh under Section 80C of the Income Tax Act. It is suitable for those sisters who want to preserve lump sum capital for medium term.
5. National Savings Certificate (NSC): Guaranteed wealth growth
National Savings Certificate (NSC) is a popular small savings instrument with a lock-in period of 5 years. An annual interest of 7.7% is being given on this, which is calculated on compounded basis annually.
The biggest feature of NSC is that its interest keeps getting credited in the account and for the first 4 years, that interest is considered reinvested and eligible for tax deduction under Section 80C. After 5 years, the sister receives the entire principal amount and interest in lump sum.
6. 5-Year Recurring Deposit (RD): Small Savings to Big Fund
If you cannot invest a large lump sum, then you can start regular monthly savings in your sister’s name through Post Office 5-Year Recurring Deposit (RD). This scheme is offering an annual interest of 6.7%, which is compounded on a quarterly basis.
This account can be started with just Rs 100 per month. The habit of financial discipline can be inculcated in the sister by depositing a fixed amount every month, which will turn into a huge capital with interest after 5 years.
7. Kisan Vikas Patra (KVP): Money will be doubled directly
Kisan Vikas Patra (KVP) is a great scheme for those who want to double their deposits without any market risk. Currently, KVP is offering an annual interest rate of 7.5%.
The amount deposited under this scheme officially doubles in 115 months (9 years and 7 months). There is no maximum limit for investment in this scheme. It provides a strong foundation for long-term financial goals, such as starting your own business or buying a house in the future.
Method of giving gift on Rakhi and necessary documents
The process of opening an account in these post office schemes is very simple and accessible. You can directly open an account in your sister’s name by going to the nearest post office. If the sister is a minor, the account can be opened as a guardian.
It requires only basic documents like Aadhar card, PAN card, passport size photograph and residence certificate. In the digital age, these post office accounts can also be tracked and managed online through the India Post Payments Bank (IPPB) app. This Rakshabandhan, go beyond the traditional gifts and start a secure savings account in your sister’s name and give her the financial support of a lifetime.