What is Sukanya Samriddhi account scheme? Know all about it

The Sukanya Samriddhi scheme is an insurance scheme introduced by the Government of India.  The scheme aims towards securing the girl child’s future and providing education to them.

How to open an account with Sukanya Samriddhi Scheme

You can open a Sukanya Samriddhi account in any of the authorized branches of commercial banks or in a post office. People belonging to the lower-income wage groups can also opt for the Sukanya Samriddhi scheme as this is a government-backed scheme and will ensure many benefits for your daughter.

You can open an account for your daughter during the time of her birth or when she turns 10 years old. A mandatory deposit of Rs.1000 is required for opening and maintaining the account and Rs.1.5 lakhs should be deposited in a financial year.

One of the positives of this scheme is that it guarantees an equal share to a girl when it comes to the savings and resources of a family. Once your daughter turns 21 years old, she will be able to withdraw 50% of the savings from the Sukanya Samriddhi account.

Benefits of the Sukanya Samriddhi account scheme

The benefits of the Sukanya Samriddhi account scheme are-

• Interest post maturity- One of the biggest benefits of the Sukanya Samriddhi account scheme is that you will receive interest on the money even after your account reaches its maximum maturity. You will continue to get this interest unless you close your account.

• Ensured maturity benefits- When your account reaches its maturity age, you will receive all your money along with all the interest. This acts as an important tool for supporting and empowering women.


• High-interest rate- Sukanya Samriddhi scheme offers an interest rate of 8.6% which when compared to other small savings schemes, is the highest. Every year, the Government of India announces the interest rate for the current financial year and this interest is compounded yearly, which means it will also be credited yearly.

• Lock-in period- The lock-in period is one of the best features of this scheme. Once you turn 21 years old, you can withdraw 50% of your funds from the account. However, if you need to withdraw money before you turn 21, then you can only do so to pursue higher education (only after you turn 18 years old). Keep in mind that you will only be able to operate this account until the time you get married.


• Income tax savings- You will be eligible for tax exemptions if you have Sukanya Samriddhi account, under Section 80C of the Income Tax Act. Exemptions can be availed during the time of withdrawal and on interest.

The Sukanya Samriddhi scheme allows parents to provide education to their daughter and helps countless girls to achieve their dreams. Apart from education, this kind of scheme also helps in regulating child marriage and helps girls in moving in the right direction in their lives.

A summary on loan against LIC policy

Life Insurance Corporation or LIC is the largest insurance company in India and the most popular one amongst people looking to purchase life cover policies. Along with insurance policies, it also provides loans against LIC policy making it the most sought-after insurance company of this country.

Eligibility for a loan against LIC policy

A loan against an LIC policy is one of the easiest and simplest loans to avail in the finance market, currently. In order to avail loan against LIC policy, you need to fulfil the eligibility criteria mentioned below-

• The applicant should be a valid LIC policyholder
• The applicant should be a resident of India
• The applicant must be aged 18 years or above
• At least 3 years of insurance premium should be paid in full by the applicant
• The chosen policy should be an endowment policy with a surrender value. The maximum loan amount cannot cross 90% of the concerned surrender value. In the case of paid-up plans, it will be 85%.

Terms and conditions for a loan against LIC policy

Before going for a loan against LIC policy, you must have a very clear idea about all the terms and conditions.

• The interest will be paid twice a year
• The minimum tenure is 6 months
• In the case of the policyholder’s death, the interest will be calculated until the date of his/ her death
• The loan amount provided by the LIC is up to 90% of the surrender value and 85% in case of paid-up policies
• If you have gone for a long-term loan, then you will have to pay 6 EMIs prior to repaying your loan
• If your policy matures, then your maturity amount could be utilized to pay off your principal amount

Terms and conditions of a loan will differ based on the policy agreement and document

Benefits of a loan against an LIC policy

Some of the benefits of a loan against an LIC policy are the following-

• Applicants with a low credit score can breathe a sigh of relief, as LIC does not check credit scores before giving a loan. So, do not worry if your credit score ratings are not that impressive.
• Since the policyholder is technically borrowing his own money, the process of loan disbursal will be fast.
• A guarantor or third party is not mandatory.
• It provides a substantial amount of financial flexibility since the policyholder will have to pay the loan interest semi-annually.
• Compared to other banks, LIC does not charge any money for prepayment of loans or processing fees. This allows the policyholder to save a lot of money.
• The interest rate is 9% to 11%, which is quite low as compared to the other options in the market. Other banks charge around 16% to 24% interest on loans.
• You can also apply for a loan against LIC policy online, which makes it more of a convenient option for you.

LIC is one of the most reliable and reputable companies in the Indian market. If you choose to take a loan from here, you can rest assured that you will be in safe hands.

What are the rules related to fixed deposit schemes?

Despite the fluctuating rate of interest, a fixed deposit scheme remains a very lucrative option for customers who want guaranteed returns on their investments. A fixed deposit investment comes with different maturity periods, ranging from 7 days to 10 years. Opening a fixed deposit account is not really a difficult thing. However, you must be aware of certain rules that come with this service.

• Joint fixed deposit
If you have a joint fixed deposit account, then the Tax Deducted at Source or TDS will be deducted from the first account holder’s PAN. In addition, the interests are also paid to the first depositor and the tax liability is measured on the first applicant’s name only.

• Interest income clubbing
The interests earned on your fixed deposit account are clubbed across all the branches of the respective bank. This is done for determining the applicability of the TDS and for evaluating the total interest accumulated during a financial year.

• Overdraft/ loan facility
Many banks offer overdrafts/ loan facility up to 90% of the principal deposit. In such cases, the banks charge 1% hiked interest rate compared to the interest rate earned on the respective fixed deposit account.

• Deposit insurance
Deposit insurance is defined as a protective cover that you generally get on your bank deposits. It is offered by a subsidiary of the Reserve Bank of India (RBI) known as Deposit Insurance and Credit Guarantee Corporation (DICGC). This premium is paid by the bank itself and in case it fails to do so, it has to pay a maximum amount of Rs.1 lakh to each depositor for both interest and principal amount.

• TDS factor
The interest imposed on your fixed deposit scheme is taxable. This signifies that your interest income will be added to your income and taxes will be imposed on it, based on additional tax slabs. Generally, banks deduct 10% on the interest earned in case the annual interest income is Rs.10,000. If any of your refunds are due, then you will have to file an income tax return to claim it.

• Accounts for minors
If you want to open an independent account, then you will have to be 10 years or above and should have the ability to read and write. If not, then you will have to open a joint account with your legal guardian. The maximum amount that you can deposit in your account should not be more than Rs.1,00,000. There are no limitations when it comes to minors aged above 14 years.

Fixed deposit investment can go a long way in helping you save money not just for the present but the future too. Since you are investing your hard-earned money in this account, it is always ensured that you get sufficient and lucrative returns for that. Therefore, do not shy away from opening a fixed deposit account today. In case you have any doubts or questions, you can call on your bank’s helpline number and consult them.

Know all about Atal Pension Yojana

If you are someone who belongs to the informal or unorganized sector, then the Atal Pension Yojana is a godsend for you. Introduced by the Indian government in 2015, this pension-based scheme aims towards encouraging the habit of saving for retirement amongst daily wageworkers. In addition, not just daily wageworkers, people who have private sector jobs can also apply and invest in this scheme.

Features of the Atal Pension Yojana

In order to have a better understanding of APY, you need to be aware of the important features of the scheme, which are-

• Co-contribution by the Government of India
In order to encourage more people to invest in the Atal Pension Yojana, the government will also contribute for the duration of 5 years i.e. from 2015 to 2020. All these contributions will be sent to the accounts activated between June 1 to December 31, 2015. All the respective customers must keep in mind that they are not covered under the Statutory Social Security Schemes and must not be income taxpayers. In order to get the government’s investment, you need to invest regularly every month during the entire course of a year. It is only then that the Government of India will put in their 50% of their monthly contribution in your account.

• Subscriber payment/enrolment
If you have a valid bank account, then you can utilize the auto-debit service for making payments to your APY account on a monthly, quarterly and half-yearly basis. However, remember to make all your payments on time, otherwise, you might be subjected to penalties. Moreover, if you do not make monthly investments, then the government can close your account and penalize you.

• The investment made by the customer
If you start investing in your APY account from the age of 18 years and pay Rs.42 every month, then you will be getting Rs.1000 as your pension amount after you retire. The monthly investment will vary from person to person, as it will depend on your duration and when you joined the Atal Pension Yojana scheme. If you have a debit card, then you can use the auto-debit feature for making your monthly payments. In case you decline the payment, then you have the freedom to re-enter the scheme by paying the due principal amount for the exact tenure along with the rate of interest.

Eligibility criteria for the Atal Pension Yojana scheme

In order to invest in the Atal Pension Yojana scheme, you need to fulfil their eligibility criteria. The Atal Pension Yojana eligibility criteria are as follows-
• People aged between 18 years to 40 years only can apply and invest in this scheme
• The government also invests in this scheme but only for a few specific customers
• Only customers who have an active and valid savings account can open an APY account
• It is mandatory for you to have to a valid mobile number which you will need to register during the time of application

The Atal Pension Yojana serves a very useful cause that will not just help you inculcate the habit of saving but will also make sure that you get to spend your sunset years and retirement with peace of mind.

How to invest in a National Pension Scheme?

The National Pension Scheme is a scheme in which employers and employees both contribute, and the entire amount is paid to the employee after he retires. This scheme was introduced to facilitate systematic savings amongst employees of state and central governments and among common citizens. The NPS was put in to practice on 1st January 2004 with the intent of revolutionizing the pension scenario in India.

How does the National Pension Scheme work?

Under the National Pension Scheme, a customer can invest in several different pensions’ funds. Generally, investment of these funds is done by the Pension Fund Regulatory and Development Authority, and is handled by professional fund managers. You get an option to switch between various pension funds but you have to continue with your funds for at least a year before you switch from one to the other.

If you want to open NPS account online, you will have to start with two accounts- Tier-I and Tier-II. You will have to open a Tier-I account, in order to make yourself eligible for starting the Tier-II account. The difference between the two accounts is that the Tier-I account does not give you the freedom to withdraw money whenever you want. You can only do so, once you reach 60 years of age. Whereas when it comes to the Tier-II account, you can withdraw money whenever you like.

What documents are required for investing in the National Pension Scheme?

You will need to submit the following documents if you are planning to invest in the National Pension Scheme-

- Identity Proof such as Aadhar Card, PAN card, Ration card with a photograph, Passport, Water Bill, Bank Passbook, Electricity Bill and Job Card provided by NREGA. Anyone of these documents will suffice.
- Address Proof such as Ration Card with a photograph, Passport, Bank Passbook, Aadhar Card, PAN Card, Photo Identity Card etc.

How much investment do you have to make?

You will have to invest in the NPS scheme in the following way-

- You will have to invest at least Rs.6000 annually and the minimum one-time contribution is Rs.500. However, keep in mind that these figures are only applicable for Tier-I accounts.
- If you have a Tier-II account, you will have to invest at least Rs.2000 annually and Rs.250 one time.
All these funds can be contributed to, or invested in the form of cash or cheques.

The National Pension Scheme is one of the most favourable ways of saving money for your retirement. It encourages and fosters the habit of savings amongst people with the intent of showing them the value of having a retirement fund, and how it can tremendously help you in your old age.

What are different types of debit cards available in the market?

Debit cards have become a necessity for everyone these days; you can find almost everyone carrying a debit card with them. Debit cards are a convenient mode of payment. If you have a debit card with you, you will not have to carry a whole lot of cash for transactions and expenses and it will prevent you from overspending due to the limits imposed on debit cards. However, if you are not quite sure of the different types of debit cards available in the market, and how they work, then read on.

1. MasterCard Debit Cards
MasterCard is one of the biggest and widely used debit cards in the world and since they are very popular, almost all the major banks provide their customers with one. Because of its vast reach, you can use MasterCard to withdraw money from any bank in the world and not just India. You can also use this ATM card to shop from any foreign online store, which you cannot do with any and every debit card. Additionally, MasterCard boasts of a very impressive 24/7 customer service and resolves issues rapidly, and is also known for their lucrative customer benefits and rewards program.

2. Visa Debit Cards
Visa debit cards are the most popular form of ATM cards in India. Almost everyone has one and a majority of Indian banks have a tie-up with it. There are several reasons behind their popularity and they are as follows:
- The Visa Global Customer Assistance Service provides a 24-hour customer service, which makes it easier for customers to reach out them in case of any emergencies or doubts.
- The Verified by Visa (VBV) service ensures increased security when it comes to online transactions so that you can shop online without any tension and worries.
- The 24 Hour Concierge Service feature contributes to making things like hotel reservations, purchasing flight tickets, flight reservations, restaurant reservations etc. a lot easier.
- Their Visa ATM network is also very vast and provides a wide coverage.

3. Maestro Debit Cards
Maestro Debit Cards serve as the choice of over 1.5 Crore POS terminals in India except for a few. The biggest reasons for their popularity are their low transaction costs and the fact that they are fast and flexible. Maestro Debit Cards are protected by a very advanced security system, which makes them a very safe option for users. This card can well be used as an international debit card, in case you are travelling abroad. Due to all these reasons, it is the preferred choice of ATM card for the majority of banks out there.

4. RuPay Debit Cards
Ever since RBI has introduced RuPay in 2012, it has rapidly gained popularity amongst the masses. Many people, due to easy availability in rural areas and low transaction costs, consider using RuPay. It is also believed that this debit card is more flexible than its competitors are. In addition, it allows safe online transactions and secured payment at POS terminals.

3 things to consider before opening a demat account

A demat account stands for a dematerialized account and is the equity equivalent of your bank account. Your bank account is responsible for keeping and holding on to your savings, similarly, a demat account is responsible for holding your shares. However, before opening a demat account you need to take a few important factors into consideration, which are-

1. The reliability of your demat account platform
Almost all brokers these days provide you with access to your respective demat account through a single platform. Your credits and debits to your bank account and demat account along with the funding of your bank account take place very smoothly. Make sure that your demat services have a very strong technology platform which will ensure that the entire process takes place without a hitch. Generally, when you sell your shares, the demat trading account is debited the very next day and if you buy shares, then the account is credited within 2 days from the date of the transaction.

2. Smooth custody, broking, and banking
If your broker is a bank then all the three crucial activities of custody, broking and banking can function seamlessly. In case your custody and broking are impeccable and if you transfer money through UPI, NEFT, RTGS or any other authorized payment getaways, then you will not face any kind of hassles. However, keep in mind that many brokers charge a nominal amount for using an authorized payment getaway, so it is a better option for you to use UPI/ RTGS/ NEFT. Hence, the smoother these three activities work fewer chances are there for you to experience administrative issues.

3. Trading and demand are with the same broker
Before opening a demat account, make sure that your broker has a legitimate demat license so that he can open a trading-cum-demat account for you in one go. Next, you need to provide him with your debit instruction slip (DIS) on time, once you sell off your shares. In case you do not give him the DIS on time, it can lead to losses and bad deliveries. That is why it is better when your depository participant (DP) and broker are the same since it makes the entire process easier and more convenient. You can just go for online demat services and trading, and provide your broker with a power of attorney who will credit the account during purchase and debit at the time of sale. This will save you from a lot of hassles and extra responsibilities.

Selling shares can bring in a lot of money in your pocket but you will have to be very careful about handling and saving them. Along with your savings account, having demat trading account is always considered a smart decision. It always ensures that your shares are in a safe and secure place and which you can utilize whenever you deem fit.