Sukanya Samriddhi Yojana in detail

Sukanya Samriddhi Yojana (SSY) was launched in 2015 for the girl child.  It is another small savings scheme like PPF from the government of India and it will be administered through post office and banks.

The maturity amount and the total interest paid on the scheme will be tax free under EEE like in PPF. 

It is a long term debt investment which can help the girl child for her higher education and marriage.

Under this scheme, the account can be opened for a girl child in the age group of 0 -10.

The account can be opened by parents or legal guardian.

The yearly investment is flexible and you can pay any amount between 250 – 1, 50,000 as you like in lumpsum or in installments. If you don’t invest the minimum amount of 250 in a year, there will be a penalty of Rs. 50/- to continue the account. You can invest money for 15 years from the date of opening.

The account will mature after 21 years from the date of opening of the account. In case of early marriage, the account will be closed on marriage after age 18.

There is early withdrawal option in Sukanya Samridhi Account. 50% of the accumulation can be withdrawn after age 18.  This can help funding the child’s higher education.

The interest rate for this scheme will be declared by government every quarter. The interest rate is 7.6% as on date.  Interest will be compounded annually.

The investment upto 1.5 lakhs in a year will qualify for tax deduction under Section 80C of the Income Tax Act. But, more attractive is the taxation of this scheme on maturity. The maturity amount including interest is totally tax free on withdrawal.

Eligibility: A girl child (Indian Resident) between the age of 0-10 years is eligible for Sukanya Samriddhi Yojana.

Minimum investment amount: An account can be opened by depositing Rs 250 with the required documents (Note: earlier, the minimum amount was Rs. 1000). The minimum amount that can be deposited in a Sukanya Samriddhi Scheme is Rs. 250 per annum. The maximum limit is Rs. 1.5 Lakhs per annum for an account.

Maturity Period: The maturity period of Sukanya Samriddhi Yojana is 21 years. For example: If you open an account when the girl child is 8 years old, the account will mature when she will turn 29.

Withdrawal Rules: You can withdraw money from Sukanya Samriddhi account when the girl child turns 18 years old. There are 2 rules for withdrawal:

  • Partial Withdrawal – Maximum 50% of the balance (of the preceding year) can be withdrawn for the higher education of girl child.
  • Complete Withdrawal – After the completion of 21 years from date of opening the account or on marriage of the girl child, whichever is earlier. However, the account holder needs to provide an affidavit stating that she is not below the age of 18 at the time of closing the account.

Closing the account: In the unfortunate event of death of the account holder, the scheme can be closed immediately by producing the death certificate.

The Sukanya Samriddhi account can be closed after 5 years. The pre-closure request can be made after 5 years of opening the account. This request is only considered under extreme compassionate grounds like life threatening disease.

Tax implications: The interest on Sukanya Samriddhi account is not taxable. The scheme comes under EEE category

  • Exempt at the time of investment
  • Exempt at the time of accumulation
  • Exempt at the time of withdrawal.

Documents for Opening SSY Account:

  • Account Opening Form
  • Birth Certificate of Girl Child
  • Address Proof of Parents/Guardian
  • ID proof of guardian/parents

Benefits of SSY Scheme:

  • Interest rates are higher than most of the debt-oriented schemes like bank deposit and FDs / PPF.
  • Since it’s a debt scheme by Govt. of India, chances of defaults are Nil.
  • Tax benefits under Section 80C
  • You can invest any amount between 250 – 1.5 Lakhs per year as per your cash position.
  • Scheme comes under EEE as explained above. This is the most attractiveness of this scheme.

Drawbacks:

  • Lock in period is high in this scheme. You can not withdraw money till the girl child is 18 years old.
  • You can withdraw only 50% at the time of higher education.
  • Interest rates may higher today but may not be in the same range for long periods.
  • Maturity proceeds would be in the hands of Girl Child.

What can you do?

It is not advisable to create the entire amount for your daughter’s needs by investing in this scheme. If your daughter’s higher education is 15 years away, you can earn better returns by investing in equities through mutual funds. But you should not invest the entire amount in equities.

For the debt portion, you can consider this scheme. When you are nearing the goals like higher education and marriage, you can reduce your allocation towards equity and can increase it towards debt. This account can be useful for this. You can withdraw 50% accumulation after age 18 for her higher education and the balance amount can be withdrawn for her marriage.

Along with an SIP in equity funds, this can be a suitable investment scheme for your daughter.

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Let’s start a Positive #MeToo for Investing

Have you invested your Savings? #MeToo

Have you invested for the Long Term? #MeToo

Have you done your Asset Allocation? #MeToo

Have you invested in Equities? #MeToo

Have you invested via Mutual Funds? #MeToo

Have you started an SIP? #MeToo

Finally
Have you consulted a Financial Planner for all of this? #MeToo

And if any of the above replies are in the negative

God will help you!

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#theequitylearners

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Smart Money Management for your kids

The more time you give to your children, the better they grow;

The more time you give to your Money, the better they grow.

  • Open a Savings A/c on your child’s name. Guide him how to save money he receives on birthday or any other occasion in his savings account.
  • Make him understand the difference between Saving & Investing.
  • Don’t take your child along with you in ATM to withdraw money as they might mistaken that they will get money whenever required.
  • Make them understand the educational expenses you are paying on monthly or early basis.
  • Ask them to write / maintain the monthly household expenses book.
  • Invite them to hear the financial discussions, they cannot express their views but can logically think on it.
  • Make them understand why the loans has been taken for Home, Car or Education, the breakup of EMI’s, Prinicipal & Interest.
  • Visit an orphanage & donate some with your child through which he will understand the things he uses are not available to them.
  • You have started the Journey of becoming a Smart Investor, its your duty to train your child to become a smart investor by teaching him about financial literacy, products like mutual funds, stocks etc.

Financial Literacy is need of the hour, moreover staying happy in any situation & changing the view towards Money is required.

Happy Children’s Day

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Do you Really want to get Rich / Wealthy?

Ask Yourself – “Do you Really want to get rich / wealthy”?

Is it on your priority list OR are you happy going through life living salary to salary and retiring at 58 and then wondering how to spend the next 20/30/40 years of your life?

Not many people are cut out to create wealth. In fact most people do not.

How much time do you spend each day thinking about it?

What?

You don’t even think about financial independence once a day and you expect to get there in your 40s?

Forget about it.

You think you CANNOT resist spending Rs. 200,000 on that bike that you are dreaming off or on a car costing Rs. 12,00,000 when you have not thought about Investing for Financial Independence?

Forget financial independence in your 40s, after all you do not want it as badly as you want your car or house, do you?

Likewise, what are you willing to sacrifice to build your Retirement corpus? It takes some sacrifice, and the longer you delay that sacrifice, the larger the sacrifice becomes.

If you are 33 yrs, and not yet set up any SIP for retirement, and all your money is in Bank FD, Real Estate, ULIPS, LIC etc, kiss your early retirement / wealth creation dreams a Happy Goodbye.

Cost of Delay:-

The longer you delay the lesser the chances of you being able to create any wealth.

The longer you delay, the lesser retirement corpus.

The longer you delay, the longer you have to work.

The longer you delay, higher chance of you working forcefully even if your health doesn’t support.

The longer you delay, the sooner your happy retirement dreams will fade away.

#theequitylearners

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P.S- Interested people can contact us for Financial Independence Program.

Muhurat Stock Investment Tips

A conversation between a Client & Financial Planner.

Mahesh : Happy Diwali Dr. KD. I checked today’s Money control. It says..next diwali..45k and sent top 15 stocks to invest.

Dr. KD : Happy Diwali to you and your family.

Do you know, last year prediction from money control. Check following details.

Mahesh : Oh…

Dr. KD : Even they recommended top 10 stocks.

COMPANY/PAL/TARGET/ACTUAL

Note: PAL – Price at Last diwali
Target – Given by moneycontrol
Actual – today’s price

BATA/ 800/925/ 1022
CYIENT/520/645/619
LNT/1224/1425/1354
MANNAPU FIN/100/147/84
MAHINDRA HOLID/350/520/221
DHFL/620/650/228
KARUR V B/110/180/79
ASIAN GRAN/490/570/180
BLUE STAR/675/850/576
TV TODAY/360/402/375

Mahesh : Oh.. Except one or two, all are down. Then why do they predict?

Dr. KD : Because it is their business and they earn from it. We should believe in our financial advisor not the online companies.

Mahesh : Yes Dr. KD, There is no short cut to become wealthy. We have to give time.

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http://www.moneycontrol.com/news/business/markets/sensex-likely-to-top-45k-by-diwali-2019-icici-bank-maruti-among-karvys-muhurat-picks-3130471.html/amp

Money Lessons for your Kid Part – 3

Changing times, social media like facebook, instagram, whatsapp has impression on kids.

Learn how to teach them money lessons.

Money lesson for your kid aged 15-16:

Explain loans & credit reports before the bad habits of his peers get ingrained in him. Ensure he understands the importance of high credit score to eventually get the loans for things he wants, e.g. a house or a car in future. Make him understand how loans work — principal, interest, repayment, good loans Vs bad loans, tax benefits (80C, 80E etc), Insurance cover for loans etc.

Money lesson for your kid aged 17-18:

Give them more leeway in Bank A/c where they can store the money & write cheques. Don’t add money to this account. They should fund it from their savings. Have them write cheques for costs like student activity fees, and sit down with them monthly to balance account. Also, discuss topics like work-life balance, financial freedom etc.

Money is great, but it’s worthless if you’re not leading a balanced life.

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Money Lessons for your Kid Part – 2

Why Money Lessons are important for your kid in changing markets.

Money lesson for your kid aged 11:

Keep pointing out advertisements of different brands to your kid. Explain how they try to manipulate consumer’s emotions by making their products look cool through paid advertisements.

Money lesson for your kid aged 12:

While shopping, point out a cheaply-made product & a higher quality alternative, explain the difference (the feel of fabric, brand etc.) and how to choose between the two. If you buy eco-friendly product, explain why you’re willing to spend more on it. She should learn smart purchases rather than just the cheapest.

Money lesson for your kid aged 13:

Get in the habit of clarifying financial concepts. Tell your kid, ‘I invest in Mutual funds, Bonds, Stock Market etc to make money grow’. Show the ups & downs of Nifty (just call it ‘the market’) and explain why people invest in it.

Money lesson for your kid aged 14:

Make your teen work for extra allowance, e.g. chopping vegetables etc. Let her feel the power & freedom of making & spending money. E.g. if she wants a Rs 1200 jacket, explain that she’d have to babysit for 12 hours at Rs 100 per hour to afford it. Convey that she has to work in order to get what she wants.

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#kaustubhdeole

Money Lessons for your Kid

Money lesson for your kid aged 7:

Talk to your child about career & money. Try to instill positive feelings towards work. Explain what you do at work, why you chose that field and why you like it. Convey that people should try to choose the jobs based on what they enjoy.

Money lesson for your kid aged 8:

Explain that some money that you earn have to be spent on the bills. Let your child sit next to you while you make the payments. Some amounts like rent or EMI — will be too big for her, but you can ask her to match the balances. Focus on Savings too.

Money lesson for your kid aged 9:

Open a Minor Savings A/c. Don’t let him withdraw money at will — if he wants to save for a bike, he should talk to you first. Tell him that he will have to make regular deposits to the bank, monthly or quarterly.

Money lesson for your kid aged 10:

Inform about different kinds of cards & Bank A/Cs. Take your cards out of your wallet and explain which one is for debit, which is for credit, their differences, and the importance of always paying back dues in full & on time.

#goodeducation

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How to Be a Well Informed Investor

प्रतिकात्मक रुपातील रावणाचे दहन करण्याची प्रथा अाज पार पाङली जाते. अापल्यातील दोष, अवगुण हेच अापल्यातील रावण असतात.

चला तर…पुढील १० गोष्टी अंमलात अाणु या व अापल्यात जर खालील रावणरुपी दोष असतील, तर त्याचा नाश करुन एक Well informed investor होण्यासाठी प्रयत्न करु या.

१) अापल्या गुंतवणुकीबद्दल तटस्थ राहायला शिका. त्याच्याशी भावनिक नाते जोङु नका.

२) अार्थिक सल्लागारावर सतत अविश्वास दाखवु नका. त्यामुळे तुमच्या बाबतीत गुंतवणुकीचा निर्णय घेताना तो चुकु शकतो. तुमची जोखिम घेण्याची क्षमता कमी अाहे अस समजुन तो कमी जोखिम असलेली योजना तुमच्यासाठी निवङु शकतो. परिणामी तुमची पाञता असतानाही परतावा कमी मिळु शकतो.

३) बाजारात पङझङ झाल्यावर संयम न दाखवता अस्वस्थ होत असाल, तर तुम्ही अजुन परीपुर्ण गुंतवणुकदार झाला नाहीत अस समजा. तुम्हाला या साठी अधिक मेहनत घेण्याची गरज अाहे.

४) अर्धवट माहिती असलेल्या नातेवाईक, मिञांच्या सल्ल्याने गूंतवणुक करत असाल, तर अापल्या गुंतवणुकीचा अॅसेट क्लास चुकण्याची खुप जास्त शक्यता अाहे.

५) गुंतवणुक करताना ध्येयाकङे लक्ष न देणे म्हणजे प्रवासासाठी गाङी मध्ये तर बसलोय पण कुठे जायचे हेच माहित नसल्यासारखे अाहे. शक्यतो प्रत्येक गुंतवणुकीला एक ध्येय द्या.

६) करप्रणाली, महागाई दर समजुन न घेता बॅंक एफङीत तथाकथित गुंतवणुक केली. बॅंक एफङी करुन सुरक्षित पण अल्पसा परतावा तर मिळाला पण नंतर कळाले की, जेवढा मिळाला त्यातला अाधी टॅक्स ने खाल्ला व उरलेला महागाईने गिळाला अाणि हाती धुपाटणे राहिले.

७) गुंतवणुकीबाबत सतत धरसोङीचे धोरण स्विकारणे. बरेच वर्ष गुंतवणुक ठेवली अाणि नेमका परतावा मिळायच्या अात काढुन घेतली. ८०% लोक या एका दोषामुळे शेअरबाजारात पैसा बनवु शकत नाहीत ही वस्तुस्थीती अाहे. त्यामुळे परतावा मिळेपर्यंत सल्लागाराच्या सल्ल्याशिवाय शक्यतो त्यातुन बाहेर पङु नका.

८) भांङवलवृद्धीचा विचार न करता केवळ “करबचत” साठी गूंतवणुक करणे. यात पीपीएफ व इंशुरंस (आयुर्विविमा) पाॅलीसीज् , ५ वर्षाची बॅंक एफङी, टॅक्स फ्री बाॅङ इ. मध्ये प्रामुख्याने गुंतवणुक केली जाते. यातील दिर्घकाळासाठी इंशुरंस (आयुर्विविमा) मधील गुंतवणुक म्हणजे १ लिटर दुधासाठी म्हैसच दारात पाळण्यासारख अाहे. जी चारा तर तुमचा खाते पण दुध मात्र इतरच पितात.

९) विशेष लाभ पदरात पङण्याची अजिबात शक्यता नसताना अापला पैसा खुप जास्त लाॅक इन असणार्‍या साधनामध्ये गुंतवणुक करुन लिक्विङीटी गमावणे. यात साधारण रियल इस्टेट मधील गुंतवणुक, अाणि परत एकदा इंशुरंसची (आयुर्विविमा) युलीप व एंङोमेंट पाॅलीसी असु शकते. या सर्वात तुमची लिक्वीङीटी नष्ट होते या ऐवजी म्युचल फंङाचे रिटायरमेंट प्लॅन अधिक उपयुक्त अाहेत. कारण अगदीच गरज पङल्यास ५ वर्षांनी पैसा काढता तर येतोच शिवाय नफाही करमुक्त मिळतो.

१०) पैशाला अाळशी करुन अापल्यासाठी कमाई न करु देणे म्हणजे म्हणजे हुशार विद्यार्थ्याला शाळेतच न जावु देण्यासारख अाहे. पैसा हा तुमच्या मुलाप्रमाणे असतो. त्यामुळे प्रसंगी त्याचे लाङ करत त्याला कङक शिस्तही लावणे अावश्यक अाहे. तरच त्याला जगरहाटी कळेल. त्याच्यातील क्षमतेला पुर्ण वाव द्या. एकदा पङेल, काही वेळा अपयशीही होईल पण एकदा का त्यातुन सावरला कि, जन्मभर तुम्हाला सांभाळेल. तो पर्यंत धीर तर धरायलाच हवा! हो ना…
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Behaviour

A man had to go on a long journey.

Before embarking on his journey, the man walked up to God and sought his blessings.

God offered him a choice.

“Take along with you 5 litres of water or 10 litres of ice”.

Greed nudged the man to choose the latter(10 litres of ice).

The journey commenced. The weather was cold. The man walked on and on with an air of contentment and joy that emerged from his choice; the 10 litres of ice that he had chosen.

Soon he grew thirsty. He looked at the ice block. It was rock solid.

He walked on with the conviction that the weather would soon them warmer and the ice block would start melting and he would be able to quench this thirst.

But the weather wouldn’t relent and the ice wouldn’t melt.

His thirst by now grew by gigantic proportions and he felt miserable and grew desperate.

His 10 litres of ice which had once made him feel comfortable was now seeming like a hard rock of solid weight ; a white elephant which instead of providing comfort was causing him severe stress.

How now wished he had chosen the 5 litres of water instead.

Realisation soon dawned upon him that although ice and water both had the same chemical formula they were not same.

What mattered most was the state of their matter ( liquid vs solid)

This story is the story of scores of people who have amassed huge amount of real estate and who believe they are wealthy.

But the fact is quite the contrary. Their wealth is just a mirage ; a state of mind and a false belief. Their wealth is like the ice that wouldn’t melt.

Unless and until you can liquidate the asset by converting its form into liquid cash what our the purpose of that wealth which you believe belongs to you?

If your asset cannot meet your immediate need of security, education, health, holiday, etc etc then what is its purpose?

Real estate is largely like this. It is illiquid.

Try selling your house in an emergency and you will realise how difficult it is to find a willing buyer.

By the time you can sell your house more often than not it is a little too late and your need would by then have transformed into a lost opportunity.