December Activity – Piggy Bank to Formal Bank – Information Handout for the Students

A shared characteristic of both saving and investing is the highly important role that they play in our lives. If you are not doing either, the time to get started is now. This may require changes in spending, tracking, and in the utilisation of your income, but it can and should be built into your plan. A general rule of thumb is that saving should be short-term while investing should be long-term.

 Read: Saving vs. Investing: What's the Difference?

Saving is the act of setting aside money for a future need or expense, i.e. for unforeseen situations. Financial institutions offer several savings options, the most common being a Savings Account in a bank, or fixed deposits, etc. Whereas, investing is the process of putting your money in financial products and investment avenues that offer the potential to generate income or aid in wealth creation. The most popular investment options in India include stocks, mutual funds, real estate, bonds, gold, etc. It is important to remember that risk and return go hand in hand when it comes to investing.

Read: SAVING VS. INVESTING – WHICH IS BETTER?

PMJDY is a nationwide scheme launched by the Government of India which aims to ensure the financial inclusion of every person who does not have a bank account in India. This scheme provides all banking services like remittance, credit, insurance, pension, savings and deposit accounts to the poor and needy section of our society.

Benefits of Children's Pradhan Mantri Jan Dhan Yojana:

You will get many benefits by opening a bank account of your children under the Pradhan Mantri Jan Dhan Yojana:

• There will be no need to maintain a minimum balance in the child's account.
• Live cover up to ₹ 30,000 will be available in the Prime Minister's Jan Dhan account.
• Under the scheme, money transfer facilities will be provided across the country.
• Accidental insurance cover up to ₹ 2,00,000 will be provided in Jan Dhan accounts like the other Jan Dhan accounts.
• Under the Jan Dhan Yojana (PM Jan Dhan Yojana), interest will be available on the amount deposited in the account of children.
• This scheme will be available to every beneficiary child in urban and rural areas across the country.

To open an account for your children under the Pradhan Mantri Jan Dhan Yojana, you will have to go to the bank associated with the scheme. There you can open the account by filling the application form to open a PM Jan Dhan account in the name of your child. To apply (PM Account Opening Scheme), you will need the following documents –

• The child's Aadhar card.
• Aadhar card of the child's parents.
• Address proof.
• Ration Card or Voter ID Card of parents.
• Mobile number.
• Passport size photograph.

To open a Jan Dhan Yojana account, you need to obtain the application form, which is available in both English and Hindi on the official website of PMJDY (pmjdy.gov.in).

Read: PM Jan Dhan Yojana

Video 1: Difference Between Saving Money and Investing Money

Video 2: How is Wealth Created | Savings and Investments