Public Provident Fund (PPF) is one of the most popular long-term investment tools in India, thanks to its attractive interest rates and tax-free returns. While most individuals are aware of opening a PPF account in their own name, fewer know that it’s also possible to open a PPF account for minor children. This investment option offers parents a secure way to save for their children’s future, making it an attractive option for those planning ahead. In this blog, we will guide you through the process of opening a PPF account for minors, the documents required for a minor PPF account, and the various minor PPF account benefits.
Why Open a PPF Account for Minor Children?
As a parent, securing your child’s financial future is a top priority. Among the various investment options available in India, the Public Provident Fund (PPF) stands out as a reliable, risk-free way to accumulate wealth over time. By opening a PPF account for minor children, you can start building a substantial corpus for their education, marriage, or any other future needs. The government-backed nature of the PPF ensures safety, while the tax benefits and compounded interest make it an ideal long-term investment.
Many parents choose to open a minor PPF account due to its flexible nature, ease of management, and the fact that it allows contributions over a long tenure (15 years), which works well for a child’s growing years. In this guide, we will cover all the essential details about opening a PPF account for minor children, what documents are required, and the key benefits this account offers.
Understanding the PPF Account for Minor
In India, any parent or legal guardian can open a PPF account for minor children. The account is opened in the minor’s name, but the guardian operates and manages it until the child reaches adulthood. Once the minor turns 18, the account can be converted to an individual PPF account.
To open a PPF account for minors, the child must be under the age of 18 years. The account is generally opened under the guardian’s supervision, but the benefits and the funds accumulated belong to the minor.
How to Open a PPF Account for Minor Children?
Opening a PPF account for minors is a relatively easy process. The procedure is similar to opening a regular PPF account but with the added step of involving the minor’s details and the guardian’s documents. The following steps will guide you:
- Visit the Bank or Post Office: The first step is to approach a bank or post office that offers PPF services. Most banks, including public sector ones like SBI, HDFC, ICICI, and even post offices, allow the opening of PPF accounts for minors.
- Fill out the PPF Application Form: You’ll need to fill out the same application form used for opening a regular PPF account. There will be a section for the guardian’s details as well as the minor’s information.
- Submit Required Documents: Along with the application form, you’ll need to submit the documents required for the minors’ PPF account, which we will discuss shortly.
- Initial Deposit: The initial deposit to open the PPF account for a minor is ₹100. After this, deposits can be made in multiples of ₹50, with a maximum of ₹1.5 lakh per financial year.
Documents Required for Minor PPF Account
When you go to open a PPF account for a minor, you will need to provide the following documents required for a minor PPF account:
- Birth Certificate of the Minor: To prove the age of the child and confirm that they are a minor.
- Guardian’s Identity Proof: Documents such as an Aadhaar card, voter ID, or passport to verify the identity of the parent or guardian.
- Address Proof: The guardian’s address proof (Aadhaar card, utility bill, etc.) will be required.
- Passport-size Photograph: The minor’s photograph, along with a photograph of the guardian.
These documents must be submitted in original and photocopy format. It’s always a good idea to verify the exact requirements with your bank or post office before visiting.
Minor PPF Account Benefits
Opening a minor PPF account comes with numerous benefits that make it an attractive long-term savings option for parents. Some of the key minor PPF account benefits include:
- Tax Benefits: Contributions to the PPF account qualify for tax deductions under Section 80C of the Income Tax Act. The interest earned and the maturity amount are also tax-free, which adds to the overall benefit of the scheme.
- Guaranteed Returns: PPF offers guaranteed returns, making it a low-risk investment choice. The current interest rate is revised every quarter by the government but remains one of the highest among similar fixed-income schemes.
- Compound Interest: The interest earned on the PPF account is compounded annually, allowing your savings to grow significantly over time. This is particularly beneficial when the account is opened for a minor and invested for 15 years or more.
- Long-term Investment: With a 15-year tenure, a PPF account for minors grows substantially over time, allowing parents to create a solid financial cushion for their child’s future needs like education or marriage.
- Loan Facility: After three years, the guardian can also take a loan against the PPF account, which can be helpful in case of emergencies.
Conclusion:
Opening a PPF account for minors is a great way to start building a financial foundation for your child. The combination of tax benefits, guaranteed returns, and compound interest makes it an excellent long-term investment. By understanding the documents required for a minor PPF account and the easy steps to open a PPF account for a minor, you can start saving for your child’s future today. Whether it’s for their education, marriage, or any other milestone, a minor PPF account offers both security and growth, making it a must-have for parents in India.
By planning early, you not only secure your child’s financial future but also teach them the importance of savings and investments from a young age.
FAQs About PPF Account for Minor
Can I open a PPF account for a minor in my child’s name?
Yes, a PPF account for minors can be opened in the child’s name, with the parent or legal guardian acting as the account holder and managing the account until the child turns 18.
What is the maximum amount I can contribute to a minor PPF account?
The maximum contribution for any PPF account, including a minor PPF account, is ₹1.5 lakh per financial year. This limit is shared across all PPF accounts in your name (including any individual accounts you may have).
Can a minor operate the PPF account once they turn 18?
Yes, once the minor turns 18, the account can be transferred into their name, and they can operate it independently.
How do I close a minor PPF account?
A minor PPF account can only be closed in exceptional cases such as the death of the minor or the guardian. Otherwise, the account remains active until the minor reaches 18 years of age.
What happens to the PPF account when the minor turns 18?
When the minor turns 18, the PPF account for minor automatically converts into a regular PPF account, and the child can begin operating the account independently.
