PPF in the Name of Minor: Things You Cannot Miss Out

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Public Provident Fund Account for Minors

One major misconception in the minds of people is that PPF cannot be opened in the name of minors. PPF accounts can be opened in the name of minors and here’s everything you need to know about opening a PPF account for your children.

Who can open PPF for minor child?

Guardians can open PPF account for their minor child where guardian is
  • Either father or mother
  • Guardian under the law can also open PPF account where parents are not alive
  • Guardian when surviving parent is incapable of acting.
How much can I Invest in PPF for Minor?

Whether you invest in PPF in your own account or in the name of minor in which you are guardian, the tax deduction remains at Rs. 150000 per financial year. Thus, the total amount you can deposit in both accounts of your’s and your child’s should not exceed Rs. 1.5lakh.

Special Benefits of PPF Minor Account

The lock-in period of PPF account is 15 years. When the child becomes major, i.e. turns of the age of 18 years, the operation of account will be by the child. So, the child’s signatures are required to withdraw or deposit money. When the lock-in period of 15 years is completed and the kid has become major, the child can choose to extend the account or close it. PPF account comes with tax-exempt interest, amount withdrawn exemption and tax-exempt contribution.
When can I Withdraw Money from PPF of Minor?

Partial withdrawals are allowed where the account has completed five financial years. It is also allowed when the amount is required for higher education of minor account holder by production of documents and fee bills in confirmation of admission from a recognized institute of India and abroad.
What is the Rate of Interest?

The rate of interest on PPF account is determined by Central Government on quarterly basis. Currently, it is 8% per annum with effect from 01-10-2018. Interest is calculated on minimum balance in PPF between 5th day and end of month and is paid on 31st March. So, the amount you deposit after 5th, the interest will not be calculated for that particular month.

 What are you thinking for? Get PPF account for your minor today and reap excellent benefits. Have any queries? Feel free to share with us in the comments.

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