PPF For A Child: How To Open Kids’ PPF Account?

A Public Provident Fund, or PPF in short, is a long-term savings scheme devised by the government to help Indian citizens invest and build a corpus for the long term. The key advantage of a PPF is that the interest earned and the fund after maturity is completely tax-free.

PPF for Child

According to the set rules, every eligible Indian citizen can open only one PPF account. However, a parent can open a PPF account for their minor child as their legal guardian, serving as an excellent source for the child’s higher education or marriage.

Here is how you can open a PPF account for your child, along with some key things that you should know about a child’s PPF account:

Who is eligible to open a PPF account for the minor?

Any parent or legal guardian can open a Public Provident Fund account on behalf of a minor, provided that they are resident citizens of India. However, only one parent can open a PPF account in the name of the minor children.

Where can one apply for a PPF account for minors?

A parent or guardian can open a PPF account at any designated bank or any post office authorised to receive applications for PPF.

Documents Required:

  • Duly filled PPF form, including details of both the parent or guardian as well as the minor.

  • KYC documents of the legal guardian or parent, including ID proof and address proof like passport, PAN card, Aadhar card etc.

  • Photograph of guardian or parent.

  • Age proof of the minor

  • An initial investment of a minimum of Rs. 100/- via cheque.

Opening a PPF account for your child- Things to know

  • The minimum amount in a PPF for minors is Rs. 500 in a financial year, the same as that of an adult PPF account. The upper limit of investment per year is Rs. 1.5 lakh. However, it is to be noted that the maximum limit of Rs. 1.5 lakh is for both the legal guardian or parent’s PPF account, as well as the minor’s account.

    The tax exemption that can be claimed for PPF investment under Section 80C is Rs. 1.5 lakh per annum. Again, this maximum limit of Rs. 1.5 lakh is the collective limit for all PPF accounts of the family, including minors.

  • Once the minor turns 18, the parent can switch the PPF account entirely to their name. Any further actions for the PPF account have to be made by the new account holder. To do this, the person who turned major has to apply with documents to the post office or bank where the PPF account was opened.

  • Parents can withdraw partially from a PPF after seven years. If the parent or guardian wishes to withdraw funds from the minor’s account, they have to submit proof that the money is withdrawn will be used for the minor’s benefit.

  • In case the guardian wishes to close the minor’s PPF account, they can do so only after five years. Only in cases where the minor requires medical treatment for a serious ailment or when funds are required for the child’s higher education can the PPF account be closed.

PPF Account for children: Is it a good option?

If you want to invest in a financial instrument with low risk, the government-backed Public Provident Fund is the way to go. If you’re a family looking to set up funds for the welfare of your children, then opening a PPF account on behalf of your children is one of the best ways to gather funds for their future expenses. Whether it is their higher education, marriage, or simply a way to create a backup fund, a PPF is the easiest and most convenient investment.