Invest in Your Child's Future with a PPF Account

As parents or guardians, we all want our child's future to be secured. If you are looking forward to saving and investing money for your child's future, then a public provident fund account in his/her name would be a good option to go with. PPF accounts for minors are quite common in India. They are opened by one of the parents of a minor, or by a legally appointed guardian in case of an orphan.

What is PPF Account for Minors? What is its Purpose?

PPF account for a minor refers to a public provident fund (PPF) account in the name of a minor opened by a parent or a legal guardian. PPF is a long-term savings, investment scheme.

A parent or a guardian can use PPF for minor to help create a sizeable fund before s/he turns 18, hence providing him/her with a solid financial base. This is also the main purpose of the creation of such accounts. This Is because by the time the child turns 18, that is, s/he becomes an adult, the person will have a good amount of money into his/her name to be used for education, marriage or any other important purpose.

A PPF account for minor helps build a comparatively more successful adult life for the children.

What is Public Provident Fund Scheme?

PPF scheme is one of India's most popular investment avenues. It has the backing of the Government and comes with various benefits for its account holders.

A PPF account's interest and maturity amount are tax-free. Also, when you contribute an amount to a PPF account, it enjoys tax-deductible up to Rs.1.5 lakh. Furthermore, the PPF scheme offers a decent interest rate and comes with a lock-in period of 15 years.

Rules, Eligibility to Open a PPF Account for Minors

While there is no age limit for minor (except that s/he is below 18), the following are other rules to keep in mind when planning to open a PPF account for a child:

• The first requirement is for you to be an Indian resident to apply for and open a PPF in the name of a minor.
• A minor's PPF account can be opened by his/her mother or father. That means, the father and the mother both cannot open the account and it needs to be done by either of them.
• In case where both the parents are deceased, a legally appointed guardian is eligible for opening a PPF account for the minor.
• Registration of a nominee is required for a minor's PPF account.
• One minor can have only a single PPF account in his/her name. Multiple PPF accounts cannot be opened in a minor's name.

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Documentation Required to Open PPF Account for Minors

Documents required to open a PPF account in the name of a minor are as follows:

Account Opening Form:This is to be filled by the guardian and includes providing his details and those of a minor in the form.

KYC Documents:The guardian needs to provide KYC documents including Aadhar Card, Voter ID, Passport and Driving License.

Proof of Age:An age proof of the minor should also be provided. This may be a Birth Certificate or an Aadhar Card.

Photos:Photographs of a guardian are also required.

Cheque:A cheque of Rs.500 or more needs to be submitted to mark an initial contribution towards the PPF account.

Steps to Open a PPF Account for Minors

• A guardian can start by visiting a post office or a designated bank in order to open a PPF account for a minor.
• There, s/he will get a PPF account opening form. The guardian should fill it up by providing his and the minor's details, as mentioned above.
• Finally, with the form, s/he also provides the necessary documents, which too are listed above.

Note that the maximum account that can be deposited in such account is Rs.1.5 lakh. While the parent or guardian can claim tax benefits for the amount deposited, the account needs to be transferred from the guardian when s/he turns 18.

Also, premature closure of the account is allowed to meet the minor's higher education expenses. And the PPF account can be closed after 5 years, but only if the money is to be used for the account holder's medical needs.

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