PPF for Minor: Key things to know before opening account for your child
As per the government rule, an individual can have only one PPF account, however, it permits opening of account for children by parents or guardian
PPF for Minor: Public Provident Fund (PPF) is inarguably one of the safest investment options for decent returns over a period of time. It is very popular among service class. PPF provides tax benefits under section 80 C of the Income tax and the interest earned and the principal amount on maturity does not attract any tax deduction. It has been designed to accomplish a long-term target of an individual and is seen as retirement fund as it comes with lock-in period of 15 years. The fund could be planned for meeting expenses of children in long-term too. It is considered one of the best options to generate wealth for your child as it is risk-free and attracts no tax on maturity. As per the government rule, an individual can have only one PPF account, however, it permits opening of account for children by parents or guardian. Let’s see how one can open a PPF account for their child, required documents and what it offers.
* As per the rule, PPF account for a child could be opened by parents or a legal guardian. But only one of them could open an account and two separate accounts are not allowed.
* The account could be transferred in the name of the child once he/she turns 18.
* It could be opened from a bank or post office allowed to handle PPF work.
* KYC documents of the parent or legal guardian, such as ID proof and address proof will be required along with the age proof of the minor. Photo graph of a parent or guardian and a Rs 100 cheque are also required while opening such PPF account.
* Minimum and maximum limit of investment in a child's account in a financial year is same as an adult—Rs 500 and Rs 1.5 lakh, respectively.
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* Partial withdrawal is allowed after only seven years of opening the account and it could be closed only after five years.
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