Want to save money for your child's future? Here's how you can do it by opening a minor PPF account
New Delhi | Jagran Business Desk: The cost of living has increased over the last few years in the world. From transportation cost to increased taxes to regular expenses, there has been a hike in the price of every commodity that led to an increase in the cost of living in the country. With the cost of living increasing in the country, there is an important need for us to plan for our child’s future.
There are several ways by which you can save money for your child’s future, including fixed deposits. However, fixed deposits may not offer tax-efficient returns, forcing you to look at other options to save money for your child’s future. In such a case, opening a Public Provident Fund (PPF) account for minors can be helpful for you.
Here’s all you need to know about PPF account for minors:
According to the current Reserve Bank of India (RBI) rules, you can open PPF account for minors but your annual contribution cannot exceed Rs 1.50 lakh. You can open a PPF account for minors in their legal guardians’ name (on their mother or father’s name). To open a PPF account for the minors, you need to go to a post office or in a designated bank branch which is authorised to open a PPF account.
What are the documents that are required to open a PPF account for minors?
According to the rules laid down by the RBI, the legal guardians of the child would need to provide their own details to open a PPF account for minors. The legal guardians would need to know your customer (KYC) documents along with photographs, their child’s Aadhaar card or birth certificate and a cheque for initial contribution.
What about the minimum and maximum investment amount for a PPF account for minors?
The legal guardians of the minor would need to make an initial contribution of Rs 500 in the PPF account via cheque. However, it should be noted that the maximum amount that could be made in a PPF account for minors is Rs 1.5 lakh. It is noteworthy to mention that the annual contribution to PPF account for minors should not exceed Rs 1.50 lakh in a financial year. Apart from this, the legal guardians of a child should also know that the interest earned in the minor PPF account along with the maturity amount is tax-free for the account holder.
Posted By: Aalok Sensharma