How to Open a PPF Account for Your Child?

The Public Provident Fund (PPF) was started by the National Savings Organisation with the mission to encourage small savings and investments among the people. This is considered one of the ideal investment options that offers decent returns and some income tax benefits under Section 80C of the Income Tax Act.

Individuals can open this PPF account for minors as well as for themselves. To know more about what it is and how to open it for your child, keep reading.

A Public Provident Fund (PPF) is a long-term savings scheme that offers excellent returns. This scheme is offered by the Central Government to assist Indian residents with investment and building a corpus.

Many investors considered this an ideal option for investment for its tax-saving feature. In fact, it offers triple tax benefits in EEE, i.e. the taxes are exempted from the maturity benefits, the contribution made to the account, and the interest that is earned on behalf of it.

i) What Are the Steps to Open a PPF Account Online?

Follow these steps to open a PPF account online:

Step 1: On the bank’s internet banking platform, log in to your account online.

Step 2: Choose the “Open a PPF account” option.

Step 3: Now, fill in the application form for PPF with the required details. Before submission, ensure to verify all the details.

Step 4: Specify the amount to be deposited every year in your PPF account. You can also make settings to automatically transfer the specified amount from your savings account to your PPF account.

Step 5: Review and submit your application. For authorising the transaction, you will receive an OTP on your registered mobile number.

Step 6: Submit the OTP and you will receive a message and an email that indicates a successful account creation.

ii) What Are the Steps to Open a PPF Account Offline?

In case you don’t want to open a PPF account for child online, you can carry out steps provided here for the offline process:

Step 1: In order to open a PPF account conveniently, it is mandatory to hold a savings account with the bank. Before proceeding to open a PPF account, ensure to compile all the relevant documents required for opening a PPF account.

Step 2: Then visit the nearest branch of your bank where you want to open a PPF account.

Step 3: The bank representative will then provide you with a PPF application form.

Step 4: You need to duly fill in this form and submit it along with the relevant documents required for opening the PPF account for your child.

You can open your PPF account from the post office by following more or less the same procedure as stated above.

Following eligibility requirements should be met in order to be eligible for opening a PPF account for minors:

• Individuals opening the account should be a resident of India.
• Only one guardian or parent can open a PPF account in their child’s name.
• Individuals who are opening or operating this account on behalf of their minor should be one of their legal guardians
• While opening the PPF account, it is mandatory to register the nominee
• This account cannot be operated by the child’s grandparents unless they are considered legal guardians after their parent’s death.
• In a financial year, the legal guardians of minors are liable to contribute a minimum of Rs. 500 and a maximum of Rs 1.5 lakh to the minor’s PPF account.

The guardian or parent of minor child should submit the following documents along with the duly-filled application form:

• KYC documents of the legal parent or guardian of the child, like PAN card, Aadhaar card, passport, etc.
• Passport-size photograph of guardian or parent
• Age-proof of the minor child (Birth certificate or Aadhaar card)
• An account-payee cheque for the initial contribution to the PPF account

There are a few things to consider by parent or guardian who is willing to open a PPF account for their child:

• Individuals can initially deposit a minimum of Rs. 100 for opening a PPF account in the name of a minor. There is no such upper limit set for PPF contributions. However, parents should keep in mind that in a fiscal year, the minimum deposit has to be of Rs. 500 and maximum of Rs. 1.5 Lakhs.
• A PPF account for minors cannot be opened in joint names. Also, only a single PPF account for a child is allowed.
• If the parent or guardian is investing the amount for their minor’s PPF account from their income, then they are liable to include it in under Section 80C of the Income Tax and they will be eligible for tax benefits as well.
• As soon as the minor reaches 18 years of age, an application must be submitted for transferring the ownership of the account from the guardian to the minor. In this case, the application must be submitted along with the depositor’s signature and the required documents.
• PPF accounts for minors can be closed prematurely as well if the amount is being used for minors’ medical emergencies or higher education.
• One can also make partial withdrawals from the minor’s PPF account after 7 years onwards of opening the account. Only it should be followed by a declaration that the withdrawal money is used for the minor's purpose.

Thus, if you want to gather funds for your child’s higher education or for their backup, then the best way is to open a PPF account for minors on behalf of your child. As it is backed by the Central government and comes with low risk, it is the best investment plan for your child’s financial life.