PPF Account for Minors
5paisa Research Team
Last Updated: 28 Dec, 2023 03:22 PM IST
Want to start your Investment Journey?
Content
- What is a PPF Account for Minors?
- Objective of PPF Account for Minors
- Features of PPF Account for Minors
- PPF Age Limit for Minor Account
- Minor PPF Account Rules and Eligibility
- Documents Required to Open a Minor's PPF Account
- Things to Know Before Opening PPF Account for Minors
- How to Apply for a PPF account for minors?
PPF account for minors is among the most reliable and time-tested investment schemes for Indian citizens. The most attractive feature of this scheme is its minimum deposit amount and that it is exempted from tax. Moreover, the interest one earns from this scheme is also exempted from tax. It implies that the scheme holder is likely to get higher returns than any other investment scheme. In this post, you will learn everything about opening a PPF account for minors, from its objectives and features to the application procedure and things to consider.
What is a PPF Account for Minors?
PPF account for minors is currently the most popular Indian government-sponsored long-term investment scheme. It enables the Indian residents to invest long-term and build a corpus. Every eligible Indian citizen is only allowed to register one PPF account, according to the guidelines. On the other hand, a parent can register a PPF account for their minor kid as their legal Guardian, which can fund the minor's higher education or marriage.
Objective of PPF Account for Minors
The following are some of the objectives of a PPF account for minors:
• To encourage young people for saving money.
• To provide tax-free investment returns and establish a long-term fund for the child's future expenses.
• Making good use of the tax benefits granted by the 1961, Income Tax Act’s section 80C.
Features of PPF Account for Minors
The PPF account for minors has unique features, making it an attractive saving scheme.
• Each person can only have one PPF account.
• Anyone, incuding minors, may not have more than one PPF account.
• When a minor opens a PPF account, their parent or Guardian may act on their behalf.
• The option of joint accounts is not accessible for PPF accounts.
• Only one Guardian may open a PPF account for a minor.
• The funds can be deposited into a PPF account as a one-time lump sum payment or in instalments.
• A PPF account has a maximum deposit of Rs.150,000 and a minimum deposit of Rs.500.
PPF Age Limit for Minor Account
There isn't any minimum age limit for minors for creating a PPF account. Both adults and minors are eligible for opening this account. Nevertheless, if any child is below 18 years, their Guardian may be responsible for handling the account on the child's behalf until the latter reaches eighteen years of age.
Minor PPF Account Rules and Eligibility
To qualify for opening a Public Provident Fund account for any minor, these criteria must be satisfied:
• Indian residents are eligible to open a PPF account and enjoy tax-exempted returns.
• Only one Guardian is allowed to open the account.
• The person managing the PPF account on the minor’s behalf who should be a legal guardian.
• Grandparents cannot operate the PPF account for the minor unless they become legal guardians after the parents' demise.
• During the PPF account opening, a nominee should be registered.
• The individual may contribute minimum 500 rupees and a maximum 1.5 lakh rupees to the minor's PPF account in a fiscal year.
Documents Required to Open a Minor's PPF Account
To open a PPF account for minors, submitting these documents is mandatory:
• Age verification for the minor can be established through documents such as the Aadhar card.
• The legal Guardian of a minor must submit a KYC document containing identity proof (passport size) and address proof. Acceptable identity proofs include a PAN card, Aadhar card, driver's license, or similar documents.
• Submission of a PPF form containing comprehensive details about the minor and the Guardian is mandatory.
• An initial contribution must be made to your PPF account, and a corresponding verification is necessary for this transaction.
Things to Know Before Opening PPF Account for Minors
• Opening a PPF account for minors requires a minimum 100 rupees initial deposit. However, the annual contributions must range between a minimum of 500 rupees and a maximum of 1.5 lakh rupees.
• Suppose the funds invested in a minor's PPF account originate from the income of the parent or Guardian. In that case, such amounts can be considered under 1961, Income Tax Act’s section 80C, making them eligible for the tax benefits.
• When the minor reaches 18 years of age, applying for transferring the account from the legal Guardian to the minor is mandatory. This application should include the necessary documents and bear the signature of the depositor, now a major. Additionally, the Guardian who opened the account should attest to the application.
• Closure of the PPF account for minors is permissible under specific conditions but only after five years. This closure is sanctioned because the withdrawn amount will be used for the medical needs of the account holder.
• Furthermore, premature closure of the minor's PPF account can occur if the funds are utilised for the minor's higher education.
How to Apply for a PPF account for minors?
The steps to initiate the opening of a PPF account for minors are outlined below:
1. Visit a bank or post office that provides PPF account services.
2. Complete the PPF account form, providing essential details about the minor.
3. Furnish KYC documents for both the parent or Guardian and the minor.
4. Make an initial deposit of Rs—100 into the PPF account.
5. Submit required documents, including the minor's birth certificate, to validate the age during the application process.
More About Savings Schemes
- Section 194IC
- PF Form 11
- Form 13 For PF Transfer
- EPF Form 20
- Corporate Fixed Deposit
- Fixed Deposit (FD) vs Recurring Deposit (RD)
- Income Tax on Recurring Deposit RD
- How to Withdraw Money from Unclaimed EPF Account
- How to Get Your Name Changed in the EPF
- Steps to Upload KYC for EPF UAN
- EPF Payment
- Difference between GPF, EPF, and PPF
- Difference Between APR vs APY
- Atal Pension Yojana Tax Benefits
- How To Open Atal Pension Yojana (APY) Account Online
- How to Close Atal Pension Yojana Account
- How to Change Details in Atal Pension Yojana Scheme
- NPS v/s SIP
- NPS Lite Aggregators List
- NPS Customer Care Number
- National Pension Scheme for NRI
- National Pension Scheme (NPS) Withdrawal Rules
- Best Child Investment Plans In India
- Post Office PPF Account
- PPF Account Withdrawal Rules
- PPF Deposit Limit
- PPF Account Age Limit
- PPF Account for Minors
- PPF Online Payment
- ELSS Vs PPF
- Loan Against PPF
- Post Office PPF Interest Rate
- PPF Interest Rates 2023 - 24
- What is Pradhan Mantri Jan Arogya Yojana
- Balika Samridhi Yojana
- What is member ID in PF?
- How To Merge Two UAN Numbers Online
- How to Merge Two PF Accounts?
- How to Raise Grievance in EPFO
- How to Check PF Balance in Mobile: A Comprehensive Guide
- How to Download Your EPF Passbook: A Comprehensive Guide
- TDS on PF Withdrawals: A Comprehensive Guide
- How to Transfer Your PF from One Company to Another?
- EPF vs PPF
- PF Balance Check with UAN Number Without Password
- PF Balance Check without UAN number
- Introduction to Savings Schemes
- Difference Between VPF And PPF
- EPF Form 10D
- NPS vs PPF
- Superannuation Meaning: What is Superannuation
- What is Fixed Deposit?
- Pradhan Mantri Awas Yojana
- Atal Pension Yojna vs NPS
- NPS (National Pension Scheme Charges)
- EPF vs EPS
- EPF Form 2
- What are Tier 1 and Tier 2 in NPS?
- NPS Tier 2
- NPS Tier 1
- Senior Citizen Saving Scheme (SCSS)
- General Provident Fund (GPF)
- Pension Fund Regulatory & Development (PFRDA)
- SBI Annuity Deposit Scheme
- GPF Interest Rates 2023
- Unit Link Insurance Plan (ULIP)
- List of Bank Mergers
- PRAN Card
- Foreign Currency Non Resident Account (FCNR)
- What is EDLI?
- What Is NPS Interest Rates?
- What is Form 15g
- Saksham Yuva Yojana
- Why Invest in PPF?
- How To Check PPF Account Balance
- NSC Interest Rate
- NSC – National Savings Certificate
- Swavalamban Pension Yojana
- KVP Interest Rate
- PF Withdrawal Rules 2022
- NPS Returns
- National Pension Scheme (NPS)
- Jeevan Pramaan Patra - Life Certificate for Pensioners
- Kisan Vikas Patra (KVP)
- PF Form 19
- PF Withdrawal Form
- EPS - Employee Pension Scheme
- PPF Withdrawal
- Atal Pension Yojana (APY)
- EPF Form 5
- EPF Interest Rate
- Check Your PF Balance Online
- Employee Provident Fund (EPF)
- UAN Registration & Activation Online
- UAN Member Portal
- Universal Account Number
- National Savings Scheme
- Post Office Tax Saving Schemes
- Post Office Monthly Income Scheme
- Post Office Savings Schemes
- EPF Claim Status
- EPF Form 31
- EPF Form 10C Read More
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing. For detailed disclaimer please Click here.
Frequently Asked Questions
There is no age limit constraint for opening a PPF account for minors. Nevertheless, the management of a minor's PPF account can only be undertaken by a parent or Guardian until the account holder reaches the age of 18.
A PPF account for a minor can be initiated with a minimum deposit of Rs. 100. Nonetheless, irrespective of the number of accounts, the maximum annual investment allowed in a family's PPF accounts is Rs. 1.5 lakh.
Upon the minor reaching 18, the legal guardian of the minor PPF account holder is required to apply for a change in status. The account holder should manage subsequent transactions personally. The account holder must then submit an updated application, including their signature, the necessary documents to be attested, and the application form.
Partial withdrawals from the PPF account of a minor are permissible, but only after the 7th year from the account's opening. Furthermore, the Guardian is obligated to provide a declaration affirming that the withdrawn funds are intended solely for the benefit of the minor.
The closure of a minor's PPF account by a legal parent is restricted to specific situations, such as funding medical treatment for the account holder. A closure request can only be initiated after the account has been open for at least 5 years.
The government-supported Public Provident Fund (PPF) is the ideal choice. For families aiming to establish funds for their children's well-being, initiating a PPF account on their behalf is one of the most effective ways to accumulate resources for future expenditures. Whether earmarked for higher education, marriage, or as a contingency fund, a PPF represents a straightforward and convenient investment option.