Public Provident Fund: PPF can be quite helpful if you want to invest in a plan for your child where you know your money is protected and you also get guaranteed returns. PPF, or the Public Provident Fund, is a government programme. PPF takes 15 years to mature.
Annual Contribution Limits
A minimum of Rs 500 and a maximum of Rs 1.5 lakh can be contributed annually under this scheme. Interest is being paid out at a rate of 7.1 percent. With this plan, you can ensure your child’s future in such a circumstance. What is the minimum age at which a child can register a PPF account? Can parents receive tax benefits on their child’s account? Let us tell you.
Flexible Age Requirement
Children can open a PPF account at any time after birth; there is no minimum age requirement. Children’s guardians open their PPF accounts. Parents contribute to this as well. However, the child can manage and make investments in his account on his own after he turns 18 years old.
Tax Benefits for Parents
Additionally, PPF is free from taxes under Section 80C of the Income Tax Act. If you create a PPF account in your children’s names and make deposits into it, you may be eligible for an income tax exemption under Section 80C. In accordance with income tax regulations, parents or guardians who earn the money put in their children’s accounts are also eligible for tax exemption on that amount.
Account Opening Process
The bank or post office where you wish to open an account has the form for starting a PPF account. Fill out the form with the necessary information first. The form must be submitted with a passport-sized photo and the parent’s or legal guardian’s KYC credentials. In addition, an age certificate for the child will be needed. You can provide Bal Aadhaar, a hospital-obtained birth certificate, or any other officially recognised proof of date of birth for this.
Send in the completed form and the required paperwork. Following this, a PPF account will be formed in the child’s name. A lot of banks now provide the option to open a PPF account online, but in order to do so, the guardian of the minor must already have an existing savings account with the bank.
Premature Closure Conditions
PPF accounts may only be closed prior to maturity if you will require the funds in the medium term to support your child’s further education. In order to do this, the child’s parents must also present documentation of their admittance to the accredited school.
However, parents can only use this account closure option once the account has been open for five years. In addition, the parents will need to show that the money is required for their child even if they only wish to take a partial withdrawal from the account.