PPF Account for Minors - Rules, Eligibility & Documents Required

In India, people start their investing journey at a very young age and this has been encouraged by investment options like PPF that are accessible to minors as well. This means that you can open a PPF Account for your children to ensure that they have a financially secure future. You can open the PPF Account as a parent or a guardian on the child’s behalf and keep making contributions. Read this blog post to know everything you need to know about a PPF Account for minors.

PPF Account for Minors: Explained

A PPF Account for minors is an investment tool that helps build a secure financial future for a child. Parents or legal guardians can open this account, ensuring a disciplined savings approach for their child’s future expenses, such as education or wedding. The guardian operates the account until the child turns 18, after which the account holder (who is now an adult) can take control of it.

Rules of PPF Account for Minors

1. Only a parent or legal guardian can open and operate a PPF Account for a minor.

2. A minor and an adult cannot have a joint PPF Account.

3. Grandparents can open a minor’s PPF Account only if they become legal guardians after the parent’s demise.

4. Deposits can be made either in a lump sum or in multiple instalments.

5. The maximum annual deposit limit for a minor’s PPF Account is ₹ 1.5 lakh.

6. A nominee can be assigned while opening the account.

Key Objective of PPF Account for Minors

The primary objective of opening a PPF Account for a minor is to build a financial safety net for their future. As PPF investments come with assured returns, they serve as an excellent savings option for children. Parents can secure funds for their child’s higher education, wedding or other financial needs.

Eligibility Criteria for Opening a PPF Account for Minors

1. The minor must be an Indian citizen or resident to open an Account under the Public Provident Fund (PPF) Scheme.

2. Only one parent or legal guardian can open and operate the minor’s PPF Account.

3. A nominee must be assigned during the account opening process.

Documents Required to Open a Minor’s PPF Account

To open a PPF Account for a minor, the parent or legal guardian must submit the following documents:

1. Basic details of the guardian and the minor, including name, date of birth and gender.

2. KYC documents and a passport-sized photograph of the
minor and the parent / guardian.

3. Birth Certificate or Aadhaar Card of the minor as proof of age.

4. A minimum deposit of ₹ 500 must be made per financial year to keep the PPF Account active.

How to Open a PPF Account for Minors?

1. Visit an ICICI Bank Branch

   • Go to a designated ICICI Bank Branch with the required documents.

2. Fill Out the Application Form

   • Obtain and fill the PPF Account Opening Form for minors.

3. Submit Documents

   • Provide the following:

     • Minor’s Birth Certificate (proof of age and parent / guardian relationship)

     • Parent’s / guardian’s identity proof and address proof

     • Passport-sized photographs of both the minor and the parent / guardian.

4. Make the Initial Deposit

   • Deposit a minimum of ₹ 500 (up to a maximum of ₹1.5 lakh per year).

5. Signatures and Verification

   • The parent / guardian must sign the form and complete the verification process as the account operator.

6. Receive Account Details

   • Once processed, the Bank provides the PPF Account details.

Things to Consider Before Opening a PPF Account for Minors

1. Any resident Indian can open a minor’s PPF Account and at least ₹ 500 must be deposited every financial year to keep the account active.

2. The maximum deposit limit for a PPF Account is ₹ 1.5 lakh per financial year.

3. The parent or guardian who contributes to the minor’s PPF Account can claim tax benefits under Section 80C of the Income Tax Act.

4. Once the minor turns 18, the account ownership can be transferred to them. This requires an application, proof of age and the new account holder’s signature.

5. Premature closure of a minor’s PPF Account is allowed only after five years, for specific reasons like medical emergencies or further studies.

Benefits of a PPF Account for Minors

1. Tax-free returns: PPF investments come under the Exempt-Exempt-Exempt (EEE) category under the old tax regime. It means your contributions, interest earned and maturity proceeds are tax-free.

2. Secure savings: The PPF scheme is backed by the Government of India, which means your money is secure and earns decent returns.

3. Long-term benefits: PPF has a 15-year lock-in period, making it ideal for long-term financial planning for children.

4. Financial discipline: You can teach your child the importance of regular contributions which will help them inculcate a habit of disciplined savings.

Conclusion

PPF for children is a very smart way to start building financial cover at a young age. The government allows a PPF Account to be opened for children, but only a parent or a guardian can open it on the minor’s behalf. A PPF Account can help parents / guardians teach children the importance of saving and working towards a healthy financial future right from the beginning. Follow the eligibility and paperwork given above and seamlessly open a PPF Account for minors with ICICI Bank.