In addition to opening a PPF account in his own name, an investor can also open another PPF account in the name of his minor child.
Many investors invest in PPF or Public Provident Fund for retirement planning. The Public Provident Fund is a retirement scheme. The project was launched by the Government of India in 1978 with the aim of providing a secure retirement to every individual. An investor has to deposit a minimum of Rs.500 in this account every financial year.
The maximum amount is one and a half lakh rupees. In addition to providing retirement savings, income tax benefits can be claimed on the amount of money invested in this account.
But is the benefit of the Public Provident Fund applicable only to adult employees or businessmen? Absolutely not. In addition to opening a PPF account in his own name, an investor can also open another PPF account in the name of his minor child. It can be said that this project can give a good return at the right time if it is planned properly keeping in mind the future of the child.
Benefits of Public Provident Fund are:
1. The return is risk free.
2. Compound interest rate.
3. Income Tax Exemption under 80C of Income Tax Act, 1971.
4. Long term investment for 15 years.
5. Opportunity to withdraw loans and advances based on PPF balance.
. The minimum amount of investment is less, only 500 rupees.
. There is a benefit of partial withdrawal from the seventh financial year.
How much money can be deposited in a minor’s PPF account?
The minimum amount for a PPF account opened for a minor is Rs 500 and the maximum is Rs 500,000.
If you need to borrow or withdraw money:
Minors also have the opportunity to withdraw loans or partial withdrawals from PPF accounts. However, in order to withdraw money from that account, the parents of the minor have to make it clear that the money is being withdrawn only for that minor.
When a minor completes 18 years –
If the child is 18 years of age, his account needs to be converted into a normal PPF account. As an adult, the minor will be able to manage the account himself.
What to do to apply for PPF:
1. First go to the nearest bank or post office.
2. There you will need to take a form to open a PPF account.
3. The information sought in the application form should be read carefully and it should be filled.
4. Some documents will be required in the application form.
5. Attach those specific documents with the application form and give it to the concerned bank or post office employee.
. After that the bank authorities will verify the application form.
. The account will be opened only after verifying the information correctly.
Documents required to open a PPF account:
1. Parents must take KYC.
2. In addition, to open a child’s PPF account, you need a child’s photo, age certificate, Aadhaar card, birth certificate.
If so, there is no problem to open a PPF account for the child. However, you need to contact the bank or post office to know the details.