PPF Account For Minors

By | November 14, 2018

The Public Provident Fund is a great investment option that helps you to build your retirement savings and provides tax benefits. Here’s everything you need to know about opening a PPF account for your kid.

The Public Provident Fund (PPF) is one of the most popular long-term savings instruments amongst salaried individuals in India. Opening a PPF account can help you build your retirement savings and provide tax benefits as well. But did you know you can open a PPF account for your minor child too? We’ll tell you everything you need to know about the Public Provident Fund Scheme for minors.

What is a Public Provident Fund?

The PPF is a long-term investment option provided by the Government of India. It allows you to invest a minimum of Rs. 500 and up to a maximum of Rs. 1, 50,000 in a financial year. It is also considered to be one of the most efficient tax-saving investment options in India.


The PPF is a long-term investment instrument with a lock-in period of 15 years. The account will mature after a period of 15 years from the end of the year in which the account was opened. You can extend the tenure any number of times but only for a period of five years once the account has matured. The extension can be made with or without making any fresh contributions.

Once your child becomes a major, he or she can choose to extend the account with or without any future contributions. If the account is continued without any future contributions, the existing balance in the account will continue to earn interest as applicable.

However, according to the current laws, the interest earned from the PPF account is exempt from tax.  In case the account is extended with new deposits, your child will be eligible to claim the tax benefit under section 80C of the Income Tax Act.

Check this: Tax Saving: What To Choose Between PPF Or ELSS?

Premature closure:

Premature closure of a PPF account is allowed only after the account has completed five financial years. This can be done only in specific cases, like the treatment of a serious ailment for example, and you need to provide documents supporting the reason of closure.

Additional Reading: PPF Withdrawal Rules, Loans And Premature Closure

Rate of interest:

The current rate of interest is 7.6% p.a. (effective 1st April 2018). The rate is fixed on an annual basis and changes with every passing year. The rate of interest is calculated on the minimum balance in your account between the 5th and the last day of every month. It is compounded annually and credited on the 31st of March every year.

Check this: 15 Things You Need To Know About PPF

Who can open a PPF account for minors?

To open an account for your child, make sure you meet the following criteria:

  • A PPF account can be opened by resident Indian Individuals and individuals on behalf of minors.
  • The account can be opened either by the mother or father on behalf of their child. However, both cannot open accounts on behalf of the same minor.
  • Only a single account can be maintained by an individual, except an account that is opened on behalf of a minor.
  • Grandparents are not allowed to open a PPF account on behalf of a minor. It is allowed only if they are appointed as legal guardians after the demise of the parents.

What is the PPF account limit for minors?

The total amount that you can invest in these accounts is only Rs. 1.5 lakhs. If you have more than one child, you can open an account in each child’s name but the overall investment limit should be within Rs. 1.5 lakhs.

There you have it! In case you are looking for other investment products like Mutual Funds, Fixed Deposit etc., go ahead and explore your options right away!

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