Public Provident Fund for minors- Why it’s Recommended

By | 10/10/2018

The Public Provident Fund is a popular investment cum tax saving instrument for Indians due to its limited risk and guaranteed returns. One can open a Public Provident Fund account in any bank or post office. It can be opened by any individual who is a citizen and resident of India on his behalf. One cannot open or handle more then one PPF account in his name at the same time.

However, you can open and handle a separate PPF account (apart from your personal PPF account) in the name of a minor whose legal guardian you are. India’s Best Free Online Public Provident Fund (PPF) Investment Financial Advisory tells you the reasons you have to open a PPF account for minors.

  1. The early bird gets the worm

By opening a Public Provident Fund account in the minors name when he/she is an early stage in life, the account would become mature or be close to maturity by the time the minor is no longer a minor. For this, you need to keep in mind not to put more than Rs 1.5 lakh in a financial year as per current laws as that is the maximum you can put in a PPF account.

  1. Inculcate in the minor the habit of saving

This will help you explain the minor what saving is. You can encourage him/her from an young age to save some money he/she receives as allowance and put that money into his/her PPF account. Best Financial Adviser Kuber Mindz Moneymindz says that this is a good way to teach children the habit of saving.

  1. Upon maturity, the money can be used for the child
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Once the account matures, the option will be left to the child (if he/she is above the age of 18) whether he/she wants to extend the PPF or withdraw the money closing the account. Extension of PPF account can be done every five years after the initial 15 year period.

  1. Partial withdrawal facility

After seven years, PPF allows partial withdrawals, one per year. This offers liquidity and if needed, you can avail this facility. Smart Financial Adviser Kuber Mindz recommends to use this facility only in case of emergencies when money is needed immediately. This is because you lose considerable interest you could have earned otherwise with each partial withdrawal.

  1. Tax relief 

PPF has an EEE (Exempt-Exempt-Exempt) status. Therefore, interest earned, contribution and withdrawals are tax exempt. This comes as an added benefit and is precisely why Public Provident Fund is popular in India.

  1. Teach your kid that money doesn’t come from ATM’s or grow on trees

At a young age itself, you can inform your child about the PPF operating in his/her name and explain that money doesn’t grow on trees or come from the ATM you usually visit. This is a good lesson for the child.

You can avail more information on this. Open a PPF account for your child now.

For more information visit or give a missed call to 022-62116588

For More Information Visit:

India First Free Online/On-call Financial Advisory Portal, Best Free Financial Assistance Portal Corporate Fixed Deposit (CFP)- MoneyMindz

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