At present, the PPF offers an interest rate of 7.1% per annum.
To get more benefits through investing in PPF, you can also open an account in the name of your children.
The Public Provident Fund (PPF) is a widely popular savings scheme in India that offers a secure investment option with assured returns and tax benefits. However, the maximum amount that can be invested in PPF during a fiscal year is limited to Rs 1.5 lakh. But married individuals can take advantage of the scheme by opening a PPF account in the name of their spouse or children, thus enabling them to enjoy additional benefits.
By opening a PPF account in the name of their partner or children, married individuals can maximise the benefits of this savings scheme. This allows them to invest more than the prescribed limit of Rs 1.5 lakh in a year, thereby increasing their returns. Additionally, the tax benefits of PPF can also be availed on the investments made in the names of their spouse or children.
At present, the PPF offers a favourable interest rate of 7.1% per annum, making it an attractive option for those seeking a safe investment avenue. Opening a PPF account in the name of children can help in building a substantial corpus for their future needs and can secure their future financial goals. Moreover, the tax benefits associated with PPF investments can also be utilised to further increase their savings.
As per the guidelines set by the Employees Provident Fund Organisation (EPFO), an individual can hold only one PPF account in their name. However, there is an option to open an account in the name of their children. It is important to note that a parent can open a PPF account in the name of only one child. In the case of having two children, the father can open an account for one child, and the mother can open it for the other.
Limit of investment
The deposit range for a financial year is between Rs 500 and Rs 1.5 lakh. But if the parents have their own PPF accounts, then the maximum investment limit in both their and the child’s PPF accounts will remain the same at Rs 1.5 lakh per annum.
Let us tell you that the PPF account matures in 15 years. After 15 years, you can withdraw your money from it. At the same time, you also get the option to extend it for 5-5 years.
How to open the account
To open a PPF account in the name of a child, you need some documentation, which includes the child’s photo, the child’s age certificate (Aadhaar or birth certificate), KYC documents of the guardian and a bank check for the initial deposit, etc. After the child turns 18, an application has to be given to change the status of the account. After this, the child can handle the account.
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