PPF Account Benefits: In PPF, you get guaranteed and tax-free returns. The Public Provident Fund (PPF) is a small savings scheme that investors have trusted for decades. You can open an account in your name as well as in your child’s name. Let’s explore the latest benefits of opening a PPF account for a child.
You can open a PPF account in your minor child’s name, and you will be the sole guardian of the account. Only one parent, either the mother or father, can open a PPF account for their child. However, if the grandparents are the legal guardians due to the parents’ passing, they can open a PPF account for the child.
15-Year Lock-in Period
If your child becomes an adult, they will be able to operate the PPF account. Once they reach adulthood, their signature will be required for deposits or withdrawals. They can also extend the account for an additional 5 years. The 15-year lock-in period will no longer be applicable for them.
Interest Rate Has Remained Steady
The interest rate on PPF is not fixed; it is linked to the 10-year government bond yield. The government determines the interest rate each quarter based on returns from its securities. Currently, the interest rate is 7.10%, and it has remained unchanged for some time.
Maximum Investment Limit
To keep the PPF account active, a minimum deposit of Rs. 500 must be made each year. The maximum annual deposit is Rs. 1.5 lakh. This limit applies to both your account and your child’s account. If you exceed this limit, you will not earn interest on the extra amount, and it will not be eligible for tax exemption under section 80C. The excess amount will be returned to you without interest.
When Can You Close the Account?
You can close the PPF account before maturity, but only after completing a minimum of 5 years. Early closure may be approved in special cases, such as for the treatment of serious illnesses of the account holder, their spouse, child, or parents, or the higher education of the account holder.
Disclaimer
The information provided about the Mentioned Scheme is for general informational purposes only. Times Bull is not responsible for any financial investments made, as it is entirely your responsibility. Please consult a financial advisor for better results.
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