Create fund of lakhs for your child with PPF scheme:You can open an account with ₹500, know what are the rules

If you are planning to start an investment in your child’s name, you can invest in the Public Provident Fund (PPF) scheme. Currently, an annual interest rate of 7.1% is being offered on this scheme. By opening a PPF account in your child’s name, you can easily build a fund of lakhs for them. However, there are certain rules for this. We are informing you about those rules. One person can open a PPF account in the name of only one child A child’s PPF account can only be opened and operated by parents or a legal guardian. An individual can open only one PPF account in their own name. However, apart from their own PPF account, an individual can open another PPF account in the name of a minor child. But it is important to note here that one parent can open a PPF account in the name of only one child. According to the rules, if someone has two children, the mother can open a PPF account for one minor child and the father can open one for the other. How much money can be deposited? For a minor’s PPF account, a minimum of 500 and a maximum of 1.5 lakh rupees can be deposited in a financial year. However, if the parents also have their own PPF accounts, the maximum deposit limit of 1.5 lakh rupees per annum applies to the combined total of their own accounts and the minor’s PPF account. Understand with an example: If a guardian deposits 1 lakh rupees in their own PPF account and 80 thousand rupees in their child’s PPF account in a financial year, the total deposit becomes 1.8 lakh rupees. But under PPF rules, only 1.5 lakh rupees will be considered valid. The excess deposit of 30 thousand rupees will neither earn interest at the PPF rate nor provide any tax benefits. The child can handle their account upon turning 18 Once the minor child turns 18, an application must be submitted to change the account status from minor to major. After this, the child, now an adult, can handle their account themselves. The maturity period is 15 years The PPF account matures in 15 years. If you wish, you can withdraw the entire amount after maturity. However, if you do not need the money, it can be extended in blocks of 5 years. It offers the benefit of tax exemption PPF falls under the EEE category of income tax. This means you get the benefit of tax exemption on the investments made in the scheme. Additionally, there is no tax to be paid on the interest earned from this scheme or on the entire maturity amount. Under the old income tax regime, a tax exemption can be claimed on investments of up to Rs 1.5 lakh annually under Section 80C. However, those opting for the new tax regime do not get this benefit of Section 80C. A large fund will be created easily Through this scheme, if you invest 1 thousand rupees every month, you will get 3 lakh 18 thousand rupees after 15 years. On the other hand, if you invest 2 thousand rupees per month, you will get 6 lakh 37 thousand rupees after 15 years. Learn here how much benefit you will get by investing in this. Who can open a PPF account? Any individual can open this account in their name at any post office or bank. Apart from this, the account can also be opened by another person on behalf of a minor.