PPF for Children: In today’s world, every parent wants their child’s future to be secure. Saving for education, career, and future needs is now considered prudent. With this in mind, many parents open a PPF (Public Provident Fund) account in their child’s name. This is a government scheme that is completely secure and also offers tax benefits.
However, despite good intentions, people often fail to reap the full benefits due to small mistakes. In some cases, they don’t even receive interest, and the tax benefits are also lost. This is why it’s crucial to understand certain important points when opening a PPF account in a child’s name.
Only one PPF account can be opened in a child’s name
Many parents assume that they can open two separate PPF accounts in their child’s name at different banks, but this is against the rules. According to government regulations, only one PPF account can be opened in a child’s name across the entire country.
Furthermore, it’s important to note that only one parent can open this account. Both parents cannot open separate accounts. If this is done, the additional account will be considered invalid, and no interest will be paid on it.
Understanding the investment limit is crucial
The biggest mistake regarding PPF investments happens here. Many people think they can deposit ₹1.5 lakh in their own name and another ₹1.5 lakh in their child’s name, but this is not the case.
Furthermore, if the minimum amount is not deposited in any given year, the account may become inactive, requiring a penalty to reactivate it. Therefore, it is best to deposit the correct amount on time every year.
How to make the right decision for your children’s future
PPF can provide a strong foundation for your children’s future, provided it is managed correctly. This scheme is not only safe but also offers good returns in the long term. Investing with a proper understanding of the rules can be a great support for your child’s education and future needs.
If you want your child to avoid any financial difficulties in the future, you should definitely invest in PPF, but only after gathering complete information.
Disclaimer: This article is for general informational purposes only. The rules, interest rates, and terms and conditions related to PPF may change from time to time. Before investing, please obtain information from the relevant bank or the official government website or consult a financial advisor.
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