PPF for child: Even if the average return is 7%, then in the end you will get Rs 27,86,658. In this case the investment period will be 50 years which is started at the age of 10 years of the daughter.
Open PPF account for child
Everyone worries about the future of the children. From education to marriage, you have to think about the expenses. There are also some parents who start investing for their child from childhood so that some money can be raised in old age. One such scheme is named Public Provident Fund or PPF. Opening a PPF account in the name of children can be a very good way. However, it has to be kept in mind that if you open a PPF account, keep depositing the same amount in it. Only then will it have the right maturity and only then will you get the benefit of investment.
It can be understood through an example. Suppose you have opened a PPF account in the name of 10 year old daughter. Started investing in this account with a deposit of Rs 500 (a little more than Rs 15 per day) every month. Later the daughter grew up and she also started putting a deposit of Rs 500 in PPF on her behalf. If this cycle continues for 60 years, a lot of money will be raised. Even if the average return is 7%, then in the end you will get Rs 27,86,658. In this case, the investment period will be 50 years which is started at the age of 10 years of the daughter.
understand with this example
Suppose that daughter joined a job at the age of 22 and deposited the first premium in the PPF account on her behalf. From the age of 22, the daughter started depositing Rs 1,000 every month. 500 rupees were put by his parents. The daughter has now taken this responsibility in her own hands. Accordingly, Rs 23,72,635 will be easily collected in terms of 7 percent on the daughter’s deposit.
In this case, the year of investment was only 38 years because that daughter has started investing Rs 1,000 from the age of 22. If we calculate, the daughter has to pay more money (Rs 1,000 instead of 500) as compared to the parents, but even after that the amount deposited on maturity has reduced. This is because of the duration of the investment. In this situation, only 38 years of money have been deposited. Whereas in the situation of parents 50 years money was accumulated.
open ppf account soon
To avoid this and to take maximum maturity amount, it is advisable to start a PPF account as soon as possible. However, there are many other conditions with PPF which should be taken care of in the context of minor children. Only one of the parents can open a PPF account for any of their minor children. Parents must be citizens of India. It is necessary to fill KYC in this. KYC is of the guardian with which the child’s photo is attached. Aadhar card or birth certificate can be given for the age proof of the child. To start a PPF account, a check has to be given as the initial payment.
way to save tax
The parents of the child can operate this PPF account till the child turns 18. The parent or legal guardian can deposit up to Rs 1.5 lakh in the child’s PPF in a year. However, minors can also link the child’s PPF account with the guardian’s account, whose limit will be Rs 1.5. This means that the PPF deposit amount of Rs 1.5 lakh can be divided between the parent and the minor child. This will help in saving tax.
read this also: Phones and SMS are also coming to you to get KYC done, so be careful, otherwise your bank account will be empty.