Jul 272015

Guardian in PPF in case of minor account

A PPF account for a minor in India is very much possible, certainly with a clause that the account has to be maintained by operated by a legal guardian or the parent of the minor account holder.  A lot of people are often confused about the role of guardian in PPF account of a minor.  In this article, we would cover the various roles a guardian plays in PPF minor account and how the account could be operated by the guardian.

If you want to build a sustainable wealth for your child, Minor PPF Account is an excellent answer to it.  With this, you can keep saving whatever you have, for your child and thus accumulate a decent money by the time they grow up into mature individuals.

Guardian in PPF in case of minor account

Opening PPF account for minors

It is not only important to open a PPF account for your child but also important to know where to open the account.  Where you open the minor PPF account would make a lot of difference in the way you operate the account.

As a matter of experience from many, opening PPF account in State Bank of India is the best bet for many.  Although, you can open the account in any other bank of post offices, SBI seems to be a better option in long run due to the network and convenience provided by the bank.

The Role of Guardian in Minor’s PPF Account

The role of guardian is crucial in operating the PPF account.  Suppose, if you open a PPF account when your child is just 2 years of age and you want to open a PPF account for him/her, you would have to operate the account for the entire lock in period since the lock in period is a minimum of 15 years. By the time account matures, your child would still be just 17 years and not an adult.  In that case, you would have to run and operate the account and your child would just enjoy the benefits and proceeds of the account.

As a matter of fact, 17 would be the age when your child would need a lump sum amount for his/her higher education.  A lot many parents, thus open a PPF account when their child is an infant to ensure that they have a good chunk of money when their child grows into an adult and requires it for their higher education, settlement or for marriage.

The Role of guardian when child turns adult during the PPF tenure

If you open a PPF account for a minor who is 10 years old; the account could be handed over to the child once they turn 18 years.  This way, the guardian would have to operate the account on minor’s behalf for good 8 years and after that the guardian and hand over the operation of PPF account to the child, who would turn 18 years by then.

The role of guardian is crucial in opening of PPF account since the child is just a child and would not be aware when and where to secure their future.  It the guardians who should take proactive steps in opening a PPF account for their children and thus provide them a financial security when the children grow up into adults.  PPF account is also better for guardians as the contribution made towards minor account too is completely free from income tax under section 80C up to a maximum limit of 1.5 lakh.

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