PPF Minor Account: Public Provident Fund (PPF) account is generally considered an investment that is meant for retirement purposes. However, it can be used for other investment goals as well. For example, its maturity period is 15 years. So, if there is a new-born at your home, you can gift the baby a PPF Minor Account in which you can invest up to 15 years when the baby grows up and would be gearing up for its higher studies.
Speaking on the PPF Minor Account and its benefits Manikaran Singhal, a SEBI registered tax and investment expert said, “PPF Minor Account can be opened with Rs 100 investment at any of the post office or an authorised bank’s branch. The investor will have all income tax exemption luxuries that he or she would be enjoying in its own PPF account. The PPF Minor Account investor will get income tax exemption under 80C, all PPF Account interest and its maturity amount after PPF withdrawal will be 100 per cent income tax exempted.”
On how does a PPF Minor Account can be used to create funds for higher studies of your child Jitendra Solanki, a SEBI registered tax and investment expert said, “One can open a PPF Minor Account within 3 years of his or her child’s birth. After investing for 15 years, the child would be maximum of 18 years, when he or she would be gearing up for his or her higher studies. Suppose, someone invests Rs 1.5 lakh per annum in the PPF Minor Account, then assuming the average PPF interest rate at 8 per cent per annum in this period, the maturity amount after 15 years will be Rs 43,98,642, which can be a good amount to meet the financials for higher studies of the child.”