Updated on October 4, 2023
A PPF account can be opened by a parent or guardian on behalf of a minor. The contributions to both the accounts (parent and minor) together in a year cannot exceed the maximum limit of contribution.
Important points to note about PPF account for minors
Here are some points to keep in mind regarding PPF accounts for minors:
Opening the Account: A parent or legal guardian can open a PPF account on behalf of a minor.
Operation of the Account: The account is operated by the parent/guardian until the minor turns 18, after which the minor can operate the account.
Deposit Limit: The combined deposit limit in the account of the minor and the guardian (who opens the account) cannot exceed INR 1.5 lakhs in a financial year.
Tax Benefits: Investments made in the minor’s PPF account also qualify for tax deduction under Section 80C of the Indian Income Tax Act.
Nomination: Nomination facility is not available if the account is opened on behalf of a minor.
Loan against PPF: The guardian can avail a loan against the PPF account from the third to sixth financial year. The loan amount will be capped at 25% of the balance at the end of the second year immediately preceding the year in which the loan is applied for.
Premature Closure: The premature closure of a PPF account is allowed after five financial years for specific reasons, such as treatment of life-threatening diseases for the account holder, spouse, dependent children or parents, or for higher education of the account holder.