If you want to build a safe, tax‑free and long‑term fund for your child without taking stock market risk, the Post Office Public Provident Fund (PPF) is one of the most reliable options available. A minor PPF account in the child’s name lets you convert small yearly savings into a sizeable future corpus. By investing just ₹25,000 every year for 15 years, you can potentially build a corpus of around ₹6,78,035, which can be used for education, career or marriage.
In an environment where higher education, professional courses, overseas studies and weddings can easily run into several lakhs, starting early with a disciplined plan makes all the difference. A Post Office PPF account for children works exactly on this principle long tenure, compound interest and consistent yearly contributions that quietly grow into a large amount over time.
Post Office PPF for Children
| Point | Details |
|---|---|
| Scheme Name | Post Office Public Provident Fund (PPF) – Minor Account |
| Suitable For | Long‑term savings for children’s education, marriage and other big future goals |
| Account Holder | Minor (child), operated by parent/legal guardian |
| Tenure | 15 years, extendable in blocks of 5 years |
| Minimum Yearly Deposit | ₹500 per financial year |
| Maximum Yearly Deposit | ₹1.5 lakh per year (combined across guardian and minor PPF) |
| Example Deposit | ₹25,000 per year for 15 years |
| Approximate Maturity Amount | Around ₹6,78,035 at a representative PPF interest rate with annual compounding |
| Total Investment | ₹3,75,000 (₹25,000 × 15 years) |
| Approximate Interest Gain | About ₹3,03,035 as compound interest over the tenure |
| Tax Treatment | Section 80C deduction on investment, interest and maturity amount tax‑free |
| Risk Level | Very low, as it is a government‑backed small savings scheme |
What Is Post Office PPF For Children?
Post Office PPF for children is essentially the same Public Provident Fund scheme, opened in the name of a minor (child below 18 years). The account legally belongs to the child, but is opened and operated by a parent or legal guardian until the child becomes an adult.
Key points about this structure:
- The account holder is the child, but all transactions and signatures are handled by the guardian.
- The initial lock‑in period is 15 years, and later it can be extended in blocks of 5 years.
- Interest is compounded annually, so every year’s interest starts earning its own interest in subsequent years.
- The scheme offers strong tax benefits and government‑backed safety, ideal for conservative family planning.
How ₹25,000 Grows Into ₹6,78,035
- Many parents find it hard to believe that a modest contribution of ₹25,000 per year can grow into a corpus of around ₹6,78,035 in 15 years. The secret lies in compound interest and long‑term consistency.
- If you invest ₹25,000 every financial year into the Post Office PPF for your child, that amount earns interest each year. Because the interest is compounded annually, the interest itself gets added to the principal and starts earning additional interest in future years. This “interest on interest” effect keeps accelerating as the balance grows.
- Over 15 years, your total out‑of‑pocket contribution is ₹3,75,000, but thanks to compounding, the estimated maturity amount can reach around ₹6,78,035. In other words, more than half of the final corpus can come purely from compounded interest, which shows why PPF works so well as a long‑term savings vehicle for children.
How To Open A PPF Account In Your Child’s Name
Opening a minor PPF account is straightforward and can be done at a post office or any bank branch that offers PPF. The child must be a resident Indian, and the parent or legal guardian will act as the operator of the account.
Typical steps are:
- Visit a post office or eligible bank branch and fill the PPF account opening form in the child’s name, listing yourself as the guardian.
- Submit your KYC documents (such as Aadhaar, PAN, photograph) along with the child’s birth certificate or Aadhaar as age proof.
- Make an initial deposit (often ₹500 or more) by cash, cheque or transfer.
- Once the account is opened and a PPF number is allotted, you can continue depositing during the financial year in a single lump sum or in multiple instalments.
Keep these rules in mind:
- Only one PPF account is allowed per minor.
- A guardian can hold only one PPF account in their own name and operate minor accounts for their children.
- The combined annual contribution across the guardian’s own PPF and all minor PPF accounts cannot exceed ₹1.5 lakh.
Tax Benefits And Safety Features of Post Office PPF for Children
One of the biggest strengths of a PPF account is its tax‑free status and high safety. It belongs to the EEE (Exempt‑Exempt‑Exempt) category.
- Contributions made to PPF are eligible for income tax deduction under Section 80C, within the overall limit of ₹1.5 lakh per year.
- The interest credited to the PPF account is completely tax‑free.
- The maturity amount you receive at the end of the tenure is also fully exempt from tax.
For a family, this means that money invested in a child’s PPF account can reduce the parent’s taxable income today and still grow without tax drag for 15 years or more. On top of that, because this is a government‑backed small savings scheme, the risk of default is negligible. The corpus is protected from market crashes and volatility that affect equity or market‑linked products.
Why PPF Is Ideal For Children’s Future Goals
When you start a PPF account early in your child’s life, the 15‑year tenure aligns naturally with critical milestones like higher education or early career planning. By the time the account matures, the child is usually in the age bracket where funds are most needed.
The corpus can be used for:
- Undergraduate or postgraduate tuition fees
- Professional courses such as engineering, medicine, MBA or chartered accountancy
- Skill‑based programs or overseas study plans
- Wedding expenses or an initial contribution towards a home down payment
Although partial withdrawals are permitted under specific rules from the seventh year onwards, the real power of a Post Office PPF for children lies in letting the money stay untouched until maturity. The longer you allow compounding to work, the more impressive the final corpus becomes.
Is PPF Alone Enough For All Goals?
Realistically, PPF alone may not be sufficient to fund every single goal, especially if your target amounts are very high or you start late. However, it serves as a very strong “core layer” of your child’s financial plan.
Think of it this way:
- PPF gives guaranteed, tax‑free, low‑risk growth.
- It stabilises the overall portfolio and provides certainty.
- It is not affected by stock market swings or economic shocks in the same way as market‑linked products.
On top of this core, you can add equity mutual fund SIPs, recurring deposits, fixed deposits, or child insurance plans as per your risk appetite and goals. In that sense, the Post Office PPF for children becomes the foundation on which you build a more diversified, growth‑oriented investment strategy.
Power Of Discipline And An Early Start
The real magic of PPF is not just the interest rate; it is the combination of an early start and strict discipline.
- If you open the account when your child is very young, you give compounding 15 years or more to play out. Even a seemingly small amount like ₹25,000 a year becomes meaningful over that time frame. The key is to stay consistent: keep investing year after year, even when other expenses tempt you to pause.
- This habit does more than create money. It builds a savings culture in the family. As your child grows older, you can explain how their PPF account works and show them the growing balance. That practical exposure to long‑term investing and delayed gratification is a powerful financial lesson in itself.
FAQs on Post Office PPF for Children
1. Can every child have a separate PPF account?
Yes. Each resident Indian minor can have one PPF account in their own name, operated by a parent or legal guardian. If you have two children, you can open one PPF account for each of them, subject to the overall contribution limit.
2. Is it compulsory to invest exactly ₹25,000 per year?
No. ₹25,000 is just an example used to illustrate how the corpus can grow. You can invest any amount between ₹500 and ₹1.5 lakh per financial year. You may start lower and increase the yearly contribution as your income grows.
3. Is the maturity amount from a minor’s PPF account completely tax‑free?
Yes. The interest earned and the amount received on maturity from a PPF account are fully exempt from income tax, regardless of whether the account is in the name of an adult or a minor.
4. What if money is needed before 15 years for an emergency?
Partial withdrawals are allowed from the seventh year onwards under certain conditions and limits. However, for a child’s future goals, it is usually better to avoid touching the PPF balance unless there is a genuine emergency.
