PPF [Public Provident Fund] is a first-class popular scheme for investment. It is considered a pure safe investment. The reason for the popularity of PPF is also the attractive interest rate available in it. Along with good interest rate, tax exemption is also available through this. The maximum limit for investment in a PPF account in a financial year is Rs 1.5 lakh. But do you know that you can also open a PPF account for your minor baby. A person can open one account in his own name and another account in the name of the child.
Open account with small amount
You can open PPF account with just Rs.500 and can invest worth up to a maximum of Rs 1.5 lakh on annual basis in your PPF account. On maturity, its lockin period can also be extended by 5-5 years. If you open an account in the name of your child, then you can maintain the Guardian account till 18. After attaining the age of 18 years, the child can also take care of the PPF account.
Why PPF Account Beneficial?
PPF account is a long term investment. Its investment life is 15 years. If you open a PPF account in the name of toddler at the very beginning, then you will get the maturity amount when he is a minor. It can be used for his higher academic education.
Deadline can be extended
There is one more benefit available on opening a PPF account. Account holders can extend the time limit of their PPF account by five years. During this, the investor can also invest if he wants, or else he can also maintain the maturity amount. He will get the benefit of interest on increasing the locking period.
Moreover you can avail tax exemption through PPF account. Anyone can show PPF account under section 80C. In this, not only the interest is tax free, but the maturity amount is also tax free.