Planning the Best Future for Your Child
There are many workshops, courses and programs for kids to learn about money, finance and business. This is because they are usually not included in the regular school curriculum.
There are many ways in which you can plan for your children’s future. One of these is the way in which if you invest in regularly your child will become a millionaire before his marriage. Yes, this account is PPF.
What is PPF
Public Provident Fund or PPF is a small savings scheme of the post office. It also gives you tax benefits under section 80C.
It is considered best if you want to save for a long period. Investment in this, interest earned on it and maturity amount are all tax free. PPF is one of the safest investment options that will fetch you 7.1 per cent returns currently.
No Minimum Age
There is no minimum age prescribed for opening PPF account. But the PPF account of a minor can be managed on his/her behalf only by his/her parent or guardian till the account holder attains the age of 18 years.
PPF account cannot be opened jointly. When the minor turns 18, he/she can operate the account independently.
Investment Amount Limit
In a financial year, the minimum contribution to a PPF account is Rs 500 and the highest investment amount is Rs 1.5 lakh.
The account can be started with as little as Rs.500. After this, you can comfortably deposit any amount in multiples of Rs.50.
Keep in mind that the account in which the minimum required amount is not deposited every year, then it will be considered closed. A customer of a closed account shall not be eligible to open a new account unless the closed account is closed after maturity.
How to Open PPF Account for Minor
- First go to the bank and fill Form 1
- Present a valid proof of address such as passport, voter ID, ration card etc.
- A valid identity proof will also be required. These include voter ID card, passport, Aadhaar, driving license etc.
- Birth certificate of minor child has to be provided
- Provide passport size photo
- Deposit a check of Rs 500 or more as initial deposit
- Such a child will become a millionaire
Now we know its method. According to the PPF calculator, first of all you have to invest for 30 years.
That is, if you start immediately after the birth of a child, you can easily deposit Rs 1 crore in 30 years. Then at the age of 30 he can get married.
The second question is how much you have to invest annually. Annually you have to invest Rs.99000. You can also make these investments on a monthly, quarterly, half-yearly basis.
But the total investment in the year should be Rs.99000. At the current rate of 7.1 per cent, after 30 years you will have Rs 1.01 crore in hand.
The investment in this would be Rs 29.70 Lakhs and the return amount would be Rs 72.27 Lakhs. If the rate of interest increases later on, then the child can become a millionaire before the age of 30.
