PPF for children: Key rules parents should know

Published 1 July 2026 · india

For most parents, saving for a child's future begins long before the child even starts schooling. Whether the goal is funding higher education, supporting a

For most parents, saving for a child's future begins long before the child even starts schooling. Whether the goal is funding higher education, supporting a wedding, or creating a financial cushion for adulthood, the earlier parents start investing, the more time compounding has to work. Among the many investment options available, the Public Provident Fund (PPF) remains a popular choice because of its attractive interest rate, government backing, tax benefits and long investment horizon. But many parents are unsure whether they should open a separate PPF account for their child. Experts say a child's PPF account can be an effective long-term savings tool, provided parents understand the rules before investing. How can parents open a PPF account for their child? Here's who is eligible A PPF account can be opened in the name of a minor, but it cannot be operated independently by the child. “A PPF account can only be opened and operated by the child's parent or legal guardian. Only one guardian can operate one PPF account for the same child at a time, implying that both parents cannot operate separate PPF accounts for the same minor,” says Swati Jain, CEO – Wealth at Arihant Capital Markets, This means both parents cannot separately operate two PPF accounts for the same child, even if they bank with different institutions. Grandparents also cannot open a PPF account for their grandchild unless they have been legally appointed as the child's guardian. What are the benefits of opening a PPF account for children ET Online Who gets the tax deduction?

For many families, the biggest attraction of a PPF account is not just safety but time. Since the scheme comes with a 15-year maturity period, money invested during a child's early years has a long runway to benefit from compounding. The long lock-in encourages disciplined investing and helps parents gradually build a corpus for major milestones such as higher education, marriage or other long-term financial goals, says Jain. Another advantage is its tax treatment. “One of the most compelling benefits is the tax benefit under the EEE regime, any contributions made qualify for deduction of up to ₹1.5 lakh per financial year as per Section 80C of the Income Tax Act under the old tax regime. However, this 80 C deduction is not available in the new regime,” she adds. Moreover, the interest rate offered on PPF is very attractive and often higher than the interest rates offered on fixed deposits by many banks. The current interest rate on EPF is 7.1%. How does the ₹1.5 lakh PPF limit work if you have more than one child? Many parents assume that each child gets a separate annual investment limit of ₹1.5 lakh. But that is incorrect. “The ₹1.5 lakh annual contribution limit is not available separately for each child's PPF account. Instead, it applies to the total amount a parent deposits in their own PPF account and the PPF accounts of all their minor children for whom they are the guardians,” says CA Abhishek Soni, CEO and Co-founder of Tax2win.