Learn how to open a PPF account for your child and build ₹1 crore by their 18th birthday. Includes contribution strategies, tax benefits, and realistic projections.
Want to give your child a financial head start? A PPF account opened at birth can grow to nearly ₹1 crore by the time they turn 18.
Here's how to make it happen with the power of early starting and consistent contributions.
Why PPF for Children?
Key Benefits
| Benefit |
Details |
| Government guaranteed |
Zero risk on principal |
| Tax-free returns |
EEE status (exempt at all stages) |
| Compounding period |
15+ years of growth |
| Financial discipline |
Forced savings for child |
| Parent's control |
You manage until child is 18 |
Calculate your child's PPF growth: Use our PPF Calculator.
PPF vs Other Options for Children
| Option |
Returns |
Risk |
Tax |
Lock-in |
| PPF |
7.1% |
Zero |
Tax-free |
15 years |
| Sukanya Samriddhi |
8.2% |
Zero |
Tax-free |
Till marriage/21 |
| Child ULIP |
5-8% |
Moderate |
Partial |
5 years |
| FD in child's name |
6-7% |
Zero |
Taxable |
Flexible |
| SIP in child's name |
12-14% |
High |
12.5% LTCG |
None |
PPF is one of the safest options for building long-term wealth for children.
Opening PPF for Your Child
Eligibility
| Requirement |
Details |
| Child's age |
Any age (even newborn) |
| Who can open |
Parent or legal guardian |
| Limit |
One PPF account per child |
| Family limit |
Combined ₹1.5 L for all PPF accounts |
Documents Required
| Document |
Purpose |
| Child's birth certificate |
Age proof |
| Child's Aadhaar (if available) |
Identity |
| Parent's ID proof |
Guardian verification |
| Parent's address proof |
KYC |
| Passport photos |
Account opening |
Where to Open
| Location |
Pros |
Cons |
| Post Office |
Accessible everywhere |
Manual processes |
| SBI |
Good digital access |
May need branch visit |
| Other PSU banks |
Convenient if existing account |
Varies |
| Select private banks |
Digital-friendly |
Limited banks offer |
Recommended: SBI or Post Office for reliability.
The ₹1 Crore Plan
Scenario 1: Start at Birth, Max Contribution
₹1.5 L/year from age 0
| Year |
Age |
Cumulative Deposit |
Balance (7.1%) |
| 1 |
0 |
₹1.5 L |
₹1.61 L |
| 5 |
4 |
₹7.5 L |
₹9.28 L |
| 10 |
9 |
₹15 L |
₹22.31 L |
| 15 |
14 |
₹22.5 L |
₹40.68 L |
| 18 |
17 |
₹27 L |
₹54.87 L |
18 years of max contribution = ₹55 L (at current 7.1% rate).
Scenario 2: Start at Birth, Extend to 23
PPF can be extended in 5-year blocks after 15 years
| Period |
Age |
Cumulative Deposit |
Balance |
| Initial 15 years |
0-14 |
₹22.5 L |
₹40.68 L |
| Extension 1 (with ₹1.5L/year) |
15-19 |
₹30 L |
₹60.15 L |
| Extension 2 (with ₹1.5L/year) |
20-24 |
₹37.5 L |
₹85.43 L |
23 years of max contribution = ₹85 L+
Scenario 3: Higher Rate Assumption (8%)
Historical PPF rates were 8%+. If rates return higher:
| Period |
At 7.1% |
At 8% |
Difference |
| 18 years (₹1.5L/year) |
₹54.87 L |
₹62.58 L |
+₹7.71 L |
| 23 years (₹1.5L/year) |
₹85.43 L |
₹1.02 Cr |
+₹16.57 L |
At 8% rate, ₹1 crore is achievable in 23 years.
Contribution Strategies
Strategy 1: Maximum from Day One
| Year |
Monthly |
Annual |
Best For |
| All years |
₹12,500 |
₹1.5 L |
High earners |
Maximum compounding benefit.
Strategy 2: Gradual Increase
| Child's Age |
Annual Contribution |
Reasoning |
| 0-5 |
₹50,000 |
Building the habit |
| 6-10 |
₹1,00,000 |
As income grows |
| 11-15 |
₹1,50,000 |
Maximum |
| 16-18 |
₹1,50,000 |
Final push |
Total: ₹16.5 L over 18 years
| Strategy |
Total Deposited |
Corpus at 18 (7.1%) |
| Max from day one |
₹27 L |
₹54.87 L |
| Gradual increase |
₹16.5 L |
₹31.20 L |
Starting high is better due to compounding.
Strategy 3: Lumpsum When Available
| Event |
Amount |
Impact |
| Bonus |
₹1 L |
Add to that year's PPF |
| Gift from grandparents |
₹50 K |
Direct to PPF |
| Tax refund |
₹30 K |
Add to PPF |
Any windfall can boost the corpus.
Tax Benefits and Considerations
Who Gets 80C Benefit?
| Scenario |
80C Benefit To |
| Parent deposits to child's PPF |
Parent (within overall ₹1.5 L limit) |
| Both parent and child have PPF |
Combined limit ₹1.5 L for family |
Important: Parent's own PPF + Child's PPF = Combined ₹1.5 L limit for 80C.
Interest Taxation
| Phase |
Tax Treatment |
| During accumulation |
Tax-free |
| At withdrawal |
Tax-free |
| Interest earned |
Tax-free |
Complete EEE status - no tax at any stage.
Clubbing Provisions
| Child's Age |
Interest Taxable To |
| Minor (< 18) |
Parent (but PPF interest is exempt anyway) |
| Adult (18+) |
Child (still exempt) |
PPF interest is exempt regardless of clubbing rules.
When Your Child Turns 18
Options at Maturity (Age 15)
| Option |
Action |
| Extend with contributions |
Continue ₹1.5 L/year deposits |
| Extend without contributions |
Let balance grow at PPF rate |
| Withdraw fully |
If goal is achieved |
| Partial withdrawal |
Take some, let rest grow |
Transfer to Child
| At Age 18 |
Action |
| Account automatically transfers |
To child's control |
| Parent no longer authorized |
Child operates |
| Child can continue/close |
Their choice |
Combining PPF with Other Investments
Optimal Child Portfolio
| Investment |
Allocation |
Purpose |
| PPF |
40% |
Safe, tax-free base |
| Equity SIP |
50% |
Higher growth |
| Gold (SGB) |
10% |
Diversification |
₹1 Crore by 18: Hybrid Approach
| Investment |
Monthly |
Expected Return |
Value at 18 |
| PPF |
₹7,500 |
7.1% |
₹32 L |
| Equity SIP |
₹7,500 |
12% |
₹68 L |
| Total |
₹15,000 |
|
₹1 Cr |
Hybrid approach achieves ₹1 Cr with reasonable contributions.
Special Situations
Grandparent Contributions
| Scenario |
Process |
| Grandparents want to contribute |
Gift money to parent, parent deposits |
| Direct deposit by grandparents |
Not allowed (only guardian can deposit) |
Multiple Children
| Situation |
Strategy |
| 2 children |
₹75K each, within ₹1.5 L family limit |
| Want more for each |
Use equity SIP for balance |
Single Parent
| Consideration |
Solution |
| Income constraints |
Start with whatever possible (min ₹500/year) |
| 80C competition |
Prioritize child's PPF if own retirement covered |
Common Mistakes
1. Starting Late
| Start Age |
Max Contribution Years (till 18) |
Corpus at 18 |
| 0 |
18 years |
₹54.87 L |
| 5 |
13 years |
₹35.22 L |
| 10 |
8 years |
₹17.53 L |
Every year of delay costs lakhs.
2. Inconsistent Contributions
| Pattern |
Impact |
| ₹1.5 L for 5 years, then stop |
Loses future compounding |
| ₹50 K consistently for 18 years |
Better than sporadic max |
Consistency beats sporadic high contributions.
3. Not Using Full Limit
| Annual Deposit |
18-Year Corpus |
| ₹50,000 |
₹18.29 L |
| ₹1,00,000 |
₹36.58 L |
| ₹1,50,000 |
₹54.87 L |
Max out when possible.
4. Forgetting to Deposit (Account Becomes Inactive)
| Situation |
Consequence |
Solution |
| No deposit for a year |
Account becomes inactive |
Deposit minimum ₹500 + ₹50 penalty |
Set annual reminder for at least ₹500 deposit.
Withdrawal Rules
Before Maturity
| Condition |
Withdrawal Allowed |
| After 7 years |
50% of Y5 balance |
| For child's education |
Partial withdrawal |
| For illness |
Partial withdrawal |
At Maturity (15 Years)
| Option |
Process |
| Full withdrawal |
Submit form, receive entire balance |
| Extension (5 years) |
Form for continuation |
| Partial withdrawal |
Take portion, continue rest |
Realistic Projections
Conservative (7% Rate)
| Contribution |
15 Years |
18 Years |
23 Years |
| ₹1.5 L/year |
₹38.3 L |
₹51.7 L |
₹80.1 L |
| ₹1 L/year |
₹25.5 L |
₹34.5 L |
₹53.4 L |
| ₹50 K/year |
₹12.8 L |
₹17.2 L |
₹26.7 L |
Optimistic (8% Rate)
| Contribution |
15 Years |
18 Years |
23 Years |
| ₹1.5 L/year |
₹43.5 L |
₹62.6 L |
₹1.02 Cr |
| ₹1 L/year |
₹29 L |
₹41.7 L |
₹68.1 L |
Conclusion
| Goal |
Strategy |
| ₹50 L by 18 |
₹1.5 L/year in PPF from birth |
| ₹75 L by 18 |
₹1.5 L PPF + ₹5K SIP |
| ₹1 Cr by 18 |
₹1.5 L PPF + ₹7.5K SIP |
| ₹1 Cr by 23 |
₹1.5 L/year PPF, extend |
Key actions:
- Open PPF account as soon as child is born
- Contribute maximum (₹1.5 L) if possible
- Deposit before 5th of April for max interest
- Set annual reminders for minimum deposit
- Plan to extend beyond 15 years if needed
- Combine with equity SIP for ₹1 Cr goal
Starting your child's PPF account at birth is one of the best financial gifts you can give. The combination of government guarantee, tax-free returns, and 18+ years of compounding is powerful.
Plan your child's PPF: Use our PPF Calculator to see exactly how the corpus grows over time.
