To open PPF account in the name of the child one has to tell about the previous PPF accounts in PPF form.
Kishore has a PPF account with SBI. It is more than 14 years old. Last year, he has opened a PPF account with the name of a 5-year-old son in HDFC Bank. In this, Kishore deposited Rs 1.5 lakh. This is over Rs 1.5 lakh deposited in his PPF account. They now feel that the PPF account of the son will be clubbed with them. In this case, what will happen to HDFC account? Can they withdraw money and close the account? If they continue this, will they get tax benefit or interest on this 1.5 lakh rupees or both?
Raj Khosla, founder and MD of Mymanantra.com, says that the limit for deposits in individual self accounts and minor accounts in one financial year is fixed at Rs 1.5 lakh. Accordingly, interest income and tax benefit is available for only Rs 1.5 lakh.
Invest the money by looking at these things, any transaction other than this amount should be rightly rejected by the bank. Kishore should contact HDFC Bank to get the additional transaction of 1.5 lakh rupees back in his account.
There is no responsibility of the bank in this. The reason is that in order to open PPF account in the name of the child one has to tell about the previous PPF accounts in PPF form. Teens can open an account for the child in the next financial year. They should ensure that they put at least 500 rupees in the account and add more than 1.5 lakh rupees in both accounts.