Fixed Deposit For Children

The rising costs of education and medical treatment coupled with growing lifestyle conditions have prompted many parents to start saving aggressively. Child FD plans are the perfect fix for someone looking for safer alternatives and more long-term financial instruments to grow a corpus. Several government-backed fixed deposit schemes for children are available in the market in addition to standalone schemes offered by banks in India.

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Best Child Saving Plans
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  • Invest ₹10k/month and your child gets ₹1 Cr tax free*

  • Save upto ₹46,800 in tax under Section 80(C)

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Invest ₹10k/month your child will get ₹1 Cr Tax Free*

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Child FD Plans

FD plans help you secure your savings in a bank and earn interest on the same. Your savings increase as per the rate of interest, which you can withdraw on the date of maturity of the FD tenure. The guaranteed returns make this a safe investment vehicle and are therefore largely favored by those with an appetite for low risk. 

Parents of minors can now open an FD account on behalf of their children to save and consequently grow a corpus for them. These savings can give the right financial impetus to a child’s dreams and aspirations. Once the child attains the age of 18, or upon maturity, the child can take ownership of the account and are eligible to use the funds as they please. 

Popular fixed deposit savings schemes for children are: 

  1. FD Account under Guardianship for Minors

    Leading banks of India offer fixed deposit schemes for children. Parents can open an FD account for their kids in any of these banks to save for their future education or other expenses. Examples of banks offering FD schemes for children are:

    Name of the Bank FD Interest Rate
    HDFC Bank 2.50% to 5.60%
    Bajaj Finserv 5.65% to 6.80%
    SBI  2.90% to 5.50%
    Yes Bank  3.25% to 6.25%
    Bank of India 2.85% to 5.05%
    Canara Bank 2.90% to 5.50%
  2. Allahabad Bank Sishu Mangal Deposit Scheme

    This account can be opened by a parent for a child in the age bracket of 1-15 years. There is no maximum limit to the amount that one can deposit. The interest continues to accrue till the child reaches the age of 21. The rate of interest shall be as per the latest figures declared by the Allahabad Bank. 

  3. PNB Balika Shiksha Fixed Deposit Scheme

    This is an FD scheme specifically designed for girl children. The deposit amount under this scheme only matures on the completion of 18 years by the girl. One cannot withdraw the sum prematurely. Any girl who has completed the 8th standard of their secondary school education and is enrolled in a State, Union Territory, or a Government-aided school is entitled to open an account under this scheme.

Why Invest In A Fixed Deposit Scheme For Children?

The following benefits of investing in child FD plans are what appeals to parents of growing children. 

  • High FD Interest Rates - Fixed deposits for children can earn you anywhere between 4% to 7% interest. Further, the FD interest rate compounds annually resulting in a higher sum on maturity. 

  • Flexibility in FD Tenure - Most FD schemes for children come with the flexibility of choosing the tenure, which is generally extendable up to 10 years. It is advisable to pick a longer tenure to enjoy the benefits of compounding. 

  • Guaranteed Returns - The returns from an FD account are guaranteed. There are no surcharges incurred at the time of withdrawing the maturity sum. The entire sum is paid to the beneficiary (the child in this case) as a lump sum payout. 

  • Low Deposit Amount - The minimum deposit amount is not significant enough that burns a hole in your pocket. With some child fixed deposit plans, you can even opt for a monthly systematic investment option.

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Nothing is more important than securing your child's future

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