When it comes to safe investment products in India, a fixed deposit is one of the most popular options. These deposits allow you to invest money for a tenure of your choice and offer a fixed interest rate and guaranteed returns.
There are many different types of deposits available in the country, ensuring that everyone can benefit from them. An example of it is the fixed deposit schemes for children that enable young Indians financially secure their future.
These are identical to regular deposits but come with some added benefits and regulations. Read on to know more about these financial products.
How fixed deposits for children work
Most banks offering fixed depositsfor children only allow a parent or guardian to open the account on a child’s behalf. They are responsible for managing the account until the child turns 18 years old or the plan matures. There are a few deposits for children that also include the additional benefit of an insurance policy. However, the fixed deposit interest rates for children depend on the product and the bank chosen.
Banks offering fixed deposit schemes for children
While most banks only allow a guardian to invest on behalf of a child, a few banks in India let a minor open an account, too. Parents can always invest in regular fixed deposits(FDs)with the condition that their children will be responsible for the account when they reach maturity age. But FDs created especially for minors have extra advantages, such as discounts for children. Some banks in India offering such deposits for children include:
- Bank of India
- HDFC Bank
- Canara Bank
Apart from these, the following two banks offer special schemes for children in India.
- Allahabad Bank Sishu Mangal FD scheme
This scheme has been available since 1988. The FD eligibility criterionfor this option requires the child to be aged between 1 and 15 years. Moreover, this financial product allows only guardians to invest a predetermined amount in the account and pays the interest until maturity.
- PNB Balika Shiksha Scheme
PNB offers this scheme to only girl children who have passed the 8th grade. However, students from Central Government schools and unaided private schools cannot invest in the scheme. Interest earned from this scheme is tax-exempted, allowing the children to have access to the entire fund when they turn 18 years old.
Before you invest on your child’s behalf, ensure the deposit offers the maximum benefits and safety. You may consider Fixed Deposit by Mahindra Finance as they have an ‘FAAA’rating from Credit Rating Information Services of India Limited (CRISIL), guaranteeing maximum security. Visit their website today to invest.
Raj Kumar is a qualified business/finance writer expert in investment, debt, credit cards, Passive income, financial updates. He advises in his blog finance clap.