Parents and guardians can open fixed deposits in the name of their children to build a corpus for future expenses such as education or marriage. The deposit is held by the guardian until the minor turns 18.
| Feature | Details |
|---|---|
| Eligibility | Parents/guardians can open an FD on behalf of a minor |
| Tenure | Same as regular FDs; typically 1–10 years |
| Interest rate | Usually the same as a regular FD for the selected tenure |
| Minimum deposit | Varies by bank, often from ₹1,000 |
| Taxation | Interest is clubbed with parent’s income; TDS applies |
Benefits
- Goal-oriented savings: Helps parents save for education or other milestones.
- Disciplined investment: Funds are locked for the chosen tenure, instilling a saving habit.
- Nomination facility: You can nominate a beneficiary for the deposit.
When the child attains majority, the FD can be transferred to their name. Always check the bank’s policies, as some institutions may have special schemes for minors.
