Planning early for your child’s future is one of the smartest financial decisions you can make. A Fixed Deposit (FD) for children is a safe and guaranteed way to build funds for education, higher studies, or other long-term goals.

In this guide, let’s understand the types of child FDs, key benefits, and the step-by-step process to open one in 2026.

What is a Fixed Deposit for Children?

A Child Fixed Deposit is an FD opened in the name of a minor (below 18 years), usually managed by a parent or legal guardian.

• The child is the primary account holder.
• The parent/guardian operates the FD until the child turns 18.
• Returns are guaranteed as per the bank’s interest rates.

Quick Summary – Child FD at a Glance

Particular	Details
Who Can Open	Parent or legal guardian
Age Limit	Below 18 years
Tenure	7 days to 10 years (can extend till the child turns 18)
Minimum Deposit	₹1,000 – ₹10,000 (bank dependent)
Interest Rate	Similar to regular FD rates
Risk Level	Very low

Types of Fixed Deposits for Children

Regular Minor FD

• Opened in the child’s name.
• Operated by a guardian.
• Fixed tenure and fixed interest rate.

Best for: Short- or medium-term savings goals.

Cumulative FD for Children

• Interest compounded and paid at maturity.
• Helps grow savings faster.

Best for: Long-term goals, such as higher education.

Non-Cumulative FD

• Interest paid monthly/quarterly.
• Can be credited to the guardian’s account.

Best for: Supplementing family income.

Tax Saving FD (In Minor’s Name)

• 5-year lock-in.
• Eligible for Section 80C deduction (guardian can claim).
• Interest is taxable.

Best for: Tax planning + long-term savings.

Benefits of Fixed Deposit for Children

Guaranteed Returns

FD offers fixed interest rates with no market risk.

Safe Investment Option

Regulated by RBI with DICGC insurance up to ₹5 lakh per depositor per bank.

Disciplined Savings

Encourages long-term financial planning for the child’s future.

Flexible Tenure Options

Choose tenure based on the child’s age and financial goal.

Loan Against FD

Some banks allow a loan facility against a minor FD (guardian-operated).

Example – Child FD Growth

If you invest ₹1,50,000 for 5 years at 8% (cumulative option):

• Estimated Interest Earned: ₹70,000 – ₹75,000
• Maturity Amount: Around ₹2,20,000 – ₹2,25,000

Actual returns depend on compounding frequency and bank policy.

Eligibility Criteria

✔ Child must be below 18 years
✔ Parent or legal guardian required
✔ Minor savings account may be required (bank dependent)

Once the child turns 18, the FD operation rights transfer to them.

Documents Required

For opening an FD for a child:

• Child’s Birth Certificate
• Aadhaar Card (child and guardian, if available)
• PAN Card of the guardian
• Address Proof
• Passport-size photographs
• Minor account details (if applicable)

Documents may vary by bank.

Steps to Open a Fixed Deposit for a Child

Method 1: Visit Bank Branch

1. Open a minor savings account (if required).
2. Fill the FD application form.
3. Provide guardian and child KYC documents.
4. Deposit a lump sum amount.
5. Receive the FD receipt.

Method 2: Through Net Banking (If Minor Account Exists)

1. Log in to Guardian’s net banking.
2. Select child/minor account.
3. Go to Open Fixed Deposit.
4. Enterthe deposit amount and tenure.
5. Confirm nominee details.
6. Submit using OTP.

FD confirmation will be generated instantly.

Taxation Rules in 2026

• Interest earned is taxable.
• Income may be clubbed with parents’ income (as per tax rules).
• Tax-saving FDs qualify under Section 80C (up to ₹1.5 lakh per financial year).
• TDS may apply if interest exceeds the prescribed limits.

Consult a tax advisor for clarity on clubbing provisions.

What Happens When Child Turns 18?

• Minor account becomes a major account.
• Fresh KYC may be required.
• FD operation rights transfer to the child.
• Guardian loses operating authority.

Frequently Asked Questions (FAQs)

Conclusion

A Fixed Deposit for children in 2026 is a safe and reliable way to build funds for education, marriage, or future financial needs. With guaranteed returns and flexible tenure options, it helps parents plan ahead without taking market risks.

Before investing, always compare FD rates across banks and choose a tenure aligned with your child’s future goals.