Fixed Deposit Beginner

Fixed deposit accounts for children: Starting early for a better future

fixed deposits for children

Fixed deposit accounts for children are an excellent investment option for parents who want to secure their child’s financial future. Parents can build a substantial corpus for their child’s education, marriage, or future financial needs by starting early. A fixed deposit for a child offers higher interest rates than regular savings accounts. The investment also instills the habit of saving in children and helps them understand the value of money. With flexible investment tenures and customization options, fixed deposit accounts for children can be tailored to suit individual needs and preferences.

FD schemes for child

Fixed deposit allows children to build a corpus from a very young age. Various banks and financial institutions offer these schemes, allowing parents to invest a certain amount of money for a fixed period, typically one to 10 years. Since parents make investment decisions on behalf of their kids, they must select the right scheme.

Types of child fixed deposit plans

Parents can choose between various fixed deposits for children. Essentially, these are long-term fixed deposits that offer a fixed interest rate and a guaranteed return on investment over a specified period. Various types of child fixed deposit plans are available in the market, such as monthly income schemes, cumulative fixed deposits, and tax-saving fixed deposits. Monthly income schemes allow parents to receive monthly payouts, while cumulative fixed deposits provide a lump sum at maturity. Tax-saving fixed deposits offer tax benefits under Section 80C of the Income Tax Act. Here are some of the popular schemes.

a.) PNB Balika Shiksha Scheme

PNB Balika Shiksha Scheme is a government initiative aimed at promoting the education of girl children in India. Launched by the Punjab National Bank and the Ministry of Women and Child Development, the scheme provides financial assistance to families who cannot afford their daughters’ education.

Under this scheme, a girl child who has passed Class 8 and enrolled for Class 9 in designated schools, excluding central government-run and private unaided schools, can apply for this fixed deposit scheme. The government of India would deposit ₹3,000 in the name of the eligible child, which she can withdraw upon reaching 18 years of age. The scheme seeks to encourage parents to send their daughters to school and ensure that they receive a quality education.

b.) Guardian Associated Scheme

Very few banks in India have fixed deposit schemes designed exclusively for minors. However, most of them allow opening FDs if guardians manage the accounts. The arrangement works like this: While the guardian manages the account, the minor takes charge on turning 18. Popular banks such as Canara Bank, HDFC Bank, and Indian Bank allow children to open fixed deposit accounts.

c.) Allahabad Bank Sishu Mangal Scheme

Allahabad Bank’s Sishu Mangal deposit scheme, launched in 1988, is specially designed for the welfare of children. The Allahabad Bank ceased to exist following its merger with Indian Bank in 2020.

Who is eligible for the FD for children?

Fixed deposit for children is a reliable investment option that parents can consider for their child’s future. Any individual, including parents or legal guardians, can open an FD account on behalf of a child, provided they have the necessary documentation, such as the child’s birth certificate and identity proof. The minimum age for opening an FD account varies from bank to bank, but most banks allow parents to open an account for their child as young as one day old.

Benefits of fixed deposit for child

Fixed deposit for children is an investment tool parents can use to secure their children’s financial future. It offers various benefits, making it an attractive option for parents looking to save for their child’s education, marriage, or other expenses.

  • FDs offer guaranteed returns with no risk involved.
  • The interest rate on fixed deposits for children is usually higher than on regular savings accounts.
  • FD helps inculcate a savings habit in children.
  • It has flexible tenure options and can be customized to meet specific financial goals.
  • Finally, it offers tax benefits, making it an efficient investment option.

How to start an FD for children?

Starting an FD for children is a great way to secure their future. It’s a simple investment option that guarantees the deposited amount’s return. One can open an FD for a minimum period of 7 days to up to 10 years. The investment is safe, and the principal amount remains intact, ensuring financial security for the child. Opening an FD account for your child is easy, and most banks offer online account opening facilities. It’s a smart investment option that ensures your child’s financial stability in the long run.

How to withdraw the FD for children?

Withdrawing a fixed deposit for children can be straightforward if you follow the steps. Before starting, it’s essential to check the terms and conditions of your FD account to understand the penalties or charges for early withdrawal. Once you’re ready to withdraw, you can visit the bank branch where you opened the account or use internet banking to initiate the withdrawal. Remember that you must provide valid identification and the necessary account details.


Starting a fixed deposit for children early can give them a better financial future. These accounts offer a safe and stable way to grow savings, with higher interest rates than traditional savings accounts. Parents can teach their children valuable lessons about saving and investing by locking in funds for a fixed period. Comparing rates and terms from different banks is crucial to find the best option. With compound interest and long-term planning benefits, FDs can help young people achieve their financial goals and build a strong foundation for their future.


Which bank is best for fixed deposit for childrens?

Yes Bank offers attractive fixed deposit schemes for children, providing flexible tenures and features. SBI Child Plan Fixed Deposit is also noteworthy for its competitive interest rates.

How to do fixed deposit for kids?

To open a fixed deposit for kids, choose a bank offering child FD schemes like Yes Bank or SBI. Provide necessary documents, including KYC, and deposit the desired amount.

Can a minor invest in FD?

Yes, minors can invest in fixed deposits. Banks like HDFC, Canara, and Bank of India offer this facility. The process is easy, requiring officially valid documents (OVD).

Can a minor have a FD in SBI?

Yes, minors can have fixed deposit accounts in SBI. Parents can open accounts in the name of their minor children to invest in fixed deposits.

Disclaimer: Fixed deposit products are generally considered safe investments as they are not subject to market fluctuations. However, investors are advised to exercise caution while investing in FDs. Risks include the financial position and solvency of the issuing company/entity during the tenure of the deposit. The facts mentioned in this article are for informational purposes only and should not be considered investment/financial advice from CoinSwitch.

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