Guides
Recurring Deposit for Children
Teach saving with a minor RD — who can open it, RBI’s rule for minors above 10, tax clubbing and better long-term alternatives.
Updated 29 September 2026Highest RD rate now
7.25%
Bandhan BankWhat you need to know
A parent or guardian can open an RD in a child’s name; under RBI directions of April 2025, minors above 10 years can also open and operate deposits independently within bank limits. Small instalments (₹100–₹500) help children learn the habit of saving.
Key rules
| Point | Details |
|---|---|
| Who can open | Guardian for any minor; minor above 10 on their own (bank limits) |
| KYC | Child’s birth certificate / Aadhaar + guardian’s KYC |
| Tax | Interest clubbed with the parent’s income (₹1,500 per child exempt) |
| At 18 | Convert to a regular account with the child’s KYC |
Better for long goals
| Option | Return | Notes |
|---|---|---|
| Sukanya Samriddhi (girl) | 8.2% | Tax-free; till 21 |
| PPF (minor) | 7.1% | Tax-free; 15 years |
| Index fund SIP | Market-linked | 10+ year goals |
Frequently asked questions
Can grandparents open an RD for a child?
Only a natural or court-appointed guardian can operate a minor’s account; grandparents can gift money to it.
For information and comparison only. Confirm rates and rules with your bank or post office.