Investing in a fixed deposit for children is a crucial aspect of financial planning that paves the way for a secure and prosperous future. As parents, guardians, or well-wishers, fostering financial stability and independence for the younger generation is a responsibility that goes beyond immediate needs.


An FD tailored for children serves as a strategic tool to build a solid financial foundation, ensuring a myriad of benefits ranging from educational expenses to unforeseen circumstances.


This proactive approach not only shields children from financial uncertainties but also empowers them to confidently navigate the challenges of adulthood with a tangible nest egg. In this article, we will delve into the manifold reasons why a fixed deposit for children is an indispensable component of a comprehensive financial plan.

Why Invest in Fixed Deposit for Children?

Here are some key reasons why opening an FD for children could be a good approach -

  • Financial Security for Future Education

A fixed deposit provides a stable and secure investment option, ensuring that funds are readily available for a child's education.

  • Capital Protection

Fixed deposits are known for their capital protection features. The principal amount invested is safeguarded, and the predetermined interest rate ensures a steady growth of the investment. 

  • Discipline in Savings

By opening a fixed deposit for a child, the importance of disciplined savings early on is instilled. This financial habit can serve them well throughout their lives, fostering responsibility and prudent money management skills.

  • Compounding Benefits

Fixed deposits accrue interest over time, and compounding plays a significant role in enhancing the overall returns. The longer the investment remains untouched, the greater the compounding effect, resulting in a more substantial corpus for the child's future financial requirements.

  • Emergency Fund Creation

Having a readily accessible pool of funds provides a financial safety net, ensuring that sudden financial needs or emergencies can be met without resorting to high-interest loans.

  • Teaching Financial Literacy

Understanding the basics of saving, interest, and investments at an early age equips them with valuable knowledge for making informed financial decisions in the future.

  • Long-Term Wealth Accumulation

The disciplined investment approach of a fixed deposit, coupled with the power of compounding, facilitates the accumulation of wealth over the long term. Coupled with the attractive FD interest rates, the accumulation of a substantial corpus can serve various purposes.

How to Book an FD for Children?

The process of investing in FD for a minor is just as simple as that of investing for an individual. Follow these step to book a fixed deposit for your child:

  • Step 1: Visit the Bank or NBFC issuing an FD scheme for minors

  • Step 2: Furnish identity verification for both the child and the responsible parent or guardian

  • Step 3: Submit documents such as identity proof, address proof, age proof, and the passport-size photographs of the child.

  • Step 4: The provided documents and account information will undergo verification before the account is approved

  • Step 5: Once the application is processed, a new FD account for the child will be opened, with the parent or guardian overseeing the account until maturity

Eligibility Criteria for FD for Children

The eligibility for investing in an FD for a minor depends on the issuer you choose. Generally, issuers require the minor to be between the age of 1 – 15 years. Additionally, the account holder should also be a parent/ legal guardian above the age of 18. 


To ensure that you and your child meet all the eligibility criteria and can invest seamlessly, check the issuer’s website or call the customer support team. A majority of issuers have the list of documents required and the eligibility criteria on their website.

How to Withdraw the Fixed Deposit for Children

The withdrawal process of an FD in the name of a minor can vary depending on the FD issuer and the type of FD you choose. Generally, FD issuers have the following terms making withdrawal from an FD for minor accessible:

  • The minor has turned 18

  • If the minor is a girl, she should complete the minimum years of education (generally 2) after the date of investment

  • If the minor is a boy, he should have completed and cleared his class 10 exam


Check the exact withdrawal process by visiting the issuer’s website, contacting their customer care, or visiting the branch. Alternatively, you should also check the premature withdrawal process to ensure that you can get access to the fund, if needed.

Should you Invest in an FD for Your Child’s Future?

With the cost of education, healthcare, and other essentials on the rise, it is important to ensure financial security for your child. Thus, FDs are an ideal investment avenue for assured returns. 


To help you understand better about the return you would earn for different tenors, you can use the FD interest rate calculator. This tool instantly determines the potential returns you could earn on your deposit based on the tenor, interest rate, and the deposit amount.

Compare Fixed Deposit Interest Rates

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Bajaj Finance

8.60% p.a.

60 Months



PNB Housing Finance

8.15% p.a.

120 Months



Mahindra Finance Ltd

8.30% p.a.

60 Months



AU Small Finance Bank

8.50% p.a.

120 Months



YES Bank

8.00% p.a.

120 Months



Ujjivan Small Finance Bank

8.75% p.a.

120 Months


View More


The information provided by BFDL herein above is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial investment advice or endorsement of any sort.

The information including interest rates with regard to fixed deposit, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any investment or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products. 

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Is FD made in the name of a minor taxable?

Yes. An FD account opened in the name of a minor is taxable.

How to choose a child FD plan?

To choose the right option, you should check the rates offered for the required tenor and pick accordingly. You can use an FD calculator to know if the investment terms and issuer policies align with your goals.

What is the investment limit to open an FD for minors?

The deposit limit for investment in an FD for minors varies depending on the issuer. While some issuers have a maximum deposit limit of ₹50,000 for minors, there are also issuers which allow investment amounts up to ₹1 Lakh for the same

How to choose a child FD plan?

To choose the right option, you should check the rates offered for the required tenor and pick accordingly. You can use an FD calculator to know if the investment terms and issuer policies align with your goals.

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