Saving For Your Child's Future With Fixed Deposits

IndiaFirst Life
• 16 Jun, 2025

Every parent dream of offering their child a secure and stable future, especially in matters of finance. A fixed deposit for children can significantly support this goal by providing direct and assured returns on investment schemes facilitated by banks and Non-Banking Financial Companies (NBFCs). As investors, parents can benefit from a fixed interest rate on the invested principal for a predetermined period, thereby ensuring predictable growth.

The amount invested can continue to grow steadily over the years until the child reaches the maturity age defined in the deposit. At that point, the child can decide to continue the investment or withdraw the accumulated funds. A child-specific FD can help parents grow their savings steadily without facing the market fluctuations typically associated with equities, mutual funds, gold, or property.

Why Opt for a Fixed Deposit for Your Child?

One of the best things about investing is that there are all kinds of options available. Each option has its own advantages. What makes fixed deposits a great option for your children is that you can use them to:

To Ensure a Stable Financial Base for Their Future

From the moment a child is born, it becomes essential to begin setting financial goals to support major future expenses, such as schooling, college tuition, medical needs, life insurance, and even marriage. Choosing a dedicated child-oriented FD can allow parents to plan well in advance and accumulate savings for each milestone. This can help ensure that no matter the financial circumstances, funds are available for your child’s important life events.
To Earn Predictable Returns on Your Investment

Unlike volatile investment avenues, fixed deposits come with guaranteed interest rates. It means that you can confidently expect a profit on your FD once it matures. Unlike mutual funds, stock markets, gold, or real estate, which may fluctuate based on economic trends, a fixed deposit can offer stability. The maturity amount is always higher than the principal invested, ensuring consistent and risk-free returns.
To Help Your Child Build Financial Awareness

Until your child reaches maturity age, the FD account is operated by you, the parent or legal guardian. Once the child comes of age, the responsibility shifts to them. They can either withdraw the maturity amount or choose to renew the investment. This transfer of financial responsibility can help children become familiar with basic money management concepts, making it a great learning opportunity from an early age.

Key Benefits of Fixed Deposit Schemes for Children

Here are few benefits that children can have from fixed deposit schemes:

Parents or guardians can initiate a fixed deposit for a minor who is as young as one year old.
Interest rates offered on these schemes typically range between 6% and 9% annually, varying by bank and tenure. You can use an FD calculator to have an idea of what interest rate will be good for you.
FDs offer guaranteed, risk-free returns upon reaching maturity, providing financial security.
Tenures for deposits can range from as little as 7 days up to 10 years, offering flexibility.
An FD can help parents save and invest efficiently for both - short-term needs and long-term goals of your child.
The minimum deposit required to open a child FD is generally small, making it easily accessible for most families.
There’s no need for recurring monthly or annual contributions, making it a hassle-free option.
These deposits act as a financial cushion for your child’s future, especially in your absence.
Child fixed deposits can be opened online in just a few clicks, avoiding repeated branch visits and paperwork.

When Can a Withdrawal Be Made from a Child Fixed Deposit Scheme?

Withdrawal from a child fixed deposit is subject to certain specific conditions:

The child must have attained the age of 18 years.
The child has cleared their Class X board examinations successfully.
If the deposit was opened for a girl child, she must have completed at least two academic years after enrolling in Class IX.

These conditions can ensure that the funds are used wisely and support meaningful milestones in a child’s development and education.

Documents Required for Opening a Fixed Deposit for a Child

To initiate a fixed deposit in a minor’s name, the following documents must be provided:

1. Official proof of the child’s date of birth (such as birth certificate).

2. Permanent Account Number (PAN) of the parent or legal guardian.

3. Valid ID proof of the parent or guardian—this can include a Driving Licence, Voter ID card, Aadhaar Card, or Passport copy.

4. Address proof of the parent or guardian—utility bills, Aadhaar, or rent agreement may suffice.

5. Recent passport-sized photographs of both the parent/guardian and the child (in some cases).

These documents can help complete the Know Your Customer (KYC) verification and ensure legal compliance.

How to Open a Fixed Deposit for a Child?

Setting up a fixed deposit for your child involves a few straightforward steps:

Step 1

Visit the official website or local branch of your preferred bank or NBFC. You may also log in via net banking or a mobile banking app.
Step 2

Look for the section related to fixed deposits or child-specific investment schemes. This can be done online or by consulting a branch executive.
Step 3

Fill in all required details for both the child and the parent or guardian (as specified in the application form or portal).
Step 4

Upload the necessary documents digitally (or submit physical copies at the branch), including ID proof, address proof, and photos. Complete the KYC process diligently.
Step 5

After submitting the form, the bank or NBFC will verify the information and documentation provided by you.
Step 6

Once the verification is complete, your child’s fixed deposit account will be opened successfully, and you’ll receive the confirmation along with an FD receipt.

Various banks and NBFCs across India offer attractive interest rates, helping form some of the best fixed deposit plan for children. Before you decide to invest, ensure that your financial goals, return expectations, and investment timeline are clearly defined. You may also want to evaluate complementary options such as child insurance plans and targeted child investment plans to safeguard your child’s future against unforeseen life events.

by IndiaFirst Life
Headquartered in Mumbai, IndiaFirst Life Insurance Company Limited (IndiaFirst Life), with a paid-up share capital of INR 754.37 crore, is one of the fastest growing private life insurers in India in terms of New Business IRP in Fiscal 2023. Our key differentiators are our simple, easy-to-understand products that are optimally priced. As of Sept 30, 2023, we offered 30 retail products, 13 group products along with six riders (across retail and group portfolios), along with policies under the PMJJBY scheme, catering to protection, savings, health and retirement needs of our customers, leveraging multiple distribution capabilities and augmenting various investment options. In all propositions under the categories of Participating Plans, Non-Participating Savings Plans, Non-Participating Protection Plans, Unit Linked Insurance Plans, Group Protection Plans, Corporate Funds Plans, Riders & PMJJBY form a complete suite of offerings that help our customers prepare for the certainties of life. Our products are easy to understand and optimally priced with a developed comprehensive risk management framework/policy.