Investor’s Query: Can a Public Provident Fund (PPF) Account be opened in a minor child’s name by parents being guardian, if child is born in US while parents are working onsite in US? Parents are Indian Resident Individuals. Child will be coming and living in India after 2 years of completing parents onsite job in US.
Mr. Gerard Colaco: Only a resident Indian individual can open a PPF account. Here the minor is born in the US. Therefore the birth certificate of the minor will be issued in the US. One of the ways citizenship is determined and obtained in the US, is by birth. When the birth takes place in the US, citizenship of the US is easily given to the child and the child can even obtain a US passport, with the parents signing the necessary application forms on behalf of the minor.
If the parents do not want this, they must state so and apply for an Indian passport after making the necessary enquiries and complying with the prescribed procedures at the Indian embassy in the US. Otherwise, the minor will require a visa to come to India. Of course if the OCI card is obtained, it comes with a lifelong, multiple entry visa to India.
Now where the PPF is concerned, the residential status of the minor is important. The residential status of the parents is immaterial. This is because the parents are only opening the account of the minor on behalf of the minor because the account holder being a minor is not competent to contract. The account is of the minor and not of the parents.
If the minor was born outside India and has not come to India and is not a resident of India, a PPF account cannot be opened for the minor. If on the other hand, the minor has either an Indian passport or a US passport and an OCI card and then returns to India and acquires residential status, the PPF account can certainly be opened, after residential status in India is obtained.
However, in this case, it is advised to first obtain a US passport for the child and then an OCI card. This will give the child the benefits of holding a US passport. After the child returns to India and obtains resident status, a PPF account can be obtained.