I have a 2 year old daughter, US citizen by birth. Can we invest in her name in PPF (Public Provident Fund) or NSC (National Savings Certificate) ? Both parents are Indian nationals.


Detailed answer from an expert. I don't think much has changed after that, so it should hold.

Non Resident Indians are not eligible to open an account under the Public Provident Fund Scheme:-

Provided that if a resident who subsequently becomes Non Resident Indian during the currency of the maturity period prescribed under Public Provident Fund Scheme, may continue to subscribe to the Fund till its maturity on a Non Repatriation Basis.

  • Just to emphasize, forget Foreign Nationals; even Non Resident Indians cannot open the accounts.
    – Dheer
    Feb 7 '11 at 10:53
  • @Dheer That is why I added the more conservative of them, NRI. When an NRI cann't do it, we can forget about foreign nationals.
    – DumbCoder
    Feb 7 '11 at 11:06

She is a "Person of Indian Origin" - a PIO because her parents are Indian Nationals. NRIs and PIOs have similar rules - and they can't buy NSCs or open PPF accounts.

At an implementation level, there is very little enforcement of this rule for NSCs. If you don't want to take the proceeds out, you can invest through a post office, and use the certificate to redeem after 6 years. But you won't be able to use that to offset any Indian taxes she might have to pay on other investments. PPF accounts go through a further level of scrutiny (PAN cards etc.) so there you're out of luck.

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