ppf account

The Public Provident Fund (PPF) Scheme was started by the National Savings Organization in 1968 to promote small savings and investments. Since the scheme is not related to market volatility and offers stable and guaranteed returns, the PPF scheme is a popular retirement savings tool among risk-averse investors. Further, the scheme allows you to claim income tax benefits on the capital invested under Section 80C of the Income Tax Act, 1961.

In this article, we’ll look at the process involved in opening a PPF account.

Eligibility For Opening PPF Account

(i) Only an Indian resident can open a PPF account.

(ii) A person can open only one PPF account.

(iii) NRIs who had opened a PPF account while they were resident Indians can operate the account until 15 years with no option for extension.

(iv) Minors can open a PPF account based on legal age proof.

(v) HUFs cannot open PPFs after 13th May 2005. All PPF account prior to this date can be operated till the maturity period of 15 years with no extensions.

Further, you must make a minimum deposit of Rs.500 per financial year to open the PPF account as well as keep the account active. The maximum deposit allowed per financial year is Rs.1.5 lakh.

Documents Required To Open PPF Account

The documents required to open a PPF account are

(i) PPF Account opening form, available at the bank branch or the Indian Post portal.

(ii) ID proof that includes any of the following:

• Aadhaar Proof
• PAN card
• Driving license
• Voter ID card
• Passport

(iii) Address proof, from any of the following:

• Aadhaar Card
• Telephone bill
• Electricity bill
• Ration card

(iv) Two current passport size photographs

(v) Pay-in-slip at the bank branch to transfer the amount to your PPF account, or a signed cheque in favour of your PPF account.

(vi) For a minor, a birth certificate may also be required as an age proof

Please note that all documents have to be self-attested, and originals have to be taken while opening the account.

For online applications, there are separate procedures for all the banks but the basic documentation and submission of application remains the same.

Steps To Open PPF Account

A PPF account can be opened in only designated bank branches of

• SBI and its subsidiaries
• ICICI Bank
• Axis Bank
• HDFC Bank
• Central Bank of India
• Bank of India (BOI)
• IDBI Bank
• Punjab National Bank
• Indian Overseas Bank
• Bank Of Baroda 
• Canara Bank
• Union Bank Of India
• UCO Bank
• Punjab and Sind Bank

Online Method

In order to open a PPF account online, you must have a savings account with a participating bank or Post Office and must have enabled internet banking or mobile banking service for the same.

Step 1: Log into your account on the internet banking or mobile banking platform.

Step 2: Find the ‘Open a PPF Account’ option and select it.

Step 3: If you are opening the account for yourself, click on the ‘Self Account’ option. If you are opening the account on behalf of a minor, you may select the ‘Minor Account’ option.

Step 4: Enter the relevant details in the application form. Verify the details entered.

Step 5: Enter the total amount you are planning to deposit in the account per financial year.

Step 6: You can set standing instructions such that the amount stated will automatically get debited from your savings account and get credited to the PPF account as per the intervals you prefer.

Step 7: Submit the application. An OTP will be sent to the registered mobile number for you to authorise the transaction.

Step 8: Enter the received OTP to confirm your identity.

Step 9: Your PPF account is created! A success message will be displayed on your screen. An email will be sent to your registered email address with all the details confirming the same.

Offline Method

You can open the PPF account offline and the procedure is

Step 1: Fill up the PPF application form with relevant information.

Step 2: Gather all the relevant documents to be submitted along with the application.

Step 3: Visit the bank or Post Office where you wish to open the account. It is recommended to hold a savings account with the bank or Post Office branch to conveniently open a PPF account.

Step 4: Submit the documentation to the bank or Post Office branch representative.

Benefits Of Opening PPF Account

(i) Risk-free interest rate: Get an attractive interest rate of 7.1% p.a. with a scheme backed by the Central Government.

(ii) Compounded interest: The interest on PPF is compounded on yearly basis. Your interest is paid on the 31st of March, every year

(iii) Tax deduction: Get deductions of up to Rs 1.5 lakh on investments in the PPF account, under Section 80C.

(iv) Long-term investment: Once you open a PPF account, you will stay invested for a period of 15 years.

(v) Loans against PPF balance: Loans can be availed between the 3rd to the 6th financial year from the date of opening the account.

(vi) Low investment token: The PPF deposit amount ranges from a minimum of Rs.500 up to a maximum of Rs.1,50,000 per financial year.

(vii) Extension of a PPF account: A PPF account can be extended in the blocks of five years after maturity.

(viii) Withdrawal Facility: Partial withdrawal facility can be availed from the 7th financial year onwards.

Interest Rates Of PPF

The following table represents the interest rate set by the Central Government in the recent past.

PPF Calculator

Use our PPF calculator to get an estimate of returns based on the money you are planning to invest in the PPF account over the tenure of 15 years.

How To Check PPF Balance?

Checking PPF Balance Online

As a prerequisite to checking PPF balance online, you must have linked the PPF account to your internet banking/mobile banking account. The procedure is applicable for a PPF account opened with a bank as well as Post Office.

Step 1: Log into your account on the internet/mobile banking platform.

Step 2: Select the PPF account number to view the balance.

Checking PPF Balance Offline

Step 1: Visit the home branch of the bank or Post Office where you have held the PPF account.

Step 2: Get your account passbook updated to know the current balance in your PPF account.

PPF Account For Minor

• A PPF account can be opened by a parent on behalf of his/her child.
• Both the parents cannot open a separate PPF account for the same child.
• An individual can, hence, open one PPF account on behalf of each minor child of whom he/she is the guardian.
• Grandparents are not permitted to open a PPF for their grandchildren when the parents of the minor are still alive.
• Birth certificate is also a document required for minors as age proof.

List Of All Forms Related To PPF Account

The following table represents all the forms that are related to the PPF account.

Premature Closure Of PPF Account

Premature closure of a PPF account is allowed only after the completion of five years, for the purpose of medical treatment of family members, and for the higher education of only the PPF account holder. The premature closure comes with an interest rate penalty of 1%.  

Transfer Of PPF Account

A PPF account can be transferred to any other branch, or any other bank, or Post Office, at the request of the PPF account holder. This service is free of charge.

Step 1 – Approach the bank or post office branch where the PPF account is held and ask for the necessary forms to be filled.

Step 2 – The existing bank will then forward the certified copy of the account, nomination form, the account opening application form, and the specimen signature along with the cheque/dd for the outstanding amount in the PPF account, to the new bank at the branch specified by the customer.

Step 3 – Once the new bank branch or the post office receives these documents, they will inform and will ask you to submit a new PPF account opening form along with the old PPF passbook. A new nominee can be submitted as well.

Step 4 – Check in a couple of weeks that the transferred PPF account now shows up under the PPF account tab/link in the log-in of your internet banking id; if not, then inquire at the local bank branch or the local post office branch. 

Inactivation And Reactivation Of PPF Account

(i) Money has to be deposited or invested each year to keep a PPF account active. The minimum requirement of Rs.500 should be met each financial year, if not, the PPF account from that financial year is deemed inactive.

(ii) Loan facility cannot be availed when the PPF account is inactive.

(iii) To reactivate the PPF account an account holder has to pay a penalty of Rs.50 per year for inactivation, and the minimum amount cumulative for each inactive year as well.

For instance, if an account has been inactive from year 4 to year 7 and now if you want to reactivate the account in year 8, then a penalty of Rs 50 each year for 4 years has to be paid, i.e., Rs 200 (Rs 50*4 years).

Rs 500 * 4 years = Rs 2000 needs to be deposited along with the penalty of Rs 50 per year of default, i.e. Rs 50 * 4 years = Rs 200.

Tax Implications On PPF Account

PPF falls under the EEE (Exempt, Exempt, Exempt) tax basket. Investments into the PPF account are eligible for tax benefits under Section 80C of the Income Tax Act, for up to a maximum of 1.5 lakhs per annum. The total amount received upon maturity and the interest earned is both exempted from income tax. Contributions to the PPF accounts of the spouse and children are also eligible for a tax deduction.

How To Open PPF Account Online?

Step 1: Log into your bank account on the internet banking or mobile banking platform.

Step 2: Select the ‘Open a PPF Account’ option.

Step 3: If the account is for self, click on the ‘Self Account’ option. If you are opening the account on behalf of a minor, select the ‘Minor Account’ option.

Step 4: Enter the relevant details in the application form.

Step 5: Key-in the total amount you want to deposit in the account per financial year.

Step 6: Submit the application. An OTP will be sent to the registered mobile number. Enter it in the relevant field.

Step 7: Your PPF account will get created in an instant! Your PPF account number will be displayed on the screen. An email will be sent to your registered email address with all the details confirming the same.

How To Open PPF Account In SBI Online

Step 1: Log in to the SBI’s internet banking portal at http://www.onlinesbi.com.

Step 2: Click the ‘New PPF Accounts’ option on the side menu.

Step 3: The ‘New PPF Account’ page will be displayed where your name, address, CIF number, and PAN details will be pre-filled.

Step 4: Enter your bank account number and branch code from which you would like to make the payment for the PPF account. Click on the ‘Get Branch Name’ button.

Step 5: Your personal and nomination details will be displayed for verification. Once done, click on ‘Proceed’.

Step 6: Your PPF account will be created in an instant and the account number will be displayed on the screen.

How To Open PPF Account In HDFC Bank?

Step 1: Log in to the HDFC Bank internet banking portal.

Step 2: Click on ‘Public Provident Fund’ and select the ‘PPF Accounts ‘option.

Step 3: Click ‘Open Now’.

Step 4: Enter bank account details from which you would like to pay for your PPF account and the PAN number.

Step 5: Verify if all the details you have entered are correct and click on the ‘Proceed’ button.

Step 6: Verify your Aadhaar number. If your bank account is already linked to your Aadhaar, you can click on ‘Generate OTP’, else you will need to update your Aadhaar online. There is also an option to e-sign with the Aadhar OTP as well.

Step 7: Now, your PPF account is instantly created and the account number is displayed.

Who Can Open PPF Account?

Any resident Indian adult can open a PPF account. In the case of a minor or a person with an unsound mind, a legal guardian can open the account on their behalf.

How To Withdraw Money From PPF Account?

Step 1: Fill in Form C with relevant details. You can download this from your bank or Post Office website or at the branch.

Step 2: Submit the form to the bank or Post Office branch where your PPF account is held.

How To Close PPF Account?

As per the rules governing PPF accounts, you cannot fully withdraw your PPF account balance only after the account completes its tenure of 15 years. Upon completion of the 15-year term, you can access the entire account balance, withdraw it fully, and close the account.

Any time before completing the full tenure of the account, you cannot withdraw the entire account balance in any circumstances. However, premature withdrawal of up to 50% of the account balance is allowed after completing 5 years. This is permitted under special circumstances only.

How To Transfer PPF Account?

You can transfer your PPF account to another branch of the bank/Post Office, switch from bank to Post Office, or switch from Post Office to a bank. Here is the procedure.

Step 1: Visit the bank or Post Office branch where your PPF account is held.

Step 2: Request for the application form to transfer the PPF account and fill it up with the relevant details.

Step 3: The branch representative will process your application and forward it along with the certified copy of the account, nomination form, account opening application, specimen signature, and the cheque/DD for the outstanding balance of the PPF account to the new branch.

Step 4: Once the new branch receives your application and supporting documents, you have to submit a new PPF account opening application along with the old PPF account’s passbook. You may change the nominee at this point.

Step 5: Once this application is processed, your PPF account is successfully transferred to the new branch.

How To Link An SBI PPF Account To An SBI Account Online?

There is no need to link a PPF account held with SBI to an SBI savings account. At the time of opening the PPF account, either online or offline, you will have provided your existing savings account number held with the bank. This means, your new PPF account is created under the existing customer ID. By default, your PPF account will be linked to your savings account. Therefore, you can use the same login credentials for internet banking and access both your savings account and PPF account details under a single platform.

How To Know Your PPF Account Number?

When you open a PPF account offline, the bank or Post Office will provide you with a passbook. The passbook contains all the necessary information about the PPF account, such as the PPF account number, bank/PO branch details, account balance, transactions made in the account, and others. You can get the passbook updated regularly to access the latest data.

On the other hand, you can log into your account on the internet banking portal. On the home page, choose the PPF account to see the account details, such as the account number, account balance, recent transactions, and others.

How To Link Aadhaar With PPF Account Online?

Step 1: Log on to your internet banking account.

Step 2: Click on the ‘Registration of Aadhaar Number in Internet Banking’ option.

Step 3: Enter your 12-digit Aadhaar number therein and click on ‘Confirm’.

Step 4: Select the PPF account to link it to the Aadhaar number and done.

Step 5: Click on the ‘Inquiry’ option on the homepage to check if the Aadhaar linking request is completed.

How To Open PPF Account In Post Office?

Step 1: Get an application form from your nearest post office or online.

Step 2: Fill up the form and submit it with the required KYC documents and passport size photograph.

Step 3: Make the initial deposit required to open a post office PPF account. The amount can range from Rs.500 up to Rs.1.5 lakh per financial year.

Step 4: Once your application is processed, a passbook will be given to you for the PPF account opened.

How To Check PPF Account Balance Online?

Step 1: Log in to your internet banking account.

Step 2: Open the PPF account details to check the latest PPF balance and the recent transaction details.

What Is PPF Account? What Are Its Benefits?

Public Provident Fund (PPF) is a retirement savings scheme offered by the Government of India with the aim of providing a secure post-retirement life to everyone. The minimum deposit you must make in the account per financial year is Rs.500 and it can go up to Rs.1.5 lakh. In addition to providing retirement savings, you can also claim income tax benefits on the amount you invest in the account.

Here are the benefits you can expect from a PPF account

• Risk-free returns as the returns are not dependent on the market volatility.
• Compounded interest rate.
• Income tax deduction u/s 80C of the Income Tax Act, 1961.
• Long-term investment for 15 years.
• Loans and advances against PPF balance.
• Low investment amount of Rs.500.
• Unlimited extension facility of PPF account in the blocks of five years upon maturity.
• Partial withdrawal facility from the seventh financial year onwards.

How Many Years PPF Account Can Be Extended?

A PPF account can be extended in the blocks of five years any number of times upon the maturity of the account after 15 years from the date of opening the account.

How To Withdraw Money From PPF Account Before Maturity?

Step 1: Check if you are eligible for premature withdrawal.

Step 2: If you are eligible, get Form C from the bank or Post Office and fill it up with relevant details.

Step 3: If the account is in the name of a minor, you will have to provide an additional declaration stating the money you are withdrawing is for the sake of the minor and that the minor is alive.

Step 4: Submit the form and any supporting documents to the bank or Post Office branch.

Step 5: If all the information and documents you have provided are satisfactory, the bank or PO will process it and release the payment.

Which Bank Is The Best For PPF Account?

PPF accounts are offered by the Government of India and are not specific to a bank. Also, all banks provide the same set of features and benefits when you open a PPF account. The interest rate is set by the government and it remains the same wherever the PPF account is held. Therefore, there is no best bank that offers a PPF account.

When To Deposit Money In PPF Account?

There is no specific due date as to when you should deposit money in a PPF account. However, it is beneficial for you to deposit money between 1 April and 5 April of a financial year. If it is not possible for you to make the full year’s deposit at the beginning of the year, you can make monthly deposits within the 5th of the month to earn maximum benefits.

How Many Times PPF Account Can Be Extended?

PPF account can be extended any number of times without any restrictions.

How Many PPF Accounts Can Be Opened?

An individual can open only one PPF account across the country either in a bank or Post Office.

How Much Money Can Be Withdrawn From PPF Account?

You can withdraw the money partially after completing five years from the date of opening the account. However, you can only withdraw up to 50% of the total account balance at the end of the fourth year from the date of opening.

How To Convert Minor PPF Account To Major?

When a minor PPF account holder becomes a major or turns 18 years old, you can submit a revised application form along with necessary documents stating the age of the account holder to change the status of the account from minor to major. The guardian can submit the application along with the account holder’s signature on the application form as an attestation.

How to close a PPF account in a Post Office?

You can close a PPF account after completing 15 years from the date of opening the account. The procedure is given below.

Step 1: Fill up the relevant information in Form C and attach your PPF passbook.

Step 2: Submit this to the relevant Post Office branch where the account is held.

Step 3: Your application will be processed and the account will be closed. You will receive the payment in your savings account linked to the PPF account

What Is The Minimum Lock-in Period For PPF Account?

The minimum lock-in period for a PPF account is 15 years, the actual tenure of the PPF account.

How Does The PPF Account Work?

A PPF account can be opened by an adult for self or on behalf of a minor. The account tenure is 15 years and the lock-in period for the account is 15 years. You can make a deposit to a PPF account ranging from Rs.500 up to Rs.1.5 lakh per financial year. The deposit can be made in a lump sum or in instalments. There is no restriction on the number of instalments per financial year. The deposits must be made every financial year during the tenure and such deposits are exempt from income tax u/s 80C.

You are required to make a minimum deposit of Rs.500 per financial year to keep the account active. If you fail to make this deposit, the account will be discontinued. You will have to pay a penalty of Rs.50 along with the minimum deposit of Rs.500 to reactivate the account.

An interest rate of 7.1% p.a. (Q2 FY23) is applied to the deposit and is compounded annually. A loan facility is available on the PPF balance. Also, you can make partial and premature withdrawals on the PPF account subject to certain conditions. Upon completing the tenure, you can choose to extend the account with or without making additional contributions. You also have the option to close the account.

How To Activate An Inactive PPF Account?

In order to reactivate an inactive PPF account, you can follow the steps below:

Step 1: Submit a written letter to the bank or PO branch requesting to reactivate it.

Step 2: Pay a minimum amount of Rs.500 for each year you have not made any contributions along with the penalty of Rs.50 per inactive year.

Step 3: The bank or PO will process your request and reactivate the account.

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