A PPF (Public Provident Fund) is a tax-saving investment vehicle that provides stable returns over a period of 15 years. With an interest rate of 7.1% p.a., it helps build a retirement fund along with tax-saving benefits under Section 80C. This blog guides you through the process of opening a PPF account and lists details such as eligibility criteria, benefits, documents required, how to transfer a PPF account from one bank to another and how to close a PPF account.
You have to satisfy these criteria to be able to open a PPF account.
Note that if you are an NRI, you are not eligible for a PPF account, but if the account was opened before you became an NRI, you have to maintain the account for 15 years with no option for further extension.
For minors, birth certificate has to be submitted as legal age proof.
One can open a PPF account via both online and offline methods. The process might vary slightly from one bank to another. The following are the ways in which you can open a PPF account.
Step 1: Log in to the net banking portal of your respective bank account.
Step 2: You will find ‘Open a PPF account’; click on it.
Step 3: Two options will be available. If the account is for yourself, choose ‘Self Account’ or choose ‘Minor Account’ if it is for a minor.
Step 4: Fill in details as required and verify them before submission.
Step 5: Enter the amount you wish to deposit in a financial year. You can choose to set automatic instructions. For example, the amount to be deposited in your PPF account will be debited from your savings account and get transferred to your PPF account.
Step 6: After you submit the form, an OTP will be sent to your registered mobile number for verification and authorisation of the transaction.
Step 7: Upon confirming the OTP, you will get a success mail to your email ID with all the details of your PPF account.
Step 1: Fill out the PPF application form with all the details; don’t forget to cross-check the information.
Step 2: Provide necessary documents or copies of them as required.
Step 3: Go to the respective branch of the bank or post office where you already have a savings account and want to open a PPF account.
Step 4: Submit the form along with documents to a representative of the bank or post office.
As mentioned above, you can open a PPF account in a post office or a bank where you already have a savings account. Banks that provide PPF account services are listed below:
There are some benefits of having a PPF account. They are as follows:
You can transfer your PPF account if needed from one bank to another by following a few simple steps given below:
You cannot close a PPF account before the maturity period of 15 years is over. However, partial or premature withdrawal of up to 50% is allowed. That said, you can choose premature closure of the account, which is allowed only under considerable circumstances.
Being a long-term and risk-free investment option with attractive interest rates, PPF is a preferable investment method among investors. Knowing how to open a PPF account and the related details should help you make the right decision.
Ans: The dates for PPF deposit are not specified, but it is best if you deposit between April 1 and April 5 of a financial year. If not possible, you can make the deposit by the 5th of every month to get the maximum benefits.
Ans: If the account holder turns 18 years old, the minor PPF account can be converted into a regular PPF account by submitting an application form and the required documents. The guardian can also submit the application form to convert the status of the account from minor to major.
Ans: PPF account allows partial or premature withdrawal before the maturity period. However, under certain terms and conditions, you can only make a 50% withdrawal of the available amount after the completion of 5 years.
Ans: Yes, you can reactivate an inactive PPF account by submitting an application to the bank or PO along with Rs. 50 penalty and a minimum deposit of Rs. 500 for each year. The bank or PO will process your request and activate the account.
Ans: If you are opening a PPF account in a post office, you must visit the PO. But if you are opening a PPF account in a bank, you can use the net banking facility for the same.
Before you go…