A public provident fund is a popular investment scheme among investors who want to earn high and stable returns.
Features such as low minimum investment, multiple investor-friendly, and associated benefits make it suitable for individuals who are cautious about investments or those who want to grow their wealth over time.
PPF or Public Provident Fund is an investment option under which one can invest on a long-term basis, earning interest on the amount invested.
One can open a PPF account with any bank or post office and deposit money under this scheme. The amount deposited during a year will be claimed tax-free under section 80C deductions.
Individuals with considerable savings in PPF accounts can convert their capital into a pension by investing a portion of it into NPS without closing the PPF account. To draw a monthly pension, you must contribute to the NPS account for at least 3 years and be above the age of 60.
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You can open a PPF account at a post office or any nationalized bank. Even some private banks these days, including ICICI, HDFC, and Axis Bank, are authorized to offer this facility.
Follow these steps to open PPF account online easily.
Step 1: Log into your bank account using net banking or mobile banking
Step 2: Choose the ‘Open a PPF Account’ option.
Step 3: Enter your details on the next screen and the amount you wish to deposit
Step 4: Choose whether you wish to add a nominee and provide their details
Step 5: Agree to the terms and conditions, and enter the captcha before submitting the form
To open a PPF account offline, visit your nearest post office. Here is a step-by-step guide-
Visit your nearest post office or sub-post office to obtain an application form.
Submit the form along with KYC documents and a passport-sized photograph.
In order to open a post office PPF account, you must make an initial deposit of Rs. 500.
Following the submission of all the required documents as well as the initial deposit, the applicant will receive a PPF passbook.
The passbook will include information such as the account holder's name, PPF account number, balance, branch name, and more.
These steps can also be replicated at a bank that offers this service.
To open a PPF account, you need to submit the following documents.
Application form for opening an account
Identity proof such as Aadhaar, PAN, passport, etc
Proof of Address
Signature
Passport sized photographs (in some cases)
Nominee declaration form(only if you chose a nominee for your account)
To open a PPF Account,
The individual must be an Indian citizen
Only one account per individual is allowed unless the second account is under the name of a minor
NRIs and HUF are not allowed to open a PPF account.
The main features of the PPF account are:
Currently, the PPF interest rate stands at 7.1%.
You can make a minimum deposit of Rs.500 and a maximum deposit of Rs.1.10 Lakhs in a year.
Depending on the amount of the deposit, it can be made as a lump sum or in 12 installments over the course of the year.
This scheme lasts for 15 years.
Upon maturity, you can also extend the account tenure for several years.
Tax benefits of up to Rs.1.10 Lakhs are available for contributions toward the account under Section 80C of the Income Tax Act.
The net banking feature will allow users to view the statement and access various PPF details.
Loans may be obtained against the PPF account after a specified amount of time.
Individuals must link their bank account to aadhaar card to activate their PPF account.
A Public Provident Fund (PPF) is an excellent investment for individuals with a low risk tolerance. Since it is mandated by the government, this plan offers guaranteed returns to protect the financial needs of the masses in India. Furthermore, investments made in PPF-mandated accounts are not tied to the market. Investors can also use this plan to diversify their financial and investment portfolios.
PPF scheme offers several advantages. The benefits of a PPF plan include guaranteed returns, loan and withdrawal options, an unlimited term, and a yearly tax credit.
No. For the year or years the account is inactive, no interest will be calculated. Interest will be computed on the balance held at the time of account revival after it has been reinstated.
An Indian citizen with legal status is permitted to establish a public provident fund in their own name or on behalf of a minor. Under the PPF program, a person can only open one account.
Only sums up to Rs. 1.5 lakh will be eligible for calculation and payment of interest in any given year. So, only the maximum annual investment limit, which is Rs. 1.5 lakh per year, will be taken into account for all PPF calculations.
No. You can keep the account active as long as you see fit. The amount will earn interest until you close the account.
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