In the banking world, there are a lot of terms and analogies that a common man does not know or find difficult to understand them. In my series of articles, I’ve tried to break down each and every term, regarding banking sector, in great detail. Once such term is PPF account. Very few people know about this type of account. So, let me try to explain to you what this account is and how can you use it to your benefit. I am going to explain the process by referring to SBI, ICICI, AXIS Bank, HDFC, and AXIS Bank.
What does PPF mean?
- PPF is called Public Provident Fund. It is a scheme that comes under the PPF Act of 1968 and it was initiated by the Ministry of Finance.
- Basically, it is a savings account that is tax-free, and in addition to that, the interest that is received on deposits made in this account are also not taxable.
- Any deposits that are being made to the PPF accounts can be declared as tax deductions.
- PPF accounts are, therefore, highly beneficial for the account holder as they target retirement security and also proves useful in saving money for weddings or to purchase any property or for similar things. Therefore, people are preferring to open a PPF account to any other account if they are looking to enjoy long-term tax-free savings.
- All of these features make the PPF Scheme one of the most tax-efficient tools in our country.
- A PPF account matures after a term of 15 years after the end of the year in which the account was opened by the customer. You will have the option of extending it in blocks of 5 years if you want.
What is the eligibility criteria to open a PPF account?
The eligibility criteria to open a PPF account in banks such as ICICI, HDFC, SBI, and AXIS bank is as follows:
- The person’s who are residents of India only can open their accounts under the PPF scheme.
- In addition to that, one person can only open one PPF account, the only exception being an account of a minor.
- But, the mother and father of the same minor will not be allowed to open a PPF account on behalf of him.
- NRI’s, also called Non-Resident Indians, are not eligible to open a PPF account.
- You will not be allowed to have joint PPF accounts.
The documents that are required to open a PPF account
Very specific documents are needed for a person to open a PPF account in the banks like SBI, AXIS, HDFC, and ICICI. The documents needed are as follows:
- An Account Opening Form for PPF Account (generally, Form A)
- You must have 2 recent passport size photographs.
- Xerox of your PAN card (or the form 60-61 in case you do not have a PAN card).
- A proof of your residence address i.e. Passport or Electricity Bill.
- In the case of a minor, you will need a proof of age as well.
- PPF Nomination form if you want to name a nominee)
These are the general documents that are required by all banks. However, a bank may ask for some other documents as well. So be prepared.
How to open a PPF account?
You will have to follow the steps given below in order to open a PPF account in SBI, ICICI, AXIS or HDFC Bank.
- Do remember that only a few selected branches of these banks have the authority to open PPF accounts.
- You will be able to find the list of such branches that have this authority from any branch of these banks or you can also call their Customer Care and ask them.
- So, just find the nearest branch that will allow you to open a PPF account.
- You have to then go to this selected branch, collect a PPF Form A.
- If you’re having trouble identifying the application form, below are some pictures of it. Else, you can also ask for this form at the bank’s inquiry counter.
- Once you’ve got the Form A, fill it completely with all the details. You can then submit the form along with the required fees.
- After the bank is done reviewing it, it will issue the PPF account passbook, and your account will be opened and you will be able to access it.
- You are allowed to open a PPF account for Rs.100, but it mandatory on your part that you need to deposit a minimum of Rs.500 each year.
- You will have the facility of online banking and cash deposits to make deposits in your PPF account.
What is the rate of interest offered on PPF accounts?
The Government of India gives regular updates and announces the rate of interest that is offered on PPF account deposits. The current interest rate on PPF, starting from 1st of April 2017, is 7.90%. You can use a PPF calculator to determine the maturity amount in your account.
For more details, you should check out the HDFC Bank website. This process is similar to SBI and other banks as well.
Below is the list of all the banks that offer PPF Services
|State Bank of Jaipur|
|IOB – Indian Overseas Bank|
|State Bank of Patiala|
|PNB – Punjab National Bank|
|Central Bank of India|
|United Bank of India|
|Bank of Maharashtra|
|BOI – Bank of India|
|State Bank of Travancore|
|State Bank of India or SBI|
|State Bank of Hyderabad|
|State Bank of Mysore|
|Union Bank of India|
|Oriental Bank of Commerce|
|BOB – Bank of Baroda|
|State Bank of Bikaner|
If you have any queries or suggestions, please leave a comment below.