Open PPF Account – Individuals are allowed to open PPF Accounts online only in banks. It is not possible to open a PPF account online in post offices. In some banks, it is possible to open a partial online account as well as a full online account. Public Provident Fund (PPF) account is a very popular, long-term investment and savings product. Individuals investing in the account can also avail of tax benefits. PPF accounts can be opened in post offices as well as banks. Individuals can now open a PPF account online to ease the account opening process.
Open PPF Account Online
However, the most common question often asked is ‘How to open a PPF account? ‘ The answer is simple. You can open a PPF account in a bank or post office. PPF or Public Provident Fund is a great way for small investors to build long-term wealth by investing in small amounts regularly. In fact, they offer great benefits in the form of investments, which you can read about here. If you are an existing customer of any bank, you can open a PPF account online within minutes. But if you prefer the traditional model of banking, you can also visit any branch.
A Public Provident Fund is a financial instrument that allows the user to save a substantial amount to be received at the time of maturity along with accrued interest. The National Savings Institute of the Ministry of Finance launched the PPF scheme in the year 1968, which aimed to allow users to save money annually to build a retirement corpus. In other words, PPF can be termed as long-term savings cum investment instrument or savings cum tax saving investment. There is much more to know about PPF, its benefits, withdrawal rules, and much more. Let us understand it in detail.
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Important Things to Know About PPF Account
PPF or Public Provident Fund allows an individual to create a retirement corpus to save a part of his income annually while earning competitive interest on the deposits and also availing tax-saving benefits. PPF was introduced to encourage the savings habits of people, especially those not covered under the Employees’ Provident Fund Organization (EPFO). Investing in a PPF account earns individual interest on the capital amount and allows one to claim a tax deduction of up to Rs. 1.5 lakh under section 80C of the Income Tax Act.
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Eligibility to Open a PPF Account
- If a Non-Resident Indian (NRI) has opened the account while being an Indian resident, the account can be continued for 15 years.
- However, NRIs do not have the option to extend the account.
- Hindu Undivided Family (HUF) is not allowed to open a PPF account.
- There can be only one account in the name of one person.
- Individuals can also open a PPF account on behalf of a minor.
Features of PPF or Public Provident Fund
PPF or Public Provident Fund is a great way for small investors to build long-term wealth by investing in small amounts regularly. In fact, they offer great benefits in the form of investments, which you can read about here. However, the most common question often asked is ‘How to open a PPF account? ‘ The answer is simple. You can open a PPF account in a bank or post office. If you are an existing customer of any bank (SBI, PNB, HDFC, etc.), you can open a PPF account online in minutes. But if you prefer the traditional model of banking, you can also visit any branch.
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PPF Account – Rate of interest
- The interest paid on PPF is calculated every month and the amount is credited to the account after the completion of the financial year
- The interest rates are fixed by the government every quarter.
- The interest rate is calculated every month from the 5th of every month till the last date of the month on the reduced PPF balance in the account.
- It is advisable to contribute the amount to the PPF account before the 5th of every month
Public Provident Fund Account – Lock-in Period
- The minimum lock-in period of PPF is 15 years
- A person can withdraw the entire amount at the end of 15 years
- An individual can keep the amount invested in the PPF account for a longer period without making any contribution
- There is no bar on holding the amount invested in the fund after the lock-in period of 15 years
- Premature evacuation is allowed but only in case of urgency and emergency. In such special cases, necessary documents and details should be submitted
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PPF Account – Investment
- Individuals need to invest Rs. 500 as a minimum price
- Amount of Rs. 1.5 lakh can be contributed to the PPF account
- Any contribution above 1.5 lakh will be automatically rejected
- The deposit can be made by cash, cheque, demand draft, or online
Public Provident Fund Account – Enrollment
- A PPF account holder can nominate more than one person
- By nominating one person or more than one person, all the nominees are required to mention the percentage of share
- No nomination facility in case of PPF account for minors
PPF Account – Loan
- PPF account holders can get a loan against the balance in the PPF account
- The loan can be taken between the 3rd and 6th financial year of account opening
- The interest charged on the PPF account is 2% per annum
- The principal amount has to be repaid within 36 months from the first day of the month following the month in which the loan was taken
- The principal can be paid in a lump sum or in two or more monthly installments
- Failure to pay the principal amount within 36 months will attract interest at the rate of 6% p.a.
- In case of availing loan against PPF account, no interest will be paid to an individual till the loan amount is repaid
- It is not possible to take a second loan until the first loan amount is paid.
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Steps to Open PPF Account Online
- You must be a Bank savings account holder.
- You must have Net Banking/ Mobile Banking enabled for your account.
- Your ‘Aadhaar’ number should be linked to your account.
- Your mobile number which is linked with your Aadhaar must be activated to receive an OTP, which is used to e-sign / e-authorize the PPF account opening immediately.
Steps to Open PPF Account Offline
- Sign in to Bank Net Banking.
- Under the Offers tab, click on the banner ‘Public Provident Fund’.
- Confirm the details shown on the next screen and enter the amount you want to deposit.
- Select whether you want to add a nominee and click on submit.
- If your Aadhaar is already linked with your account, your form will be submitted, and you will receive a message that your account will be opened in one working day.
- If your Aadhaar is not linked, then to be able to complete the process, you must first link it.
- Once you have opened a PPF account online, you can transfer funds directly from your savings account to your PPF account.