The National Savings Institute of the Ministry of Finance launched the Public Provident Fund in 1968 as a savings-plus-tax-saving vehicle in India. The scheme's goal is to encourage people to save small amounts of money by providing a safe investment with tax benefits. We at Complete Circle would propose an investment in PPF (Public Provident Fund) as one of the strategies to develop a long-term corpus. PPF contributions are deductible under Section 80C of the Income Tax Act. Here's how to create a PPF account at a bank or post office, including the steps to take.

Public Provident Fund Features

  • The Central Government of India's Public Provident Fund Plan is a legislative scheme.
  • The Scheme is for a period of 15 years.
  • The Ministry of Finance, Government of India, sets the yearly Public Provident Fund Interest Rate, which is now 8.7% compounded annually (as of April 1st 2014 - March 31st 2015).
  • In a financial year, the Minimum Deposit In PPF is Rs. 500 and the maximum deposit is Rs. 1,50,000.
  • Each financial year, one deposit of a minimum of Rs.500/- is required.
  • The deposit can be made in one lump payment or in monthly instalments, with a maximum of 12 instalments per year or two instalments per month, up to a total deposit of Rs.1,50,000/- each fiscal year.
  • Making a deposit every month of the year is not required. The amount of the deposit can be changed to fit the account holders' needs.
  • The account in which deposits are not made for any reasons is treated as discontinued account and such account cannot be closed before maturity. Check out NSC Bonds Post Office also here!
  • Discontinued accounts are those in which deposits are not made for whatever reason, and such accounts cannot be terminated until maturity.
  • The account can be reactivated by making a Minimum Deposit PPF Account of Rs.500 and paying a default charge of Rs.50 every defaulted year.
  • A person or a minor through a guardian can open an account.
  • A joint account is not allowed. Build your plan now!
  • PPF accounts can be opened by those who contribute to the GPF Fund or the CPF/PF account.
  • A PPF account cannot be opened or operated by a Power of Attorney holder.
  • Grandfathers and mothers are unable to create a PPF account on behalf of their underage grandchildren
  • The deposits must be made in multiples of Rs.100, with a minimum of Rs.500.
  • A deposit in a minor account is combined with a deposit in the Guardian's account for a total PPF Maximum Deposit of Rs.1,50,000/-
  • According to the Public Provident Fund Scheme of 1968, a loan against PPF deposits is available from the fourth to the sixth year of deposit, up to a maximum of 25% of the amount deposited at the end of the previous financial year. The loan has a 36-month repayment period. There is a 15-year lock-in period, after which the money can be withdrawn as a whole. Premature withdrawals are allowed starting at the end of the sixth financial year after the account was opened. The maximum amount that can be taken early is equal to 50% of the balance in the account at the end of the fourth year before the year in which the amount is removed, or the end of the previous year, whichever is lower. Try Planning & suggestion from us.
  • There is no minimum age to start a PPF account.
  • Withdrawals or premature closure of a PPF account are not permitted unless the account holder dies. A nominee/legal successor of a PPF account holder cannot continue the account; instead, the account must be cancelled.
  • The account user can choose to prolong their or her PPF account for any term for up to 5 years at a time
  • The account holder can keep the account once it matures for as long as he or she wants without making any additional deposits. Until the account is terminated, the money in the account will receive interest at the regular rate applicable to PPF accounts.
  • In such accounts kept for more than 15 years, one withdrawal each financial year is permitted, subject to a maximum of 60% of the amount after the 15-year term.
  • The PPF scheme is handled by Post Offices and Nationalized Banks through their licensed branches, according to a government notification.
  • Accounts can be transferred from one Post office to another, as well as from one Bank to another.
  • Accounts can be transferred from one bank to another and from one branch to another within the same bank
  • PPF deposits are eligible for a tax refund under section 80-C of the Internal Revenue Code.
  • Deposit interest is completely tax-free.
  • Deposits are not subject to wealth tax.
  • The remaining balance in your PPF account is not susceptible to attachment under any court order or decree for any obligation or responsibility. Check out Minimum Investment In PPF now!
  • It is possible to nominate more than one individual.
  • According to a government announcement, Post Offices and Nationalized Banks administer the PPF plan through their licensed branches.
  • Accounts can be moved between Post offices and banks.
  • Accounts may be complicated. Check out what happens while there is a PPF Account Holder Death!

Documents Required for PPF Account

Documents for the PPF account are similar to the any other account in banks.

  • A recent passport size photograph.
  • Identity Proof copy with original to verify (Even PAN Card may be accepted as all taxpayers have it
  • Address Proof copy with original to verify
  • Account opening form for PPF(available on Bank’s website)
  • Paying in slip for PPF a/c (available on Bank’s website)
  • Nomination form for PPF (available on Bank's website)
  • Account number of the saving account in the respective bank (if you are having you're a/c with the Bank
  • Online investments

Online investments

Can PPF investments be done online as well, with practically every investment choice, such as equities, mutual funds, fixed deposits, and bonds, available at the touch of a mouse? You cannot, though, if you have a post-office account. Try our Equity Research once.

However, certain banks allow internet transfers. For example, if you have an SBI PPF account and an ICICI Bank salary/savings account, you may use net banking to add the SBI PPF account as a payee/beneficiary for transfers from your ICICI account. Money can also be moved from your Citibank savings account to your State Bank of Mysore PPF account.

Additionally, if you have a savings account and a PPF account with the same bank, you can link the two. You do not need to make the PPF account a third-party beneficiary in this scenario. Money can be sent immediately. You may also check the credits to your PPF account online, much like your bank statements.