A PPF or Public Provident Fund is a tax-free savings program managed by the Indian government, with interest on the account established for each quarter and paid by the government. The interest rate applicable to the PPF for the first quarter 2020-2021, i.e. from January 1 to March 31, 2020, has been set at 7.9%. The interest rate for October, November and December 2019 is also the same, at 7.9%.
PPF accounts can be opened in post offices, nationalized banks and large private banks such as ICICI and Axis Bank. In various banks such as ICICI and Axis Bank, you can also open a PPF account online via Net Banking. Upon opening the account, a passbook type booklet is issued, which records all transactions such as subscriptions, interest, withdrawals, etc. However, some other banks simply allow posting of PPF notes online rather than issuing a passbook.
As a publicly funded system, the capital and interest on your PPF account is guaranteed and secure
Contributions to the account up to Rs 1.5 lakh per year and interest on savings are tax exempt
The interest rate on the PPF account is set by the government on a quarterly basis. It should be noted that PPF yields are higher than the FD rates of many banks during this period.
The PPF account is protected from the confiscation of a court decision or an order under the Government Savings Banks Act of 1873.
The PPF account opening form (Form A) is available in certain bank branches or can be downloaded online.
Proof of identity
Photo of the account holder
Anyone residing in India can only open one PPF account. NRIs are not allowed to open PPF accounts. However, an Indian resident who became NRI after opening a PPF account can continue to use the account until it expires. In addition, parents / legal guardians can also open PPF accounts for their minor children. The opening of shared and multiple accounts is not authorized.
To open a PPF account online, you need to do the following:
You must have an account with the bank where you open your PPF account
Connect to your Net Banking portal
Click on the “Open a PPF account” option.
Choose the appropriate option between an “own account” and a “sub-account”.
Enter the required information, e.g. B. the applicant’s contact details, bank details, etc.
Check details such as your permanent account number (PAN), etc. displayed on the screen
After reviewing the details, enter the amount you wish to deposit into your PPF account
You will be asked to provide standing instructions allowing the bank to deduct the amount at fixed intervals or at a flat rate
After making your choice, you will receive an OTP on your registered mobile number
Once this review is complete, your PPF account will be opened. It is recommended to save the account number displayed on the screen for future reference.
Some banks may even ask you to send the printed version of the data you entered with the reference number and send it to the bank with your KYC data.
It should be noted that each bank has a relatively different procedure for opening a PPF account. However, the general steps remain the same.
PPF is a long-term fixed-income investment. With EPFO, you can, therefore, track your account balance. The PPF savings booklet contains all the details of the investments made in your PPF account.
How to check your PPF balance online:
Before you start, make sure your Net Banking is active with your bank account
Connect to your PPF account with your Internet banking credentials
As soon as you are connected, the current balance of your PPF account is displayed on the screen
When you connect to your PPF account via Internet Banking, you can transfer money to your PPF account online, set up standing instructions for your PPF account, download your PPF account statement and submit your PPF credit request. Etc.
The minimum annual contribution which will be made to a PPF account is Rs. 500, while the maximum is limited to Rs. 1.5 lakh. The maximum limit applies to a person’s contributions for themselves and for a minor child. A maximum of 12 contributions is often made per annum.
PPF is a fixed income investment. The interest rate on the PPF account is communicated quarterly by the central administration.
Interest on PPF is calculated monthly on rock bottom balance between the top of the fifth day and therefore the Judgment Day of every month, that’s to mention for the calculation of interest. However, only the amount paid into the account before the 5th of the month is taken into account. If the money is deposited on the 6th of the month, no interest is paid on this amount during the corresponding month. Therefore, it is recommended to make deposits between the 1st and the 5th of the month to maximize the return.