PPF Scheme

In a world where financial stability is a critical aspect of a secure future, planning for the same becomes a significant part of our lives. The Public Provident Fund (PPF) Scheme, offered by [Bank Name], is a government small savings scheme that provides a secure platform for individuals to accumulate wealth while enjoying attractive interest rates and tax benefits. This comprehensive guide aims to educate you about the PPF Scheme, its features, and how you can take the first step towards securing your financial future.

What is the PPF Scheme?

The PPF Scheme is a government-backed savings initiative available through [Bank Name]. Designed to encourage disciplined savings, it offers an attractive interest rate and various tax benefits. The scheme is an excellent choice for individuals seeking a reliable and secure long-term investment option.

Key Features of the PPF Scheme

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      Opening a PPF Account under PPF Scheme

Eligibility: Any individual or a guardian on behalf of a minor can open a PPF account.

Unique Features: Only one account can be opened by an individual, either in a bank or post office. NRIs, HUFs, and associations of persons are not authorized to open accounts. Power of Attorney holders are not permitted to open or operate PPF accounts.

1. 1. Subscriptions in PPF Account under PPF Scheme

Investment Limits: Minimum deposit: Rs. 500, Maximum deposit per year: Rs. 1,50,000

Subscription Details: Annual subscriptions can be made in one or more installments. Penalty for non-subscription: Rs. 50 per year of default, along with the minimum subscription amount of Rs. 500 per year.

1. 1. Nomination

Nomination Process: Customers can nominate more than one person for a PPF account. Change of nominee can be done by the customer.

1. 1. Interest Payment

Interest Calculation: Interest is calculated on the monthly minimum balance between the 5th and last day of the month. Interest rates are updated quarterly by the Government of India.

1. 1. Extension of Deposit

Extension Period: PPF accounts can be extended for 5 years from the date of maturity.

Application Process: Application for extension must be submitted within one year from the maturity date.

1. 1. Withdrawals

Eligibility for Withdrawals under PPF Scheme: Partial withdrawals allowed after 5 years from the end of the financial year in which the initial subscription was made.

Withdrawal Limits: Maximum withdrawal: 50% of the balance outstanding at the end of the fourth year or the preceding year, whichever is lower.

1. 1. Loans Against PPF under PPF Scheme

Loan Criteria: Loans can be granted after 1 year but before 5 years from the end of the year in which the initial subscription is made.

Loan Amount: Loan amount: 25% of the balance outstanding at the end of the 2nd year.

1. 1. Closure/Premature Closure in PPF Scheme

Closure Process: PPF accounts can be closed at the end of 15 years.

Premature Closure Criteria: Premature closure is allowed in specific cases, subject to certain conditions.

1. 1. Continuation of PPF Account Without Deposits

PPF accounts can be continued without deposits after maturity. Partial withdrawals can be made.

1. 1. Death of PPF Customer

Procedure After Death: Account continues to earn interest until the end of the preceding month in which the deposit is paid to the nominee/legal heir.

1. 1. Tax Concessions under PPF Scheme

Tax Benefits: PPF deposits are eligible for Income Tax exemption under Section 80C. Interest credited and withdrawals are also exempt from Income Tax.

1. 1. Protection Against Attachment

Asset Protection: PPF accounts are generally protected from attachment, except by income tax and estate duty authorities.

1. 1. Transferability in PPF Scheme

PPF accounts can be transferred to other authorized banks and post offices.

1. 1. Turnover Commission Earned 

Bank is eligible for a commission based on PPF transactions under the PPF Scheme

Steps to Open a PPF Account under PPF Scheme

Now that you understand the key features of the PPF Scheme, let’s delve into the step-by-step process of opening a PPF account.

1. 1. Step 1: Gather Necessary Documents

• – Identity Proof: Aadhar Card, Passport, Voter ID, Driving License, etc.
• – Address Proof: Aadhar Card, Passport, Utility Bills, Bank Statement, etc.
• – Passport-sized Photographs
• – PPF Account Opening Form: Form A

Note: If you already have a savings account with your bank, you do not need to resubmit your KYC-related documents. Just request a PPF account opening application and fill out the application form with a mandate to transfer funds from your savings account to your PPF account. We suggest applying for a Standing Instruction to transfer funds from your savings bank account to your PPF account automatically on a monthly basis, as per your preferred date and amount.

• Step 2: Visit the Nearest Bank Branch
• – Locate the nearest branch authorized for PPF account operations.
• Step 3: Complete the Application Form
• – Fill out the PPF account opening form (Form A) accurately and provide all required details.
• Step 4: Submit Required Documents
• – Submit the completed form along with the necessary documents (identity proof, address proof, photographs) to the bank personnel.
• Step 5: Deposit the Initial Amount
• – Deposit the initial amount required to open the PPF account. The minimum deposit is Rs. 500.
• Step 6: Obtain the PPF Passbook
• – After the account is successfully opened, you will be provided with a PPF passbook containing the account details and transactions.
• Step 7: Access Your PPF Account
• – Monitor and manage your PPF account through online banking or by visiting the branch.

Conclusion

The Public Provident Fund (PPF) Scheme offered by various Banks is a secure and rewarding investment avenue for individuals looking to secure their financial future. With its attractive interest rates, tax benefits, and flexibility, the PPF Scheme stands as a reliable option for long-term savings. Take the step towards a secure financial future today. Open a PPF account with any Bank as per your convenience and embark on a journey of financial stability and prosperity. Start saving, start investing, and watch your wealth grow.

Links to know more about PPF account facility offered by your Bank are mentioned below:-

1. State Bank of India (SBI)
2. HDFC Bank
3. AXIS Bank
4. Bank of Baroda (BOB)
5. Canara Bank
6. UCO Bank
7. Bank of India (BOI)
8. Indian Overseas Bank (IOB)
9. ICICI Bank