How to Open a Public Provident Fund (PPF) Account – Steps and Eligibility


Public Provident Fund (PPF) Account 

Public provident fund(PPF) scheme is used to mobilize small savings by offering an investment with reasonable returns combined with income tax benefits. It was introduced by the National Savings Institute of the Ministry of Finance in 1968. PPF is a 15 year scheme with minimum invest rate of Rs.500/- to maximum Rs. 1,50,000/- per year.



Eligibility to open a PPF account

  • applicant should be a resident of India
  • Opening of PPF accounts in the name of Hindu Undivided Family is not permitted
  • Only one PPF account can be maintained by an Individual, except an account that is opened on behalf of a minor
  • Non-resident Indians (NRIs) cannot open a PPF account. However, account-holders who leave the country and obtain non-resident status after having opened a PPF account can continue to maintain their accounts until the end of the account’s 15 year term.

PPF account can be opened at Branches of State Bank of India and it subsidiaries, Selected branches of designated nationalized banks and  Selected Post Offices across India.

To open PPF account  visit a post office or branch of a bank that has been authorized, to obtain required forms. Fill the form and submit along with the required documents. An initial deposit has to be made to open the account.

To open accounts online  visit a bank’s official website or through third-party financial services providers’ sites that provides online forms for the opening of PPF account.

Features of PPF

  • Interest rate is 7.8% (PPF interest is calculated on the basis of minimum balance in your account between the 5th and the last day of every month)
  • Interest is completely tax-free.
  • Initial investment/deposit is Rs.100/-
  • Customers can avail the loan facility between third financial year to sixth financial year
  • Starting from seventh year one can make one withdrawal per year
  • Fund is transferred between bank branches or post offices for free.
  • Free from court attachment
  • Ideal investment option for both salaried as well as self employed classes.
  • Deposits can be made in lumpsum or in 12 installments

Documents Needed to open PPF account are,

  • Photographs
  • Residence proof –  Aadhar Card,  Rental/Lease Agreement, Voter’s ID, Employer’s letter, Passport, Bank Account Statements, Ration Cards, Driving License, Signed Cheque, PAN Card
  • The account opening form, along with nomination form if nominees are being named.
  • Copy of PAN card

No premature closure of the account is allowed apart from certain special cases like the unfortunate case of the death of a customer. Their nominee /legal heir can close the account by submitting the required documents as guided by the Ministry of Finance.

If you fail to deposit the minimum amount of Rs. 500/- in a year then the account will be marked as a deactivated account. Once you pay penalty of Rs. 50/- it will be reactivated.

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