A Public Provident Fund (PPF) account from Central Bank of India is among the best savings-cum-tax-savings bank accounts in which you could park and grow your funds with tax-free compounding interest. The PPF scheme was introduced in 1968 and offers a way to save on tax and earn a decent rate of interest with which to secure your finances in the long run.
How to open a Central Bank of India PPF account?
To open a PPF account in the Central Bank of India, simply follow these easy steps:
- Acquire an account opening form (PPF Form A).
- Acquire a Pay-In Slip (PPF Form B).
- Acquire a Nomination Form (PPF Form E). All these forms are available at any of the official bank branches.
- Fill in PPF Form A, PPF Form B and PPF Form E with all necessary details.
- Submit the forms, along with all required documents to the bank.
- Your PPF account will be open once the application is reviewed and approved.
Documents required to open PPF account in the Central Bank of India
To open a PPF account in Central Bank of India, you will need the following documents and duly filled-out forms:
- Account opening form – Form A.
- Pay-In slip – Form B.
- Nomination form – Form E.
- Identity proof – Submit a copy of either your driver’s license, PAN card, passport, etc. with the original to verify.
- Address proof – Submit a copy of your telephone bill, utilities bill, ownership papers, etc. along with the original to verify.
- Passport sized photographs – Two recent passport sized photographs are required.
Central Bank of India PPF account opening form
Form A requires you to fill in certain details, as mentioned below:
- Name of the applicant or name of the guardian (in case of minors).
- Permanent address and communication address.
- Central Bank of India savings bank account number.
- PAN card details.
- Initial contribution.
- Debit mandate.
- Debit account number.
- Standing instructions. And in the case of minors:
- Date of birth of minor.
- Applicant’s relationship with minor.
- A declaration that no other PPF account is being held, other than on behalf of minors or a Hindu Undivided Family (HUF) or an association of persons.
- Details of PPF accounts being held in the above cases.
Central Bank of India PPF Rules and Guidelines
- Eligibility: The PPF account is available only to resident Indians who are over the age of 18. Guardians can open PPF accounts for minors.
- Number of Accounts: Only one account is allowed per person. Multiple accounts are not permitted, but one person can manage the accounts of a minor, Hindu Undivided Family and association of persons in addition to his/her own account.
- Duration: The account matures after a 15 year lock-in, and all accumulated funds in the account can be withdrawn upon maturity. Extensions are allowed in blocks of 5 years at a time. Accounts can be kept open after maturity for any period without making deposits, the balance will continue to earn interest.
- Premature closure: The accounts cannot be surrendered or closed in any situation except the death of the account holder, nominees and legal heirs.
- Joint account is not allowed.
- Deposits: The minimum deposit is Rs.500 and the maximum deposit is Rs.1,50,000, every financial year. Deposits can be made in a lump sum, or in (a maximum of 12) instalments over the year.
Features and Benefits of a PPF account from Central Bank of India
- Loans: You can avail a loan against your PPF deposit account after the 3rd year of its inception. Loans can be availed up to 25% of the total balance at the end of 2nd last financial year. For example, if your account has been active since FY 2010-2011 – you will be able to take a loan only from FY 2013-2014, and the maximum amount will be 25% of the balance as of the end of FY 2010-2011.
- Premature withdrawals: Amounts from the account can be withdrawn prematurely, from the end of the 4th financial year from when the account was created. You can only withdraw up to 50% of the balance at the end of the previous year, or at the end of the 4th year, whichever is lower.
- Tax benefits: Funds in the account and interest earned thereon qualify for tax deductions under Section 80C of the Income Tax Act, 1961. Deposits are also exempt from Wealth Tax.
- Account deactivation and reactivation: If an account has no deposits for a considerable period of time, it will be deactivated but not closed. It can be reactivated with a minimum payment of Rs.500 and a penalty of Rs.50 for each defaulted year.
Central Bank of India PPF interest rate
The interest on PPF accounts from Central Bank of India and all other banks is set by the Government of India’s Ministry of Finance. As on FY 2014-2015, the PPF interest rate is 8.7% and is compounded annually.
With regard to making deposits, it is advised to do so at any time between the 1st and 5th of every month, as interest is calculated on the balance in the account between the 5th and last day of the month.
Central Bank of India PPF calculator
If you want to figure out the balance in your PPF account at maturity, you can use a PPF calculator. A PPF calculator takes into account the following information to calculate your maturity value:
- Rate of deposits - monthly/quarterly/half-yearly/annually.
- Amount being deposited.
- PPF account tenure.
- Interest rate (currently at 8.7%).
How to deposit money in your Central Bank of India PPF account?
You will need to fill out and submit Form B, which is a deposit slip. This form contains the following details:
- Branch name.
- Name of subscriber.
- PPF A/c number.
- Amount of deposit.
- Denominations of currency or cheque/DD number and date.
- Bank/branch on which drawn.
- Depositor’s signature.
Submit the form at the bank branch with the money and start earning tax-free interest.
How to transfer your PPF account from the post office to Central Bank of India?
If you have an existing PPF account at the post office and wish to transfer it to the Central Bank of India you just need to fill out a form and pay a small fee. You’ll need a written application for the transfer and a duly filled out transfer form and submit both of these to the post office to initiate the transfer. Once the post office receives and processes these documents, the bank is notified and a cheque with your entire balance is sent to the bank and the account at the post office is closed.
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