The Indian Government launched the Public Provident Fund (PPF) account with the main aim of helping individuals save money for the long run.
- Interest rate is 7.9% p.a.
- Payments can be made in instalments
- Only one account per individual
- Tax benefits are provided
The scheme provides a high rate of interest and guaranteed returns. India Post offers various savings schemes and one among them is the PPF scheme. India Post has over 1.5 lakh post offices all over India. Therefore, individuals will be able to gain access to the scheme easily.
Procedure to open a PPF account at India Post
The procedure to open a PPF account at a post office is mentioned below:
- Individuals can download the account opening application online or can get it at the nearest post office or sub-post office.
- The application form must be completely filled and submitted at the post office along with a passport-size photograph and Know Your Customer (KYC) documents.
- The initial deposit of Rs.100 that is required to open an account must be paid. Initially, individuals are allowed to make a maximum payment of Rs.70,000. However, for a financial year, individuals are allowed to make a contribution of Rs.1.5 lakh.
- After the individual submits all the relevant documents along with the initial deposit, the PPF account passbook will be given to them. All relevant details such as PPF account number, name of the branch, and name of the account holder will be mentioned on the passbook.
Interest rate of an India Post PPF account
The PPF account interest rate is opened at a post office is 7.9% p.a. and it is compounded on a yearly basis. The interest that is generated from the contributions made towards PPF is also tax exempt.
Features of an India Post PPF account
The main features of an India Post PPF account are mentioned in the table below:
|Payment for opening of account||Individuals will be able to open an account by paying an amount of Rs.100. Opening of the account can be done by cheque or cash. In case of cheque payments, the date the cheque realises will be the account opening date.|
|Minimum and maximum amounts||The minimum amount that must be deposited in a year is Rs.500 and the maximum amount that must be deposited in a year is Rs.1.5 lakh.|
|Nominations||Nominees can be added at the time of opening an account or after the account has been opened.|
|Maturity period||The account matures after 15 years. However, individuals will be able to extend it by a further 5 years by requesting an extension 1 year before maturity. The value of maturity can remain the same without further deposits as well.|
|Loan facility||Individuals can avail a loan against PPF account after the third financial year from when the account was opened.|
|Tax deductions||Under Section 80C of the Income Tax Act, the contributions made towards the account are tax-free. The interest that is earned on the contributions is also tax exempt.|
|Withdrawal||Individuals will be able to make withdrawals from the account on a yearly basis after the completion of 6 financial years from the date of opening the account.|
|Premature closure||Individuals will not be able to preclose the account before the 15-year maturity period.|
|Minors||Subscribers who have already opened an account can open another account on behalf of a minor. However, the maximum investment limit will be the addition of the contributions made towards both the accounts.|
|Mode of payment||Payments can be made in a lump sum or in a maximum of 12 instalments.|
|Joint accounts||Under the PPF scheme, joint accounts cannot be opened.|
Eligibility for opening a PPF account in a post office
The eligibility criteria to open a PPF account at a post office are mentioned below:
- Individuals who are self-employed, pensioners, work for private companies, or are a part of a similar category will be eligible to open a PPF account at India Post.
- The mother or father can open a PPF account on behalf of their child (in case of a minor). In case the mother or father who has opened the account passes away, the child will not be able to continue the account. Under such circumstances, the account will be closed, and the money will be refunded.
- Every individual can open only one account under his/her name. In case individuals open two accounts, the principal amount of the second account will be refunded and the account will be closed.
- Non-Resident Indians (NRIs) are not allowed to open a PPF account. In case the account was opened when they were residing in India, the account can remain active until maturity.
- PPF accounts can only be opened at Double handed post offices or above.
Documents required to open a PPF account in a post office
The list of documents required to open a PPF account at a post office is mentioned below:
- The Permanent Account Number (PAN) Card.
- The address proof of the individual such as Aadhaar card, Driving Licence, Passport, etc. must be submitted.
- The ID proof of the individual such as Aadhaar Card, Passport, Driving Licence, Voter’s ID must be submitted.
Investments made towards PPF are safe since the scheme was launched by the government. Individuals will also get guaranteed returns as the scheme does not depend on the market. The process to open and operate the scheme is also very simple. The scheme popularity also increases as all contributions up to a maximum of Rs.1.5 lakh and the interest that is generated from the contributions are tax exempt.
FAQ’s On PPF Account in Post Office
- Can you tell me what the lock-in period is for a Post Office PPF account? Does this mean I can’t make withdrawals from the PPF deposits?
- Can I avail an extension in the account tenure after the 15 year lock-in period?
- Will tax be added on the interest accrued in a PPF account?
- What if I relocate? Will I have to close my PPF account?
- How accurate is the PPF calculator?
- What is the minimum and the maximum amount that can be deposited in a post office PPF account in a year?
- Is there any limit on the number of times an account holder can make deposits into their PPF account?
- Is the PPF facility only offered at post offices?
- I am a self-employed individual. Can I open a PPF account?
- I have a 10-year old child for whom I would like to open a PPF account. Can I do so?
- If a non-resident Indian ,who had opened a PPF account in India but migrated abroad while the account was in the lock-in period, still make deposits to the account?
- Can I get a PPF account opening form online or do I have to visit a post office to procure the same?
- Can a resident-turned-NRI PPF account holder avail the account tenure extension of 5 years?
- Is there any online tool using which i can calculate the interest that i will earn in my PPF account?
- What information will I need to provide in order to calculate the interest using the PPF Calculator?
- What is the procedure to open a PPF account with a post office?
The Post Office PPF account has a lock-in period of 15 years. Once a customer enrolls into it, it cannot be closed before the completion of the lock-in period. PPF account holders can make partial withdrawals from the beginning of the 7th year of the scheme. These partial withdrawals can be made only up to 50% of the PPF savings accumulated.
PPF account holders can make an extension of 5 years after the 15 year lock-in period.
All deposits as well as the interest earned is exempted from tax.
No, all you have to do is apply for a transfer from one post office to the post office now close to you. This can be done by filing for a transfer via the form, submitting your KYC documents, current passbook and so on.
The PPF calculator makes an estimate - just to give you an idea of how much you can save. It cannot be completely accurate as the PPF interest rates are revised every quarter.
Account holders can make deposits of as low as Rs.500 into their PPF account in a year. The maximum amount that can be deposited into a PPF account is capped at Rs.1.5 lakh.
Yes, as per the rules laid down, an account holder can only make 12 deposits into their account in a year.
No, customers can also open a PPF account at any nationalised bank that offers the facility. Some nationalised banks that offer PPF accounts are State Bank of India (SBI), Canara Bank, Punjab National Bank, Corporation Bank, Bank of Baroda, among many others. The facility is also offered by major private banks such as ICICI Bank, Axis Bank, and HDFC Bank.
Yes, a PPF account is not only available to salaried employees but also self-employed individuals.
Yes, you can certainly do so. In case of minor children, the PPF account opening guidelines allow parents or guardians of minors to open a PPF account on behalf of the latter.
Yes, NRIs who have moved abroad while their PPF account was in the lock-in stage can still make contributions to the account.
The PPF account opening form is available not only at the post office but also online. To download the form online, you must visit the India Post website. On the bottom portion of the website’s main page you can find several tabs, one of which is labelled ‘Forms’. Clicking on that tab will lead you to a new page which will contain 5 different sections, one of which is ‘Saving Bank’. Under this section, you can find the downloadable PDF format of the PPF account opening application form.
No, the facility of deposit tenure extension is not provided to those individuals who may have opened an account and then migrated abroad and achieved the status of NRIs.
Yes, there is a special online tool known as a ‘PPF Calculator’ which will help you do just that. This tool is available on the websites of several leading banks that offer the PPF account facility, and also on some third-party websites like Bankbazaar.
To calculate the interest that you will earn, you must provide some account-related information like the year in which you started your PPF account, the amount that you have deposited into the account at the start of the year, and the interest rate currently applicable for PPF accounts.
To open a PPF account with a post office, you must first gather all the necessary documents. Obtain the form from the post office and fill it up correctly. You will need to provide the details of the nominee that you will be choosing for this account. Also make sure to take some original identity proof with you for the purpose of verification. To open the account, you will require to provide the signature of one witness after which the account opening formalities will be complete. You can open your PPF account with a minimum initial deposit of Rs.100.
PPF Top Pages
- PPF Balance
- PPF Online Payment
- PPF Deposit Limit
- PPF Calculator
- PPF Rules
- How to Open PPF Account Online
- PPF Interest Rate
- PPF Account Opening Form
- Change Nominee Name in PPF
- PPF Withdrawal Rules
- Axis Bank PPF Account
- Bank of Baroda PPF Account
- Central Bank of India PPF Account
- Union Bank ppf account
- PPF Claim Status
- PPF Tax Benefits
- PPF Death Claim Form
PPF Other Pages
- SBI PPF Account
- ICICI bank PPF
- Bank of India PPF
- Canara Bank PPF
- Andhra Bank PPF
- Vijaya Bank PPF
- Oriental Bank of Commerce PPF
- Bank of Maharashtra PPF
- Dena Bank PPF
- United Bank of India PPF
- Punjab & Sind Bank PPF
- Age Limit for PPF
- Loan Against PPF Account
- PPF Transfer
- PPF Account Closing Form
- PPF Account for NRI
- Investment on PPF
- PPF Account Statement