SBI PPF Account - Know the Interest Rates

The PPF scheme from SBI offers decent returns on the money saved and also an interest-free return amount. Since, SBI is one of the most trusted names in the Indian banking industry hence the assurance of safety comes along too with the SBI PPF scheme.

SBI (State Bank of India) PPF Account

State Bank of India is the most popular public sector bank in India. Public Provident Fund or PPF is one of the schemes introduced by National Savings Organization in the year 1968. The aim of the organization via this scheme was to inculcate the habit of saving in the citizens of the country.

Earlier PPF schemes could only be obtained through post offices, however, a number of authorized banks are now entitled to open PPF accounts for customers. PPF account handling is easier in banks than post offices since deposit of cash can be done online whereas post offices do not provide online cash deposit facility.

Know about SBI Public Provident Fund(PPF)
Figure 1. SBI Public Provident Fund

How to avail SBI PPF Scheme

PPF account opening in SBI requires a PPF form to be filled and submitted along with some other documents required by the bank. Not all SBI branches offer PPF account opening facility and hence you are required to find out your nearest SBI branch that does. Once the duly filled PPF form and relevant documents are submitted your PPF account will be opened by the bank. A PPF passbook is furnished to you by the bank; this contains information regarding all your PPF transactions.

All Indian citizens can apply for PPF scheme either in their own name or on behalf of minors. Hindu undivided families cannot apply for a single PPF scheme in their name.

Documents required to open SBI PPF Account

Certain documents need to be submitted to the bank for PPF account opening. These documents should accompany a duly filled PPF account opening form. The list of these documents is mentioned below.

  • Duly filled PPF account opening form
  • Proof of identity. For example, driving license, PAN card, passport, voter’s id
  • Proof of residence or current address proof
  • Couple of passport size photographs

Mostly, SBI requires you to self-attest these documents and to carry the original documents for cross-verification during account opening.

SBI PPF Account opening Form

SBI PPF account opening form is a very short and simple form which requires customers to fill in some basic details like –

  • Name
  • Initial amount of deposit
  • Signed declaration for PPF account opening
  • Details of all PPF account held by customer till date
  • Signature of customer to signify compliance to all regulations that drive the PPF scheme

SBI PPF Account Rules & Guidelines

Certain rules and guidelines apply to PPF account opening with SBI. These rules and guidelines are to make customers aware about the various aspects of SBI PPFaccount.

  • Duration of SBI PPF scheme

    SBI offers PPF scheme for an initial duration of 15 years after which customers can request extensions in blocks of 5 years. One or more such 5 year blocks can be requested by customers.

  • Eligibility criteria to avail SBI PPF scheme

    All Indian individuals can avail the SBI PPF scheme either in their own name or in the name of minors. Hindu undivided families are not permitted to avail a single PPF scheme in their name.

  • Investment limit for PPF account

    A minimum investment of Rs.500 per annum or a maximum of Rs.1,50,000 per annum can be deposited as PPF amount. Any amount higher than Rs.1,50,000 earns neither interest nor any tax rebate and hence should not be invested. The amount deposited in the PPF account can either be deposited via single payment or via twelve installments per year.

SBI PPF Account Features and Benefits

  • Nomination Facility

    SBI PPF scheme offers nomination facility to customers. This nomination can be made in terms of the number of PPF shares too.

  • Tax benefits applicable on SBI PPF scheme

    SBI PPF scheme offers the most amazing tax benefits that any investment scheme has. The interest earned is totally exempt from income tax under section 88 of the Income Tax Act. The outstanding PPF amount for customers is also fully exempt from wealth tax payment. These tax benefits make PPF saving scheme one of the most lucrative savings tool.

  • Loans and withdrawals against SBI PPF account

    Loans from SBI against SBI PPF accounts are permitted. Similarly, partial withdrawals also are allowed on SBI PPF accounts. However, the loan amount and the amount of partial withdrawal is subject to the age of the PPF account and to the PPF Balance on any given date. Loans and withdrawals are basically under the sole discretion of the bank.

  • Transfer of SBI PPF Account

    The SBI PPF account can be transferred to any other bank or any other SBI branch or even to post office PPF upon transfer request by customer. This transfer of PPF account is totally free of any service charge.

How to open SBI PPF Account Online?

SBI, India’s largest bank, has the facility to apply for a PPF account online. It is part of the internet banking service provided by the bank.

Steps to be followed to open a PPF Account online

  • Access the official internet banking website of SBI i.e. onlinesbi.com. Log in to your personal account using the required credentials.
  • Find the ‘e-services’ section and click on ‘New PPF Account’. Your personal details and PAN are displayed.
  • The account can also be opened for a minor. In such a case, you will have to click on the check box provided under the details.
  • Then, mention the branch code. You can use the Branch Locator tool provided by SBI to find the five-digit branch code. The name of the branch is displayed once the branch code is entered.
  • You should then enter details of the nominees of the PPF account.
  • After filling in all the details, click ‘Submit’.
  • The PPF online application should then be printed and submitted to the branch along with a photograph and KYC documents within 30 days of online application. The online application form is partially filled and can be found under the ‘Print PPF Online Application’ tab.

10 things to keep in mind when opening a PPF account in State Bank of India (SBI)

National Savings Organisation introduced the Public Provident Fund (PPF) in the year 1968 in an effort to mobilise small savings. This scheme offers investors the opportunity to invest in a scheme that offers decent returns as well as tax exemptions. The latter means that the PPF account holder can enjoy tax-free contribution of up to Rs.1.5 lakh (per financial year), interest earnings, and maturity proceeds from the scheme as per the Income Tax Act, 1961.

Under the Public Provident Fund (Amendment) Scheme, 2016, investors can open a PPF account in State Bank of India. SBI is considered to be the largest banking and financial services provider in the country. Listed below are 10 important things to keep in mind when opening a PPF account in SBI:

  1. Anyone can open a PPF account for self or a minor as the legal guardian at one of the branches of SBI.
  2. The minimum and maximum investment limits of a PPF account are Rs.500 and Rs.1.5 lakh per year, respectively. If the investment limit exceeds Rs.1.5 lakh in a financial year then the excess sum will not be eligible for interest or tax exemption. The investment can be made in lump sum deposits or 12 installments in a financial year.
  3. The lock-in period of a PPF account is 15 years. After the completion of the said term, the account holder can choose to extend the tenure in blocks of 5 years.
  4. The government of India determines the interest rate of PPF. The interest is calculated on the available balance at the close of the 5th day of the month and the end of the month. Interest earnings are paid on the last date of March of every financial year.
  5. Account holders can take loans against their PPF accounts and are allowed to make partial withdrawals subject to certain terms and conditions. One withdrawal can be made every financial year after the 7th year and it should not exceed 50% of the account balance. Loans can be taken from the 3rd year to the end of the 5th financial year.
  6. Most investors prefer the PPF scheme for its tax exemptions on the contributions made, maturity proceeds, the interest earnings. The tax exemption on contributions made to a PPF account is limited to Rs.1.5 lakh per financial year.
  7. Investors can name one or more dependents as nominees at the time of opening a PPF account and the shares of the nominees can be determined by the investors.
  8. The PPF account can be transferred within a bank or post office (i.e. from one branch to another within SBI). Likewise, if a person has opened a PPF account in a bank and wants to transfer it to a post office, it is permitted, and vice versa. The transfer process is free of charge.
  9. Premature closure of a PPF account is permitted only if the account holder or dependents of the account holder require funds to treat serious ailments or pay for higher education. The premature payment is approved only if the account holder submits proof of the serious ailment or higher education in the form of supporting documents and bill payment receipts.
  10. Account holders can view their PPF account statements online in their SBI Net Banking Account. Furthermore, account holders can give standing instructions to SBI for periodically crediting their PPF accounts through netbanking.

If an investor had opened a PPF account as a Resident Indian and later became Non-Resident Indian, he or she can continue to have the account as per Govt OM no. F/01/10/2016-NS dated 23 February 2018. The National Savings Institute implements the PPF Amendment Scheme 2016 as well as other Small Savings schemes. Therefore, visit the official website to gather more information on the scheme.

Points to note while making PPF Payment Online

Once the PPF account has been created, deposits can be made. The amount that can be deposited is not fixed by SBI. The government, however, has fixed the minimum deposit limit as Rs.500 and maximum deposit limit as Rs.1.5 lakh per year.

Internet banking makes the process of depositing money quick and convenient. To transfer money to your PPF account, all you need to do is log in to your bank account and make the payment to the PPF account.

It is important to ensure that all details provided are precise.

  • The account number to be entered for transfer is the SBI PPF account number. Ensure that you enter the details correctly.
  • The name of the Payee should match the name of the account holder of the SBI PPF account.

Auto-debit or ECS facility for PPF Payment

SBI provides an auto-debit as well as an ECS facility to make payments towards your PPF account. All you need to do is furnish a form that states the amount that should be deducted and the frequency at which the deductions should be made. Once the facility is activated, the deposit to be made will be automatically debited from your account at intervals decided by you.

Interest Rate on SBI PPF Scheme

SBI offers an attractive interest rate for PPF account holders. Currently, the SBI interest rate is 8.7% per annum and translates into a better rate than any other investment option since the returns earned are totally tax-free. SBI pays the interest for full year on March 31st. The applicable interest amount is calculated on the minimum balance between the 5th and the last day of a month.

SBI PPF Calculator

SBI PPF calculator is a great financial tool to help you plan your PPF investment. The calculator takes into account the monthly or yearly investment that you are ready to make and also the applicable rate of interest and then computes the interest paid out to you over the 15 years of deposit period. This calculator is helpful in letting customers know the exact amount of return that they can get on their investment if the rate of interest doesn’t change. Using the PPF calculator also gives customers a general idea about how much investment is required for the end gain that they are expecting. This helps customers in planning their finances in a better way.

For investors who are looking to get decent returns and enjoy tax benefits, the PPF scheme is a good investment avenue. SBI is one of the leading banks in India where investors can open a PPF account. In order to find out how much returns one will earn when investing in the PPF scheme, learn how to use the SBI PPF calculator. This calculator is an online tool that is easy to use and free of charge. There are 4 PPF calculation modes, using which the investors can find out how much returns they will get over a period of 15 years for specific contributions.

  • Fixed monthly amount: This mode can be used to calculate how much an investor will earn if monthly investments are made for a period of 15 years.
  • Fixed yearly amount: This mode can be used to estimate the returns an investor will get if yearly deposits are made over the period of 15 years.
  • Variable monthly amount: This mode is useful for those who make monthly deposits of varying degrees. The maturity amount of the PPF account can be obtained by calculating the detailed monthly investments.
  • Variable yearly amount: If an investor makes yearly deposits of varying sums, then this mode will come in handy for calculating the maturity amount.

Based on the results, investors can choose to make partial withdrawals. Another benefit of using the PPF calculator is that investors can find out the maturity date of the account by selecting the investment starting year in the tool. In case an investor chooses to extend the PPF account after the completion of the 15-year lock-in period, he or she will have to select the maturity duration accordingly on the calculator. For example, if the account duration is extended by a block of 5 years, then the maturity duration will have to be submitted as 20 years in the calculator to get the accurate result.

Here is a step-by-step guide on how to use the SBI PPF calculator:

  • Step 1: Choose the PPF calculation mode.
  • Step 2: Select the investment starting year from the drop-down box. The starting month will always be April of any given financial year.
  • Step 3: Select the maturity duration from the drop-down box (15, 20, 25, or 30 years).
  • Step 4: Enter the yearly or monthly deposit amount in the box provided on the tool.
  • Step 5: Click on the 'Calculate' button to get the result.

The result will consist of the maturity amount, total interest, and total investment. There will also be a breakdown of the duration, opening balance, deposit amounts, interest earned, and closing balance of the PPF account, represented in the form of a table.

How to deposit money in your SBI PPF Account

In order to deposit money in your SBI PPF account, there are two ways that you may take. One if to do the transfer online and another is to visit any SBI bank branch and make the deposit.

  • Online deposit of cash

SBI allows customers to deposit cash in their PPF accounts via online banking. You just need to login to your SBI online banking account and make a fund transfer similar to how you do for any other bank. You are required to enter your PPF number as the account number to which cash transfer needs to be made. The payee name should be exactly the same as that mentioned in the PPF account.

  • Offline deposit of cash

    Deposit to your SBI PPF account can be made offline too, by visiting any of the SBI bank branches. The offline fund transfer can be made either by filling in a pay-slip at the bank or by depositing an account payee cheque. However, the latter requires some extra time for the cheque to get cleared and for the deposit to show up in the PPF account.

How to transfer your PPF Account from Post Office to SBI

PPF Account Transfer from post office to SBI and vice versa is not a difficult process. The customer just needs to raise a request with either the bank or post office and the transfer is processed. You will need to submit a transfer request form along with form SB-10b to the post office in case you wish to get your PPF account transferred to SBI. An identity proof is also required to be submitted to the postmaster. Your transfer request will then be reviewed by the postmaster who will send original PPF account documents like certified copy of account, account opening application form, specimen signature, nomination form etc. to the SBI branch where you wish to open your PPF account. A cheque or demand draft of your PPF amount will also be sent to the SBI bank branch.

Once these documents are received by SBI, the bank will ask you to submit a fresh PPF account opening form along with certain KYC documents. The bank will then review your documents and open your PPF account. The new passbook issued by SBI will not have any of your old PPF transaction details at the post office and will only have details of the PPF transactions carried out at SBI.

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News about SBI PPFAccount

  • Interest Rates: Hike for SBI FDs; Small Savings Schemes Unchanged

    Earlier this month, the government announced that there would be no changes to the interest rates for small savings schemes for this quarter. However, State Bank of India (SBI) offered its customers a hike in interest rates for their Fixed Deposits.

    The Government’s decision to keep the interest rates for the April to June quarter was an attempt to try match the hardened interest rates offered by banks. Most investors were hoping for a raise in the interest rates since there has been a noticeable increase in government bond yield over the last nine months. Additionally, the interest rates on most government savings schemes were decreased by 20 bps in the last quarter.

    SBI, on the other hand, increased the interest rates on their fixed deposits by 25 bps. This move has gone contrary to the government’s expectation of banks lowering their interest rates to match those offered by the government. The hike in the interest rate means that SBI FD investors can earn interest anywhere between 6.6% to 6.75% on their investments.

    17 April 2018

  • Reduction in Interest Rates on Savings Schemes

    The Finance Ministry revealed that the rates of interest on various savings schemes have been reduced marginally. In case of Public Provident Fund, the rates have fallen down to 8% from 8.1 % in the previous period. The rate of interest on the Sukanya Samriddhi Account Scheme have been reduced to 8.5%. The interest rates on Five-Year National Savings Certificate and Five-Year Senior Citizens Savings Scheme have also been reduced. Various time deposits have also witnessed reduction in their interest rates. However the rates of interest on savings deposit have remained the same.

    6 October 2016

  • SBI Cash Deposit Limit Increased

    State Bank of India has bumped up the limits on cash deposits allowed. Customers can now use the Cash Deposit Machines to deposit up to Rs.2 lakhs. This is already in effect. Earlier, the limit was Rs.49,900 which was a significantly low amount. The Cash Deposit Machines can also be used to make payments towards PPF and loan EMIs. Customers can utilise the machines to make their contributions towards their recurring deposit accounts as well. The Cash Deposit Machines will eliminate the need to go to SBI branches and transactions can be carried out quickly on the machines.

    22 September 2016

  • CITU Appeals for Rethink of PPF and PF Decisions

    The Centre of Indian Trade Unions (CITU) has called for a reconsideration to the decisions of reducing Public Provident Fund (PPF) interest and disallowing the withdrawal of employer’s contribution from Employees Provident Fund (EPF) until the age of 58.

    CITU Tamil Nadu Secretary M. Chandran said that these moves are hitting textile workers in the state hard. “Fixing of 58 years ceiling for drawing employer’s contribution in provident fund will affect the young workers’ initiatives to start micro/small ventures,” he said. He pointed out that many young workers from other states come and work in the textile industry, and after a few years they withdraw the PF amount and return to their native places.

    The CITU also said that cut in interest rate from 8.7 percent to 8.1 percent on PPF has also affected the common man who thrives on small savings.

    12 April 2016

  • PPF and other small savings instruments see slashed rates

    The present Finance Minister in the latest budget advocated cutting down on the rates for small savings instruments. The minister justified the cut by saying that no other growing economy in the world offers such high rates of interest and that high rates were detrimental to the growth of a steady and strong economy.

    Interest rates on small savings instruments like Kisan Vikas Patra, PPF and senior citizen deposits will be slashed by up to 1.3 per cent from today onwards. The reduced rates will be in full force for the coming three months after which these will be reviewed and set again. From now on, interest rates will be set by the government quarterly and then changed if required, instead of setting these for the entire year in a go.

    5 April 2016

  • SBI report suggests higher PPF interest rate for individuals above 45

    A report by the State Bank of India has come up with the suggestion for the PPF update by the central government. The bank is of the view that instead of cutting down the rate of interest offered on PPF, the government should implement a phased approach for PPF interest rates. What the report suggests is that the rate offered to customers above the age of 45 years should be higher than those offered to people less than 45 years of age.

    Similarly, the report also suggests leaving the Sukanya Samriddhi interest rates untouched since this is a social scheme focussed towards a different socio-economic goal altogether.

    23 March 2016

  • PPF interest rate is now 8.1%

    Government announced a rate cut in Public Provident Fund from 8.7% to 8.1%. This rate is effective for the investments made during 1st April to 30thJune, 2016. The lower earnings means that the millions of households will have to shuffle their savings portfolio. The rates are going to be revised every quarter under the new system.

    22 March 2016

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