SBI PPF Account Last Updated : 20 Sep 2019

The Public Provident Fund (PPF) scheme was launched by the National Savings Organisation in 1968 in order to help individuals make huge savings over the long run by making small contributions.

  • Interest rate of 8% p.a.
  • Duration of scheme is 15 years
  • Easy to open an account
  • Nominees can be added

About PPF scheme offered by SBI

The scheme provides a high rate of interest and comes with tax benefits. Extension of account, withdrawal, and loan facilities are available for investors who contribute towards the scheme.

State Bank of India (SBI), which is the largest bank in the country, offers the PPF scheme with a good interest rate. SBI has over 15,000 branches in India, therefore, getting access to the scheme is easy. Opening of the PPF account offered by SBI can also be done online. Therefore, opening a PPF account at SBI has become very easy.

For more information, Check out related articles PPF Calculator, PPF Rules, PPF Investment & PPF Account Post Office

Eligibility to open a PPF account with SBI

The eligibility criteria to open a PPF account at SBI are mentioned below:

  • The PPF account can be opened only by Indian citizens who live in the country and by individuals on behalf of a minor.
  • Only one account can be opened by an individual in his/her name. However, an account can be opened on behalf of a minor.
  • Only the mother or the father can open a PPF account on behalf of their minor child. However, the mother and the father can’t open an account each on behalf of the child.
  • Grandparents are not allowed to open an account on behalf of their minor grandchildren. However, in case the mother or father of the child passes away, the grandparents can open an account as guardians.
  • Hindu Undivided Families (HUFs) will not be able to open an account.

Documents required to open a PPF account with SBI

The documents required to open a PPF account at SBI is mentioned below:

  • Form A or PPF account opening form
  • Passport-size photograph
  • Any address proof of the individual as per Know Your Customer (KYC) norms
  • Nomination form
  • Copy of the Permanent Account Number (PAN) must be submitted

Interest rate offered by SBI for a PPF account

The rate of interest is determined by the government on a quarterly basis. Currently, the rate of interest is 8% p.a. The calculation of interest is on the minimum balance that is present in the account from the 5th day to the end of the month and is paid on March 31 every year.

Features of SBI PPF account

The main features of an SBI PPF account are mentioned in the table below:

Category Features
Limits of investment The minimum and maximum amounts that are allowed to be deposited in a year are Rs.500 and Rs.1.5 lakh, respectively. Individuals who deposit more than Rs.1.5 lakh are not eligible for tax rebates.
Payments towards the account PPF account Payments can be made in a lump sum or in a maximum of 12 instalments.
Withdrawals and loans Withdrawals and loans against the account are determined on how old the account is and on the balance available in the account.
Nominations One or more nominees can be added to the account. The percentage that the nominees will receive will be decided by the subscriber.
Scheme duration The original duration of the scheme is 15 years. However, subscribers can extend the duration by 1 or more blocks of 5 years each.
Tax benefits Under Section 88 of the Income Tax Act, tax benefits are available for any contributions made towards the scheme. The interest that is generated from the contributions is also exempt from tax. The amount that is outstanding to the credit is also Wealth Tax exempted.
Transfer of the PPF account The PPF account can be transferred to another post office, bank, or branch and vice versa. There are no charges for the transfer of an account.
Non-Resident Indians (NRIs) NRIs can continue to operate the account in case they opened the account when they were residing in India.

Are there any rules for premature withdrawal rules?

Only after the subscriber of the account or the minor account holder has completed five financial years of opening the account is premature withdrawal allowed. However, PPF premature withdrawal is allowed under the below-mentioned circumstances:

  • In case the account holder, parents, children, or spouse require the money for the treatment of life-threatening diseases, premature withdrawal is allowed. However, the relevant documents stating the same from a competent medical authority must be submitted.
  • In case the money is required for the higher education of the account holder or the minor account holder. However, documents such as proof of admission and fee bills from a recognised university must be submitted.

Steps to opening a PPF account with SBI

The procedure to open a PPF account with SBI is very simple and can be done online with the help of internet banking or mobile banking. According to SBI, it is the first bank to offer instant account facility for a PPF account. However, the below-mentioned prerequisites are to be followed in order to open a PPF account with SBI:

  • The individual must have a savings bank account with SBI.
  • The Aadhaar number of the individual must be linked with the savings account.
  • Net-banking or mobile banking facility must be enabled.
  • The mobile number that is linked to the PPF account must be active. An OTP will be sent to the mobile number which is required for the opening of an account.

The procedure to open a PPF account is mentioned below:

  • First, the individual must visit the SBI website (www.onlinesbi.com).
  • Next, the individual must log in to his/her account using the username and password.
  • Once the login is complete, the individual must click on ‘New PPF Account’.

Click on New PPF Account

  • On the next page, the individual’s name, address, CIF number, and PAN will be displayed.

Apply for PPF Account

  • Next, the individual must enter the bank account from which contributions are made and his/her PAN number. The details of the bank branch must also be provided. By entering the branch code, individuals will get details of the branch.

SBI Branch Locator

  • Next, your personal details must be verified. Once the details are verified, the individual must add nominee details. After checking the details, the individual must click on ‘Proceed’.

Enter PAN Number Details

Adding Nominees

  • After completion of the above step, the PPF account of the individual will be created and the PPF number will be displayed on the screen. Using internet banking, the individual will be able to view the transaction statement and the annual statement.

Completion of SBI PPF Account

  • Next, the account opening form must be taken, and the individual must submit the form at the SBI branch within 30 days from when the account was opened.

Things to Note While Opening SBI PPF Account

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.

How to Deposit Money in 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.

FAQ’s

  1. Can an individual open more than one Public Provident Fund (PPF) account under his/her name?
  2. An individual can open only one PPF account. However, the individual can open another account under his/her name for an individual below the age of 18.

  3. What documents are required to open a PPF account with State Bank of India (SBI)?
  4. Below is the list of documents required for opening a PPF account with SBI:

    • Nomination form
    • Copy of Permanent Account Number (PAN) card
    • KYC details (address proof and identification proof)
    • Passport-size photograph
    • PPF Form A (account opening form)
  5. Are there any penalties if money is not deposited?
  6. Rs.50 per year will be charged as fine if Rs.500 (minimum amount) is not deposited by the customer by the end of the year.

  7. Can a PPF account be transferred to SBI from another bank or post office?
  8. Yes, according to the government’s PPF scheme, subscribers are allowed to transfer the PPF account from a bank to a post office and vice versa.

  9. Is it possible to access the PPF account through SBI internet banking?
  10. Yes, it is possible to access the PPF account by using SBI internet banking. Subscribers will also be able to view their PPF account statement and transfer funds to the PPF account with the help of internet banking.

  11. Can subscribers avail loan facilities using their PPF investment?
  12. Subscribers can avail loan facilities against their PPF accounts between the third and sixth financial years from the date the account was started.

  13. Can non-resident Indians continue to maintain their PPF account if they had opened an account when they were Indian residents?
  14. Earlier, as per a rule made by the Ministry of Finance, the PPF account would be deemed closed from the time resident Indians became NRIs. However, as per a new government rule dated on 23 February 2018, PPF accounts can be maintained by NRIs.

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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