How To Open a PPF Account in SBI Bank
(Last Updated On: August 29, 2019)
What is Public Provident Fund?
Public Provident Fund (PPF) is a long term investment scheme which is popular amongst the masses. This scheme was introduced by the Government of India to promote savings. It offers an attractive interest rate, high returns along with several safety features. You are eligible for tax exemption under Section 80C Of The Income Tax Act. You can save a maximum of Rs. 1.5 lakhs under PPF in one financial year. Apart from tax rebate, you also get the opportunity to extend the maturity of your PPF account along with flexible withdrawals and loan facility.
Public Provident Fund is a good savings option for people in unorganized sectors and for self-employed people since EPF/GPF is not available for them.
What are the features of PPF?
- You can make partial withdrawals from your PPF account from the 7th financial year.
- You can extend your PPF account for another five years post-maturity.
- The minimum and maximum deposits allowed in one financial year are Rs. 500 and Rs. 1.5 lakhs.
- As a depositor, you are eligible for up to 12 transactions.
- You are eligible for a loan between the 3rd financial year to 6th financial year of your PPF account.
- An interest rate of 7.6% is offered on your investments which is liable for tax rebate under section 80C of the Income Tax Act.
- PPF has a maturity period of 15 years which serves as a good long term investment plan
Public Provident Fund – Eligibility
Certain conditions need to be fulfilled to be eligible to open a PPF account. Those conditions are:
- you have to be a resident of India
- Guardians can open an account on behalf of the minor
- An individual is entitled to only one PPF account
- A PPF account cannot be opened in the name of HUF
In case of a minor, his/her legal guardian can open a PPF account on their behalf. The legal guardian could be the parents or grandparents in case the parents are deceased. However, parents can’t open a PPF account on behalf of the same child.
How to open a PPF account?
You can open a PPF account by visiting any SBI branch or designated post office. If you already have an account at SBI, then you can open a PPF account in a much easier way and the process can be completed within a few minutes. If you are an SBI customer, you can open your PPF account using SBI’s online portal anytime and anywhere. You can also take the help of SBI Bank digital service that helps you to open a Public Provident Fund (PPF) account instantly. Apart from using the bank’s digital services, you can also open your PPF account by using SBI’s other features like mobile banking and mobile app.
The facilities offered by the SBI makes it very easy for customers to open a PPF account. SBI claims that it is the first bank all over India to offer such kind of instant Public Provident Fund (PPF) account facilities.
Documents required to open a PPF Account
- PPF account opening form (Form A )
- Nomination Form
- Passport size photograph
- Copy of PAN card/ form 60-61
- Identity proof
- Residence proof
*Please note that your identity proof and residence proof should be according to the bank’s policies
Opening a PPF Account Online
Mentioned below are all the prerequisites which are necessary if you want to open a PPF account online with SBI Bank:
- You should have a Savings Bank account at SBI.
- Access to mobile banking /net-banking is necessary to open an account.
- Your aadhaar should be linked to your active mobile number so that you can receive an OTP (one-time password). This pin will be used to e-sign/e-authorize the opening of your PPF account instantly.
- Your aadhaar card should be linked to your savings account. To know how to link your aadhaar card with SBI bank, read our blog on the same at Tax2win.
A step-by-step guide to Open a PPF Account
- First of all, you have to log in at SBI’s Internet Banking portal (www.onlinesbi.com).
- Once you have logged in, click on ‘New PPF Account‘ option present under the ‘Request and Enquiries’ section.
- Once, you have clicked on ‘New PPF account’, it will take you to a new window which will allow you to open a PPF account. If you are an existing SBI customer, then your PAN details will be displayed on top of the screen. Scroll down on the same window to apply for the PPF account.
- Fill in the branch code, branch name and the nominee details and click on ‘submit’. As the SBI customers, you can also apply for a new PPF account for minor using the same facility.
- Once you have submitted the form, it will generate a ‘reference number’. It is important that you note down this reference number for future communications.
- After this, click on ‘Print PPF online application’ and keep the copy with you.
- Visit the SBI branch and carry your form* and KYC documents along with your recent passport size photographs. It is advisable that you visit the bank at the earliest along with a complete set of your documents.
- Within 30 days of your visit, SBI will put your form and documents on its portal. It will be saved in the ‘user’s internet services profile’.
*Please remember that your A/c opening form will be deleted after the period of 30 days from the date of its submission. You can access your account opening form in a PDF format by clicking on ‘Print PPF Online Application‘ tab. Your account opening form will display information that you provided on the SBI portal while applying for the account. Print this form, fill the PPF amount, fix your photograph and mention all important details such as signatures. Your account opening form also includes Form E, which contains your nominee’s details that you might have mentioned while applying for the form online. SBI also provides a video tutorial explaining the entire process which might be useful for you.
The current rate of interest is 8% for PPFs. With SBI PPF, you enjoy exempt-exempt-exempt status while calculating your income tax such as interest maturity proceeds and contribution. The interest rate applicable to small savings schemes and PPF are determined every quarter from April last year. Previously, the PPF interest rates were calculated on an annual basis.
Important points to keep in mind while opening a PPF account
- Joint-account holders cannot open PPF account online.
- Any Indian resident is allowed to open one PPF account in his/her name.
- Minimum deposit of Rs 100 is required as an initial deposit amount.
- You can submit your request for nomination by visiting any SBI branch.
- To get your PPF account passbook, you need to visit the branch.
- If you want to open a PPF account for a minor, you will have to visit the bank since it can’t be done online.
- NRIs can not avail the facility of opening a PPF account
What happens to your PPF account if you become a Non-Resident Indian (NRI) from a resident Indian?
According to the laws, NRIs are not allowed to invest in the PPF account. However, if a resident adopts the status of Non-resident Indian, he/she can keep contributing towards their PPF account till maturity but on a non-repatriation basis.
Can I take a loan on my PPF account?
Yes, you can take loan between the third financial year to sixth financial year i.e. from start of third financial year up to end of fifth financial year.
How can I earn maximum returns on my PPF investments?
Maximum returns can be earned if investments are made before or on the 5th of April every year since PPF follows the financial year to compute the interest. If you plan on contributing some amount every month, make the payments before 5th of every month for maximum returns.