#FinancialBytes: How to open a PPF account
Public Provident Fund, popularly known as the PPF scheme, is a long-term savings scheme, launched by the National Savings Institute, Government of India, in 1968. The scheme is aimed at providing small-scale savings and investment prospects to its users. It offers decent annual returns, and guaranteed tax-saving benefits under Section 80C of the Income Tax Act. Here's everything you need to know.
Eligibility criteria: Who can open a PPF account?
Following are the rules for eligibility: 1) All Indian residents can open a PPF account. 2) A person is allowed to open only one PPF account. 3) Minors can also get a PPF account opened, upon furnishing a legal age-proof.
Procedure to open a PPF account
To open a PPF account in your name, head to your bank's nearest branch, and obtain a PPF account opening form. Fill up the required personal and financial information, attach necessary documents, and submit the form. The documents needed include a valid proof of identity (PAN/DL/Voter ID/Passport), and your recent passport-size photographs. You will be required to transfer a minimum specified amount to your newly opened PPF account via cheque or a pay-in slip.
Which banks offer PPF account facility?
Many major Indian banks such as SBI, ICICI, Axis, HDFC, PNB, Central Bank of India, Bank of India, among others, offer the PPF account opening facility, at their designated branches and subsidiaries.
Key things to know about the PPF scheme
PPF is a long-term investment plan. The lock-in period of the scheme is fixed at 15 years. Banks offer PPF returns at the rate of interest fixed by the Government of India. The current ROI, w.e.f. January 1, 2019, is 8% per annum. Also, interest income earned from PPF account is fully tax exempt. One can also apply for loan against their PPF account.
