What is a PPF?
A Public Provident Fund, commonly known and used as PPF, is a savings-cum-tax-saving scheme introduced by the National Savings Institute of the Ministry of Finance in the year 1968, which can be opened with either a Post Office or with any nationalized bank like the State Bank of India or Punjab National Bank etc. However, today private banks like ICICI, HDFC etc have also introduced PPF schemes. Today despite having lot of investment schemes, PPF continues to be quite popular and favourite amongst many investors in India and the primary reason for the same is its reasonable returns combined with income tax benefits and the very fact that it is backed by the Central Government makes it even more attractive.
Public Provident Fund (PPF) is a 15-year scheme which can be extended indefinitely in block of 5 years and in order to get the best out of PPF, the deposit in PPF account should be done before the 5th of the month. However, most of the investors deposit a lump sum amount right at the beginning of the financial year. As per the regulations, one can have only PPF account in his or her name and in case of a minor, same can be opened by parents and a person having one PPF account in a bank cannot open another PPF account in the post office or vice-versa and if by chance two accounts exists on one person’s name, then the second account will be considered as an irregular account and no interest will be granted on it till the time both the accounts are amalgamated.
Features of PPF (Public Provident Fund):
The very essential features of PPF are as below:
- Tenure: The PPF has a minimum tenure of 15 years which can be extended in blocks of 5 years, if you want to.
- Investment Limits: If you are not very sure with the idea, you can make a minimum investment of as less as Rs 500 and extend it up to maximum of Rs 1.5 lakhs for every financial year. You can either make the payment in a lump sum amount or in 12 installments.
- Opening Balance: You can open the PPF account with amount as low as Rs 100.
- Deposit Frequency: You can make the deposits in your PPF account once in a year for duration of 15 years.
- Mode of Deposit: Deposit in PPF account can be made either by cash, cheque, demand draft or even online transfer.
- Nomination: You can assign a nominee for your account either at the time of opening the account or can do later on as well.
- Joint Accounts: There is no provision to open joint accounts and it can only be done in the name of one individual.
- Risk Factor: Guaranteed by the Central Government, PPF scheme has complete back up of the government and thus carries minimal risk.
- Who can invest in PPF: Anyone who has Indian citizenship can open PPF account with the authorized banks.
Reasons To Open A PPF Account:
There are more than one reason why PPF is quite a favorite investment option amongst Indians such as:
How To Open A PPF Account With SBI?
Like mentioned in above lines, a PPF account can be opened with any nationalized bank or a post office and there could be no better option other than SBI. The task of opening a PPF account with SBI becomes even more easy if you are a SBI customer because in this case, you can open your PPF account in few minutes without any hassle. With the SBI digital service, you just to create and log in your SBI account and create a PPF account instantly. However, in order to do so, there are certain prerequisites which you would need to open a quick PPF account online with SBI, such as:
If you want to open a PPF account with SBI online, you need to follow below mentioned steps:
However, if you do not wish to open the PPF account online, you can visit your branch with below mentioned list of documents and submit your application form:
Once your PPF account is opened with the SBI, you can make deposits in the same either online or offline and if you have opted for an online mode of payment, you can do so with the help of internet banking subsequent to linking your SBI savings/current account with your PPF account. You can make online payment to your PPF account can be made using NEFT, ECS and standing instructions whereas if you are going for an offline payment method, you can do so either by cash, cheque or draft. SBI netbanking allows you to keep a tab of your PPF balance as and when you wish to and you can do so by logging in to your internet banking and click on your PPF account number to check your balance. You can check your PPF account balance even if you do not have net banking and in order to do so, you have to get your PPF passbook updated on timely basis.