How to Open PPF Account? A Beginner’s Guide
Public Provident Fund (PPF), introduced in India in 1968, is a long-term savings scheme that allows individuals to earn attractive returns on investment while also saving on taxes. It’s a great way to secure your financial future as the returns are fully exempted from tax; contributing to its popularity among the masses. Investing in a PPF account is often considered a safe option as it is backed by the Government of India.
Whether you’re looking to save for your retirement, children’s education, or any other long-term financial goals, PPF can be an excellent option. In this comprehensive guide of approximately 1500 words, we’ll take you through the entire process of how to open PPF account, what documents you require, and other relevant information to make this process as smooth as possible for you.
- Section 1: Understanding PPF
- Section 2: Eligibility and Documentation
- Section 3: Step-by-Step Procedure of How to Open PPF Account
- Section 4: Online Account Opening
- Section 5: Things to Remember
1 Section 1: Understanding PPF
What is a PPF Account?
A Public Provident Fund (PPF) account is a government-backed savings scheme in India. It has a tenure of 15 years and offers tax benefits under Section 80C of the Income Tax Act. The interest earned and the principal invested is guaranteed by the Government, making it a very secure investment option.
Benefits of PPF
- Safety: Your investment is safe as it is backed by the Government.
- Attractive Interest Rates: Generally offers higher interest rates compared to regular savings accounts.
- Tax Savings: Deductions can be claimed under Section 80C, and the maturity amount and interest are tax-free.
- Long-term Savings: Ideal for long-term goals like retirement, children’s education, etc.
2 Section 2: Eligibility and Documentation
Who can open a PPF account?
Indian residents aged 18 years and above can open a PPF account. Parents can also open PPF accounts on behalf of minors. However, Non-Resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not eligible.
- Proof of Identity (Aadhar Card, PAN Card, Driving License, etc.)
- Proof of Address (Electricity bill, Passport, etc.)
- Passport-sized photographs
- PPF account opening form (Form A)
- Nomination form (Form E)
- Cheque for the initial deposit
3 Section 3: Step-by-Step Procedure of How to Open PPF Account
Step 1: Choose Where to Open the Account
You can open a PPF account in any nationalized bank, selected private banks, or post offices.
Step 2: Gather Your Documents
Ensure that you have all the required documents. Keep originals and photocopies handy.
Step 3: Visit the Bank or Post Office
Go to the bank or post office where you wish to open the account.
Step 4: Collect and Fill the Account Opening Form
Collect the PPF account opening form (Form A) and fill in all the required details. If you want to nominate someone, fill in the nomination form (Form E) as well.
Step 5: Attach Required Documents
Attach your proof of identity, address, and passport-sized photographs with the form.
Step 6: Make the Initial Deposit
You need to make an initial deposit. The minimum amount is INR 500, and the maximum amount you can deposit in a financial year is INR 1.5 lakhs.
Step 7: Submit the Form and Documents
Submit the filled form along with the documents and your cheque to the concerned official.
Step 8: Account Activation
Once your application is processed and the initial deposit is cleared, your account will be activated. You’ll be issued a passbook for your PPF account.
4 Section 4: Online Account Opening
If visiting a bank or post office is inconvenient, you can also open a PPF account online through banks that offer this service. Follow these steps for online account opening:
Step 1: Log in to Internet Banking
Log in to your internet banking account on the bank’s website or mobile app.
Step 2: Choose PPF Account Option
Navigate to the “Open a New Account” or similar option and choose PPF.
Step 3: Fill the Online Application
Fill in the required details in the online application form.
Step 4: Upload Documents
Upload scanned copies of the required documents.
Step 5: Make the Initial Deposit
Transfer funds online for the initial deposit.
Step 6: Submit Application
Submit the application. Once it’s processed and the initial deposit is cleared, your PPF account will be activated.
5 Section 5: Things to Remember
- The tenure of a PPF account is 15 years, but it can be extended.
- Minimum yearly deposit is INR 500 and the maximum is INR 1.5 lakhs.
- You can make deposits in a lump sum or in a maximum of 12 installments in a year.
- Loans and partial withdrawals are allowed under certain conditions.
A Public Provident Fund account is an ideal investment for anyone looking to accumulate savings in the long term while availing tax benefits. Whether you choose to open an account through a bank or post office, the process is simple and straightforward. So, arm yourself with the necessary documents and take the first step towards securing your financial future by opening a PPF account.
Also check out our blog, “How to start SIP investment? A Guide to Start SIP Journey.“