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Public Provident Fund

Public Provident Fund (PPF), 1968

Introduced by Government in 1968 as a statutory scheme and is a popular scheme among investors.

  • Availability:
  • Our all Branches are authorized to open PPF accounts.
  • An investor may contribute to his PPF account also through retail internet
    banking through lump sum or by way of standing instruction.
  • Who can open:
  • A resident Indian Individual can open PPF a/c.
  • HUF & NRI are not allowed to open PPF a/c. & no subscription is allowed even for older accounts.
  • Documents required to open:
  • PAN & Aadhaar card is compulsory.
  • Account operation:
  • Multiple accounts are not allowed either in Post Office or in Bank. Individuals can open additional account on behalf of each minor of whom he is the guardian. However, total subscriptions in all the accounts taken together including minor accounts should not exceed Rs.1,50,000/- in a financial year.
  • If two accounts are opened by the subscriber, the second account will be treated as irregular account unless the two accounts are merged into one accounts with the approval of Government.
  • Joint account cannot be opened.
  • Deposits :
  • Deposit can be made through Cash/ Clearing/ Transfer or through internet banking mode.
  • Deposits can be made in one lump sum or in 12 installments.
  • Subscription can be min. Rs.500/- & max. Rs.150000/- in F.Y.
  • If no deposit is made, then the account becomes irregular and it can be regularized by paying a sum of Rs.50/- for each year of default.
  • Interest :
  • Rate of Interest is decided on quarterly reset basis and paid annually & credited on 31st march of every year.
  • Interest in PPD a/c. is paid on the minimum balance between 5th day of the month and last day of the month.
  • Withdrawal :
  • Withdrawal (only one) during a year can be made after the expiry of 5 years from the end of the year in which initial subscription is made. The amount of withdrawal is limited to 50% of the balance to the credit at the end of the 4th year immediately preceding the year of withdrawal or at the end of the preceding year whichever is lower.
  • In the case of death of the subscriber, the amount can be repaid to his nominee or legal heir before the expiry of 15 years.
  • Premature closure:
  • Premature closure is allowed for treatment of serious ailments or life threating diseases of account holder, spouse, dependent children or parents on production of supporting documents from medical authority.
  • It is also allowed in case of requirement for higher education of account holder on production of documents & fee bills for confirmation of admission in higher education in a recognised institute.
  • Premature closure is allowed only after five financial years after the date of account opening
  • Such premature closure is subject to deduction of one percent interest from the applicable interest.
  • Maturity of account:
  • Account matures on fifteen (15) complete financial years from the end of the financial year in which account is opened.
  • Account can be extended after maturity for any number of block period of 5 years.
  • Account can be retained indefinitely without further deposit after maturity with prevailing rate of interest.
  • Extension of account can be done within one year from maturity.
  • Nomination :
  • Nomination can be done except accounts opened on behalf of minor.
  • Tax Benefits:
  • Tax benefits under section 80 (C) for the subscription made during the Financial year.
  • Interest earned is also tax free.
  • Transferability:
  • The account may be transferred anywhere in India & from Bank/ Post Office to other Bank/ Post office.
  • Loan facility:
  • Loan facility is also available from the 3rd year of opening of account but not after the end of 5th year.
  • NRI status:
  • Provided that if a resident who opened an account under this scheme, subsequently becomes a non-Resident during the currency of the maturity period, the account shall be deemed to be closed with effect from the day he becomes a non-resident and interest with effect from that date shall be paid at the rate applicable to the Post Office Saving Account up to the last day of the month preceding the month in which the account is actually closed.
    For further details please refer to Government of India Notification dated 16th May 1968, 18th June 2016 and 29th September 2017