Public Provident Fund, popularly known as PPF, was introduced by the National Savings Institute of Finance in 1968 in order to encourage small savings through an investment option that offered greater returns in addition to the income tax benefits. Any individual with an Indian citizenship is eligible to start a PPF account at any major banks in India with a termly deposit ranging from a minimum deposit of Rs. 500 to a maximum deposit of Rs. 1.5 lakhs in any given financial year.
One of the ideal banks in India for PPF account is the State Bank of India. Considering the internet age, SBI offers a very easy online process to start a PPF account. It is also recommended that if you also have a savings account with the bank or open a new account, then you could take advantage of the online banking facility in order to manage your PPF account as banks don’t provide an online banking feature for standalone PPF accounts.
Benefits of PPF Account in SBI:
The basic idea of registering a PPF account is to initiate small savings from your income for the future and thereby enjoy the income tax benefits. Besides that, there are many other benefits of opening a PPF account at SBI as follows:
Great Interest Rates: Compared to a normal savings account at any bank, a PPF account in SBI offers an interest rate of 8.70% per annum. The interest is paid on 31st March every year, whereas the interest is calculated on the minimum balance between 5th day and end of the month.
Loan Against PPF Account: Individuals with PPF account can also avail loans against their account depending on the age of the account and balances on the specific date of application.
Tax Benefits: One of the great benefits and the reason for opening a PPF account is the income tax benefits. Under Sec 88 of the IT Act, income from PPF interest is completely exempt from any Income tax. Also, the amount outstanding to the credit is fully exempted from Wealth Tax as well.
Online control: You can control PPF account online. You can check PPF account balance and history online through net banking.
Features of PPF Account in SBI:
Apart from the benefits, you must also learn about the conditions of the PPF account at SBI:
Eligibility Criteria – Any Indian citizen is liable to open a PPF account under their own name or on behalf of a minor at any SBI Branch. Opening PPF accounts in the name of Hindu Undivided Family is not allowed.
Investment Limitations – Since August 2014, the termly deposits are limited to a minimum of Rs. 500 to a maximum of Rs. 1.50 lakhs per annum. You can deposit the amount as a lump sum or in multiple installments in a year. The installments shouldn’t exceed more than 12 per year.
Duration – The original duration of maintaining a PPF account is 15 years. After 15 years, the account holder can extend the term for 1 or more blocks of 5 years each.
Nomination Feature – Like every other investment plan, PPF also allows the subscriber to assign one or more nominees.
Account Transfer – The subscriber can always choose to transfer the PPF account to other branches, banks or Post Offices at free of cost whenever they want.
Now, that you are convinced about opening a PPF account at SBI, let's look at the steps to open one.
Most of us do understand the importance of opening a PPF account as a retirement plan, but not many know where and how to open the account. Opening a PPF account at SBI is quite fast and easy. Also, they avail the online banking facility if you also have a savings account with SBI to transfer funds online that would save your time.
Step-by-Step Instructions to Open a PPF Account at SBI:
Select the Branch: First and foremost, it is important to locate the right branch to open your PPF account. Make sure to choose a branch that is not too far and offers all the basic banking facilities so you wouldn’t have to approach a higher branch to carry out other operations.
Documents Required: Irrespective of what SBI branch you choose, you must submit the following documents along with your pre-filled application form:
For Identity Proof –
Submit a photocopy of any one of the following:
- PAN Card
- Voter ID
- Driving License
- Or Any other document proof for your identity approved by the terms & conditions of the Bank
For Residence Proof –
Submit a photocopy of any one of the following:
- Telephone Bill
- Electricity Bill
- Ration Card
- Or Any other document proof of your residence approved by the terms & conditions of the Bank.
Besides the Identity and Residence Proofs, you must also submit two recent Passport size photographs along with your application. Make sure to carry the original documents of Identity and Residence proof, so the photocopies can be verified by the official.
Submit Your Application: Now you can submit your application at the SBI branch with attachments of necessary documents mentioned above. You can get the application form from any SBI branch or you can also download it from here.
Make the first deposit: After your application form is approved after verifying the necessary documents, you will be asked to fill up a pay-in slip in order to deposit the first installment or amount into your PPF account. You can also use the online facility to deposit the first installment as well which would be easy and hassle free or you can use the PPF deposit slip to add funds into your PPF account.
Within 2 days of your application, you will receive a PPF Passbook, similar to your Savings Account Passbook, to manage your PPF account balance and transfer history.