The Public Provident Fund program was introduced in 1968 by the National Savings Organization. The goal of this campaign was to encourage common people to make little investments and create savings. This programme is becoming a well-liked savings strategy in India.
Indeed, one of the finest methods to save for the future is through the PPF or Public Provident Fund. By making a little yearly contribution, an individual can get the principal amount and the interest after the investment matures. It is a long-term investment and savings tool that encourages and motivates an individual’s saving behavior.
Therefore, this article walks you through the ins and outs of opening a PPF account, whether online or offline. Without further ado, let’s get started!
Why there’s a need to open a PPF account?
Before we delve into how to open a PPF account online, let’s gauge why there’s a need to do the same. When you open a PPF account, you get various benefits, as elucidated below:
Interest rate
The current PPF interest rate for Q3 of FY 2022-23 is fixed at 7.10% p.a. The same interest rate was fixed for Q1 and Q2.
Investment security
As a government-backed savings programme, PPF offers its customers guaranteed returns. Furthermore, by not being market-linked, it protects investors’ financial demands. As a result, individuals who are low-risk takers yet prefer a diverse investment portfolio might consider the PPF scheme.
Tax benefits
Under Section 80C of the Income Tax Act of 1961, this plan offers tax benefits to its subscribers. As a result, you are eligible for tax deductions on your invested capital of up to Rs. 1,50,000. Additionally, the EEE taxation concept is followed by the PPF scheme. Investors can therefore benefit from tax exemption on both the maturity amount and their interest earnings.
Loan against investment
A PPF offers its investors the benefit of being able to borrow money against their investment. From the third year of your account’s activation until the sixth year, you can apply for this loan at any time.
What are the prerequisites for opening a PPF account online?
One can open a PPF account online only if their bank facilitates net banking for their customers. Apart from this, listed below are some prerequisites that need to be fulfilled before one opens a PPF account online.
Operational and active savings account at the bank.
Activated internet banking services.
The aadhaar number must be linked to the savings account.
Mobile no. registered at the bank and must be linked to the savings account.
The step-by-step process for opening a PPF account online
As mentioned above, the person must have a bank account and access to internet banking before opening an online PPF account. The step-by-step procedure for the same is given below. However, it may vary from one bank to another.
Step 1: Enter your customer ID and password to access your bank’s online banking system.
Step 2: Select the “Open a New PPF Account” option from the navigation bar.
Step 3: Select the self-account or minor account option on the next screen. Choose one of the choices, then move ahead.
Step 4: Enter the required information, including bank information, nominee information, and PAN information. To prevent entering incorrect information, carefully review all the data.
Step 5: Enter the bank name, branch name, and branch code where you want to open your PPF account.
Note: A few banks, including ICICI, allow investors to set up automatic transfers from a savings account to a PPF account at regular intervals.
Step 6: Now, enter the amount you wish to deposit into your PPF account. In one fiscal year, you are permitted to deposit up to Rs. 1.5 lakh into your PPF account. The minimum amount is Rs.500 p.a
Step 7: You will receive an OTP on your registered mobile number. To confirm the transaction, enter the same and select “Proceed.”
Step 8: Your PPF account will be opened upon the bank completes its verification procedure. You will receive a confirmation email or SMS at the registered email address or registered mobile number.
Important: Some banks, like PNB, only provide partial online PPF account openings. This implies that the PPF applicant will need to download the PDF of the PPF form filled out during online registration along with the reference number received and present the same to the bank within 7 days of submitting all the required information.
List of banks that opens a PPF account online
The table below shows the various banks that are offering an opportunity to open a PPF account online:
Essential things to note down while opening a PPF account online
Because a PPF account has a 15-year lock-in term and one cannot remove the whole balance before to maturity, it is advisable to take the following factors into account when starting one:
The individual must be an Indian citizen.
A PPF account can be opened with as little as Rs 500 and high as Rs 1.5 lakh.
NRIs are not permitted to register a PPF account, but those who already had one before moving to another country are still able to manage it.
Hindu Undivided Families are not permitted to open PPF accounts.
If someone wants to register a PPF account, they should only have one account in their name.
A PPF account can be opened by an individual for their minor children.
Documents required to open a PPF account online
While opening a PPF account online, one should keep the below-mentioned documents available and handy.
PPF account opening form (Form A) can be obtained from specified bank branches or can be downloaded online.
Address proof
Passport size photograph of the account holder
Nomination form-Form E
KYC documents like Aadhaar card, PAN card, Voter ID card etc.
How to open a PPF account for minors?
The programme also provides PPF for minors. Here are some guidelines to keep in mind while setting up a PPF account for minors or children.
PPF accounts can only be opened on behalf of a kid by either the child’s parents or a legal guardian.
A minor’s PPF account cannot be opened by grandparents if the minor’s parents are still alive.
Joint names cannot be used to open an account.
For a child, just one PPF account may be opened.
The minimum balance that must be put into a PPF account each year is Rs. 500, and the maximum balance is Rs. 1,50,000.
Moreover, the process for opening a minor account is the same as for an adult. You can choose the same option at the post office or bank branch in your vicinity. However, when you connect to your mobile banking app to open a PPF account for a minor, make sure to use the “Minor Account” option only.
How to check the PPF balance online?
To check the PPF balance online, make sure you have the access to your net- banking portal. Follow the steps below to initiate the same:
Use your internet banking customer ID and password to access your PPF account.
Your current PPF account balance will be shown on the screen after you log in.
You can obtain your account statement, submit your PPF loan application, set up standing instructions for your PPF account, and more by logging in to your account using internet banking.
Key takeaways
We hope this blog helped you understand how to open a PPF account online and other associated factors. Indeed, opening a PPF account can be a great step towards securing your and your’s family future. There can’t be a better way to get returns on your investment than opening a PPF account. So, go and open one for yourself now with the hassle-free online mode!
FAQs
No, before the lock-in period expires, you cannot remove the entire balance of your PPF account.
The majority of those who are salaried choose PPF as their preferred voluntary tax-saving investment option. The lock-in period for PPF is 15 years, making it a solid choice for people looking to make long-term investments.
One should always make deposits before the fifth of each month in order to receive the greatest PPF benefits. When a lump-sum investment is made at the beginning of the fiscal year, or before April 5th each year, higher returns can be expected.
If the student is under the age of 18, the parent or legal guardian may open a PPF account on their behalf. When the youngster reaches the age of 18, they can manage the account’s activities on their own.
The net banking services help you to get the statement for your PPF account.