Know your PPF account opening procedure in five easy steps

The PPF also acts as effective tax savings instrument. It provides tax benefits up to a contribution of Rs1.5 lakhs annually under Section 80 C of the Income Tax Act of India.

Aug 08, 2019 03:08 IST India Infoline News Service

The Public Provident Fund or PPF as it is popularly known, is one of the best known Government backed long term savings scheme in India. The major reason for its popularity is guaranteed returns on maturity. Further, the PPF enjoys EEE status,  i.e. investment, accumulation and finally interest income is exempt from taxes. However, the interest rate on the PPF along with other small savings scheme is reviewed on a quarterly basis. Currently, the rate of interest on the PPF is 8%.

The PPF also acts as effective tax savings instrument. It provides tax benefits up to a contribution of Rs 1.5 lakhs annually under Section 80 C of the Income Tax Act of India. The duration of the PPF scheme is 15 years but partial withdrawal and loan facilities are available on it after a stipulated period. If you are keen to invest in the PPF account online, to enhance your long term savings, here is all the information you need on how to open PPF account.

Eligibility to open a PPF account:
  • You can open one PPF account if you are a resident of India.
  • You can also open a PPF account on behalf of a minor.
  • If you are an NRI now, but had opened a PPF account when you were a resident of India, you can continue to make contributions till the end of the tenure (15 years).
  • Unlike Indian residents though, you cannot extend the account post 15 years.
Mandatory requirements to open a PPF account:
  • You need to have a savings account in a one of the banks offering PPF facility.
  • Net banking should be activated in this account.
  • Your savings account must be linked to your Aadhar card.
  • Your mobile number should also be linked to Aadhar.
A five-step procedure to open a PPF account
  • Step one: Log on to your net banking portal and navigate to the PPF account opening option. Some banks give you the choice to open a self-account or an account on behalf of a minor. Choose the option relevant to you.
  • Step two: Fill in the personal details such as bank details, PAN number, nominee details, etc. Double check whether you have keyed in all the information correctly.
  • Step three: Now, enter the amount you wish to deposit in the PPF account. You can give standing instructions to debit a stipulated amount in a lump sum or in intervals from your savings account.
  • Step four: Carry out the authentication process, most likely through a onetime password shared on your mobile phone. Your PPF account is now created. You can make a note of the PPF account number for reference.
  • Step five: Some banks may require you to submit hard copies of your personal details along with the PPF account number as a part of the Know Your Customer (KYC) process.
A PPF account is fairly easy to open online, you can consider opening one as it has several advantages like mentioned below
  • You are entitled to a fixed return each year.
  • It enjoys maximum tax benefits (EEE).
  • It provides a wide range of investment flexibility.
  • This means you can invest anything between Rs500 to Rs1.5 lakhs annually.
  • It provides the facility of investing in a lump sum or in instalments.
  • It is a smart savings tool and can increase your retirement savings.

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