Step by Step Guide on How to Open a PPF Account

PPF accounts can be opened at designated banks and post offices across the country, with the option to invest either online or offline. The investment tenure for PPF accounts is 15 years, with the option to extend the term indefinitely in blocks of 5 years after maturity.

Why is it Important to Open a PPF Account?

Here are some of the key advantages of opening a PPF account :

• Attractive Interest Rates: PPF accounts generally offer higher interest rates than traditional savings accounts and fixed deposits. For instance, while the interest rate on a savings account might be around 3-4%, a PPF account typically provides about 7-8% interest.
• Tax Benefits: Investments in PPF accounts are eligible for deductions under Section 80C of the Income Tax Act, up to Rs.1.5 lakh per year. Furthermore, the interest earned and the maturity amount are exempt from tax.
• Long-term Savings: PPF accounts encourage long-term savings and disciplined investment, with a 15-year lock-in period.
• Security: Backed by the Indian government, PPF accounts ensure a safe and secure investment. In contrast to the stock market or mutual fund investments that are subject to market fluctuations and risks, PPF accounts guarantee returns and protection of the principal amount.
• Loan Facility: At any time after the expiry of one year from the end of the year in which the initial subscription was made but before expiry of five years from the end of the year in which the initial subscription was made, the account holder may, apply in specified Form, to the accounts office for obtaining a loan consisting of a sum of whole rupees not exceeding twenty-five per cent of the amount that stood to his credit at the end of the second year immediately preceding the year in which the loan is applied for.
• Partial Withdrawals: Any time after the expiry of five years from the end of the year in which the account was opened, the account holder may, avail ppf withdrawal by applying in specified Form, from the balance to his credit, an amount not exceeding fifty per cent of the amount that stood to his credit at the end of the fourth year immediately preceding the year of withdrawal or at the end of the preceding year, whichever is lower. Provided further that the facility of withdrawal may be availed only once a year only from the accounts which have not become discontinued.

Also Read - PPF Withdrawal Rules & Premature Closure

Step-by-Step Procedure to Open a PPF Account

How to Open PPF Account Online?

Opening a PPF account online is a convenient and hassle-free process. To open a PPF account online, follow these steps:

• The investor can log in to BOB World.
• Click on Invest Option available at the top.
• Navigate to Public Provident Fund Section- “Open Now” option.
• The investor chooses the amount they wish to invest (minimum contribution is Rs.500 per year).
• They select the frequency of deposits (monthly, quarterly or yearly).
• The investor confirms the transaction and completes the payment process.

How to Open a PPF Account Offline?

• Visit your nearest Bank of Baroda branch.
• Fill out the PPF account opening form and provide the necessary documents, including ID proof, address proof, and photographs.

Deposit the initial amount and collect the PPF passbook.

Eligibility Criteria for Investing in PPF

• Indian residents can open a PPF account.
• Non-resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not eligible to open a PPF account.
• Individuals can open only one PPF account in their name.
• Account of minor can be opened by the Parent/Legal Guardian.

List of Documents Required for Opening PPF Account

• Proof of Identity: PAN card, Aadhaar card, passport, or voter ID.
• Proof of Address: Aadhaar card, passport, utility bills, or rental agreement.
• Passport-sized photographs.
• Account opening form.
• Nominee details

How to Open PPF Account for Minor?

• Visit any nearest Bank of Baroda branch.
• Obtain a PPF account opening form and indicate that it is for a minor.
• Provide the details of the minor, such as name, date of birth, and relationship with the guardian.
• Fill in the guardian's details, including name, address, and contact information.
• Attach the necessary documents for both the minor and the guardian.
• Submit the form along with the initial deposit (the minimum deposit required is Rs.500).
• The bank will provide a passbook for the minor's PPF account, which will contain the account number, investment details, and other relevant information.

What are the Documents Required to Open a PPF Account for Minor?

• Proof of Identity for the guardian: PAN card, Aadhaar card, passport, or voter ID.
• Proof of Address for the guardian: Aadhaar card, passport, utility bills, or rental agreement.
• Proof of Identity for the minor: Birth certificate, Aadhaar card, or school ID.
• Passport-sized photographs of both the minor and the guardian.
• Account opening form, filled in with the minor's and guardian's details.

Also Read - How to Transfer Your Existing PPF Account to Bank of Baroda?

Frequently Asked Questions on How to Open PPF Account

Q. How to check the public provident fund account balance online?

• Log in to bank's BOB WORLD app.
• Navigate to view ALL ACCOUNTS and then INVEST option.
• Click on the ppf option to view account balance and transaction history.

Q. Is it compulsory to deposit in PPF every year?

Yes, it is compulsory to deposit a minimum of Rs.500 every year to maintain the active status of PPF account, else penalty of Rs.50/- is levied for each year of default.z

Q. What happens if I don't pay PPF for 1 year?

If you fail to deposit the minimum contribution of Rs.500 in a financial year, the PPF account will become inactive. To reactivate the account, you need to pay the missed deposit along with a penalty of Rs.50 for each missed year.

Q. Can I open a PPF account for my child?

Yes, you can open a PPF account for your child (minor). However, the combined investment limit for your account and your child's account cannot exceed Rs.1.5 lakhs per financial year.