PPF accounts are usually opened by people who wish to build a retirement corpus for their post-retirement phase. There are tax benefits under the PPF scheme that make it one of the most preferable options to invest in. The deposit made up to Rs. 1.5 lakh in the PPF account can be exempted and the amount received after its maturity is also tax-free.
It must be noted that the lock-in period of the PPF account is 15 years. Partial withdrawal from the PPF account before maturity is only allowed under some terms & conditions. The scheme builds the savings habit of an individual while letting them earn interest on the principal amount. However, before investing an amount in the PPF account for a lock-in period of 15 years, it is advised to understand a few basic things about it like age limit, documentation process, forms associated with it and more.
In this blog, we will let you know the age limit, documents required and more to open a PPF account.
What is a PPF or Public Provident Fund Account?
PPF or Public Provident Fund is a scheme specially made for individuals to help them save a part of their income annually, in order to build post-retirement savings or retirement corpus. The amount deposited into the PPF scheme makes an individual eligible to receive interest on the principal amount with tax-saving benefits. PPF was introduced to encourage those individuals who don’t fall under the Employee Provident Fund Organization (EPFO) to save and build a retirement corpus. A tax benefit of up to Rs. 1.5 lakh under Section 80C of the Income Tax Act can be availed through the PPF scheme.
What are the Benefits of a PPF Account?
Following are the benefits that an individual can avail from a PPF account–
- The interest on PPF balance is compounded on a yearly basis
- PPF account offers a tax deduction of up to Rs. 1.5 lakh
- PPF lock-in period is 15 years, which makes it a good option to save a good amount of money for a longer period of time
- Loans can be availed from the PPF account
- The minimum amount to deposit in a PPF account is Rs. 500 only
- PPF tenure can be extended in the block of 5 years
- Partial withdrawal is allowed after the completion of the 6th financial year
What is the Eligibility Criteria to Open a PPF Account?
Below is the eligibility criteria to open a PPF account–
|Eligibility Criteria to Open PPF Account|
|Only Indian resident|
|An Indian citizen settled abroad can continue operating his/her PPF account|
|Parents/guardians on behalf of their minor children|
|Only one PPF account per individual can be opened|
|Hindu Undivided Families cannot open PPF account|
What is the Age Limit to Open a PPF Account?
Though there is no age limit to open a PPF account; however, in case of minors below the age of 18 years, a PPF account can be opened by adhering to the following-
- The individual should be a citizen of India
- One of the minor’s guardians can open the PPF account on behalf of a minor
- Grandparents cannot open a PPF account on behalf of their grandkids unless they are the legal guardian of the minors
- A minimum of Rs. 500 and a maximum of Rs. 1.5 lakh can be deposited to the PPF account in a financial year by the minor’s guardian
Documents Required to Open PPF Account
Following is the list of documents that are required to be submitted to open a PPF account-
|Documents to Open PPF Account|
|PPF account opening form|
Voter ID card
|Passport size photographs|
|Pay-in-slip at the bank branch to transfer the amount to the PPF account or a signed cheque|
|Birth certificate to open minor PPF account|
- To open a PPF account offline, it is required to carry self-attested and original documents
- The procedure to open a PPF account online might vary; however, the basic documentation and submission of the application remains the same
Documents Required to Open a Minor’s PPF Account
Parents/guardians of the minor are required to submit the following documents-
|Documents to be Submitted for Minor’s PPF Account|
|Details of the minor and guardian in the form|
|KYC documents of the guardian along with the photograph|
|A cheque of minimum value as an initial contribution|
|Minor’s proof of age/Aadhaar card/Birth certificate|
List of Forms associated with PPF Scheme
Following are the forms that are required to be used when opening a PPF account or to avail its related services-
|Form A||To open a PPF account|
|Form B||To make a deposit into the account or to make repayment of the loan|
|Form C||To obtain the partial withdrawal|
|Form D||To request a loan|
|Form E||To make a nominee|
|Form F||To make changes to the account details|
|Form G||To claim funds in the account either by a legal heir or a nominee|
|Form H||To extend the tenure of the account|
How to Open a PPF Account Online?
To open a PPF account online, it is mandatory that the contributor has an account with the bank and access to internet banking. Following are the steps to follow to open a PPF account that might slightly vary from one bank to another.
- Log in to the respective bank’s net banking portal
- Locate the option that will allow to open a PPF account
- There might be an option for a self PPF account and a minor PPF account. Choose one from the available options
- Enter the required details like bank details and mention the nominee details too
- Next, enter the amount to deposit in the PPF account
- Select whether the amount to be deducted at fixed intervals or at one go
- Enter the OTP which is sent to the registered mobile number (this step might vary from bank to bank)
- Once the above-mentioned steps are completed, the PPF account will be created. Note the account number and other required details for future references
- There are banks that require an individual to submit the physical copies of all the supporting documents and details to be submitted for KYC purpose
How to Open a PPF Account Offline?
It is easy to open a PPF account offline by following the given instructions-
- Visit the respective bank’s branch
- Connect with the banking personnel to open a PPF account
- Fill the PPF account opening form
- Submit all the required supporting documents and the amount for the PPF account
- Once the verification process is completed, the PPF account will be opened
Prerequisites to know before Opening a PPF Account
It is to be noted that the lock-in period of a PPF account is 15 years and a contributor cannot withdraw the complete amount before maturity; thus, it is wise to take care of the following things before opening a PPF account–
- It is mandatory for the individual to have a savings account with the respective bank to open a PPF account
- Netbanking facility should be accessible and activated
- The individual should be an Indian citizen
- The minimum deposit value to open a PPF account is Rs 500 whereas the maximum value is Rs 1.5 lakh
- NRIs cannot open a PPF account, however, individual who already had a PPF account before shifting to another country can still operate his/her PPF account
- It is compulsory to link Aadhaar card with the bank account
- Mobile number should be linked with the Aadhaar card to receive OTP and other important details
- Hindu Undivided Families cannot open a PPF account
- An individual who would want to open a PPF account should have only one account under his/her name
- Individuals can open a PPF account on behalf of their minor
- Parents /guardians can close their minor’s PPF account under certain circumstances