It is famously said that “The key to wealth creation lies in practice of saving regularly and systematically”.
The PPF (Public Provident Fund) is a long term investment plan offered by the Central Government for Indian residents only. The PPF investment plan falls under EEE status, wherein the investor enjoys the tax exemption on Principal, investment and withdrawal.
Investment in PPF can be done either through bank or Post Office. The bank needs to be authorised by Ministry of Finance to provide certain services in regards with Public Provident Fund. If you opt for opening the PPF account through bank then it can be done online too and to open the account in post office the post office should be double handed.
- To open PPF account in bank –
- A PPF account can be opened through designated banks such as SBI (and its subsidiaries bank), ICICI bank, Punjab National Bank, Central Bank of India, Bank of Baroda etc.
- It cannot be opened at any bank branch. It can be opened at only designated branches of the authorized banks. List of designated branch is made available on the Banks website or any branch of the Bank.
- To apply for PPF account “Form – A” needs to be filled and submitted. This form is available at the designated branch.
- Along with the form, ID proof (Pan Card, Driving License); Address Proof (Passport, Electricity Bill); two recent photographs needs to be carried.
- A pay-in slip to transfer the amount for opening of the account. A minimum of Rs500 is required to open the account.
Once the account is opened, a passbook for PPF account is issued to the account holder. All transactions would be updated in the Passbook. It is required for claiming the tax deduction under section 80C of the Income Tax Act.
- To open PPF account in bank (Online) –
- To open the PPF account online, one should have a savings bank account and subscription to net banking.
- Submit all the documents (ID proof, Address Proof, Photographs) along with Form – A at the bank.
- The payment then can be made through the linked savings bank account.
Making investment online is more convenient and easy. No passbook is given when the PPF account is opened online.
- To open PPF account at Post Office –
- The Post Office needs to be doubled handed and above, which means managed by a Post master and a clerk or more.
- At the post office, all the documents (ID proof, Address Proof, Photographs) along with correctly filled Form needs to be submitted.
- A payment of Rs500 is needs to be made to open the account, and then the post office will provide with the passbook. All the transactions would be recorded in the Passbook.
Anyone and at any age can apply for opening a PPF account. A minor too can have a PPF account which can be opened by either mother or father. One person can have only one PPF account. Joint PPF account is not permitted but one can assign a nominee in case of death of the account holder. A PPF account is among the most popular and safe way of long term investment as it backed by the government.