Saving for the future ranks high among the financial objectives and opting for the Public Provident Fund (PPF) proves to be a dependable choice, in realizing this goal. PPF is a government-backed long-term investment plan that ensures guaranteed returns and tax advantages. Opening a PPF account serves as a smart move to safeguard your financial future, especially concerning retirement planning. In this post, we will walk you through all there is to know about PPF, and its perks and offer a guide on opening a PPF account in India with a bank.
Understanding Features of PPF
PPF is a popular investment instrument for individuals in India. It is a government-backed scheme that allows for withdrawals after a certain period and offers the option of taking loans against the account ensuring liquidity while your investment continues to increase in value.
Here are the key features and PPF benefits:
1. Assured Returns
PPF stands out from investment options, like funds or stocks because it offers guaranteed returns, backed by the government. This feature makes it a secure choice for investors prioritizing safety over varying returns linked to market-based investments.
2. Loan Accessibility
Once your PPF account completes 3 years, you become eligible to take a loan against your PPF balance from the 4th year. This feature can be invaluable during emergencies allowing you to access funds without selling off your investments.
3. Partial Withdrawals
After maintaining your PPF account for 5 years, you gain the flexibility to make partial withdrawals from the 6th year. This feature increases the scheme’s appeal by allowing you to access funds without having to close the account.
4. Extension Opportunity
Beyond the 15 years, you have the flexibility to extend your PPF account in increments of five years. This extension option is beneficial, for investors looking to continue growing their investments without needing withdrawals. You have the option to invest any amount, between Rs. 500 and Rs. 1.5 lakh in a year. Moreover, you can decide on the frequency of deposits whether monthly, quarterly, or annually based on your convenience.
Guide to opening a PPF account
If you are interested in the benefits of PPF and wish to proceed with opening a PPF account, you can open it using your bank’s digital channels. Follow these steps for a hassle-free online process.
Through your net banking account:
1. Access Your Bank Account via Net Banking
Begin by logging into your bank account through their website. Enter your user ID and password.
2. Locate the PPF Section
After logging in, move to the “Bank Accounts” section, on the menu. Then click on “PPF Accounts.” Banks usually offer a section specifically for PPF accounts providing access to PPF-related services and the opportunity to open your account. Make sure you have your Aadhaar card details handy before you begin. Your Aadhaar card is essential for account opening as it is required for e-verification. It will also be used to link your PPF account making tracking and updates more convenient.
3. Fill the Needed Details
Next, when filling out the PPF account opening form remember to provide information such as your name, date of birth, PAN number, and Aadhaar number. The user-friendly interface of most banks assists you through each step of the form. Accuracy in filling out all details is crucial to prevent delays in the account opening process.
4. E Signature Process
After filling in all the required details you’ll be prompted to sign the form. The e-signature process involves using the number linked to your Aadhaar card. You’ll receive an OTP (One Time Password) on your phone for verification. Simply enter the OTP provided to sign the form eliminating the need for any paperwork.
Following that in order to activate your PPF account, an initial deposit of, at Rs. 500 is required. The maximum annual deposit limit is Rs. 1.5 lakh. This initial deposit will be automatically deducted from your linked savings account once your PPF account is established.
Your PPF account has been successfully created!
Using a Mobile Banking Application
You can also apply and manage a PPF account through your bank’s mobile banking application. Here are the steps to apply:
- Log in to your bank account on the mobile app, simply click on the ‘PPF’ option under the Investments
- tab.
- Under the PPF option, click on “Apply Now”.
- Tick the Declaration checkbox and start the application.
- Enter the Initial Deposit Amount to open an Instant PPF Account.
- Next, select your Savings Account as the debit account.
- Now, choose the account nominee, you can keep the same nominee as your savings account.
- Next, if you want to apply to automatically fund your PPF account with the same amount every month, select the auto debit option and click on submit.
- Now, enter your Aadhar Number and re-enter to confirm on the NSDL E-Sign website and request for OTP.
- Once E-Sign verification is successful.
- A pre-confirmation form will appear with your details filled in, click on confirm and your PPF Account is opened. You can view/download your application.
Conclusion
Opening a Public Provident Fund account with your bank’s digital platforms offers the ability to invest in your long-term future. It allows you to permit the bank to deduct a specified amount from your savings account on a basis (quarterly or annually) for your Public Provident Fund contributions. It’s a way to ensure that you maintain investments in your PPF without needing to manually make deposits. Now that you’ve learned the process of setting up a PPF account with your bank account, it’s time to embark on the journey, towards securing your future!
