Save Securely and Earn Handsome Returns with Post Office PPF Account

The Post Office Public Provident Fund (PPF) account is a government-backed savings scheme offered by the Department of Post, India's largest postal network. It's an excellent option for individuals seeking a safe and long-term investment with attractive returns and tax benefits.

Eligibility for a Post Office PPF Account

To open a PPF account at your local post office, you must be an Indian resident over 18 years old. A minor can also have a PPF account opened on their behalf by their legal guardian. However, an individual cannot hold multiple PPF accounts in their own name, with the exception of one for their minor child or ward. Also, Hindu Undivided Families (HUFs) and Non-Resident Indians (NRIs) are not eligible for this scheme.

Opening a Post Office PPF Account

1. Grab the Application Form: Available at your nearest post office.
2. Fill Out the Form Carefully: Complete the application form, ensuring details are accurate and updated.
3. Gather Required Documents: Don't forget to bring the necessary documents for verification. These typically include:
• Form B (Pay-in-Slip): This slip helps with initial deposits.
• Form E (Nomination Form - Optional): Designate a beneficiary to receive the account balance in case of your passing.
• Identity Proof: An Aadhaar card, PAN card, or voter ID card will work.
• Address Proof: A utility bill, rental agreement, or bank statement can serve as proof of address.
• Two Passport-Sized Photographs: Recent passport photos are required.
• PAN Card (Optional): While not mandatory, including your PAN card can expedite the process.
4. Make Your Initial Deposit: To activate your account, you'll need to make a minimum deposit of Rs. 500 in cash or cheque.
5. Verification and Activation: Once the post office verifies your documents and approves your application, your PPF account will be operational. You'll receive a passbook containing your account details and transaction history.

Key Features

• Lock-in Period: A PPF account has a mandatory lock-in period of 15 years from the date of account opening. You can extend the tenure in blocks of five years after the initial 15 years.
• Minimum Contribution: To maintain an active account, a minimum annual contribution of Rs. 500 is required. The maximum annual contribution limit is Rs. 1.5 lakh per account holder, including any contributions made to a minor's PPF account.
• Online Deposits: These can be made via mobile banking, internet banking, or IPPB savings account.
• Loans: Account holders can take out a loan between the third and sixth year of opening the account. The loan amount is capped at 25% of the balance at the end of the second preceding year. The interest rate on the loan is the prevailing PPF interest rate plus 1% annually. The loan must be repaid within 36 monthly installments, with interest being paid in two installments after repaying the principal amount.
• Partial Withdrawals: Partial withdrawals are allowed from the beginning of the seventh year onwards. The maximum amount you can withdraw will be the lower of:
• 50% of the balance at the end of the fourth financial year preceding the withdrawal year.
• 50% of the balance at the end of the preceding financial year.
• Early Closure: Possible after 6 years with a penalty on interest.

Tax Benefits

The PPF scheme offers attractive tax benefits:

• Contributions made towards the PPF account qualify for a deduction under Section 80C of the Income Tax Act, up to a maximum of Rs. 1.5 lakh per year.
• Interests earned on the PPF account are tax-free.
• The maturity amount upon account closure is also exempt from income tax.