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A PPF or Public Provident Fund is a savings scheme offered by the Government of India. The interest on the account is paid by the government of India and set every quarter. It is also tax-free. The applicable PPF interest rate for 1st Jan to 31st March 2019 (Q4 FY 2018-19) has been fixed at 8.0%. The interest rate for October – December 2019 was also 8%.

Importance of Opening a PPF Account

  • The principal and interest in the PPF account are guaranteed by the Government.

  • Contributions to the account up to Rs 1.5 lakh per annum are tax-free. Interest on the PPF account is also tax-free.

  • Interest Rate for the PPF account is declared by the Government every quarter and is higher than FD rates of many banks in that period.

  • The PPF account is immune from attachment from any order or decree of any court under the Government Savings Banks Act, 1873.

How to open a PPF Account

PPF accounts can be opened a post office, nationalized banks and major private banks such as ICICI and Axis. In several banks like ICICI and Axis, you can open a PPF account online through net banking as well. Once the account is opened a passbook similar to the bank passbook is issued. All transactions such as subscription, interest, withdrawals, etc. are recorded in this passbook. Some banks simply allow PPF entries to be viewed online instead of issuing a passbook.

Documents Needed

  1. PPF account opening form (Form A), the same can be obtained from specified bank branches or can be downloaded online.

  2. ID proof

  3. Address proof

  4. Photograph of the account holder

  5. Nomination form

Eligibility Criteria for PPF

Any individual who is a resident of India can open a PPF account. PPF accounts can also be opened by parents for their minor children. NRIs cannot open PPF accounts. However, a resident Indian who has become an NRI after opening a PPF account can continue the account till maturity. Opening of joint accounts and multiple accounts is not allowed.