Post Office PPF Account

Learn how to open a post office PPF account.
Post Office PPF Account
3 min
26-March-2024

Saving for the future is important, but finding the right investment options can be confusing. If you are an Indian resident seeking tax benefits and steady returns, the government's Public Provident Fund (PPF) scheme is worth considering. A Post Office PPF account provides a simple way to start investing your savings for the future.

What is Post Office Public Provident Fund?

The Central Government offers schemes like the Public Provident Fund (PPF) to promote saving habits among individuals. The PPF Scheme, 2019 provides guidelines for investing in your PPF account at the post office, where you can earn attractive returns and enjoy significant tax benefits.

To diversify your portfolio, you may consider fixed deposit, which offer a reliable option with competitive interest rates and flexible terms.

What are the features of post office PPF account?

1. Minimum & maximum investment

Requires a minimum annual deposit of Rs. 500 and a maximum of Rs. 1.5 lakh.

2. Tax benefits

 Offers triple tax benefit:

  • Contributions up to Rs. 1.5 lakh annually are deductible under Section 80C of Indian Income tax Act
  • Interest earned is tax-free
  • Maturity amount is tax-free

3. Partial withdrawals

Premature withdrawals are allowed from the 7th financial year onwards.

4. Loan facility

Post Office PPF account holders can take a loan between the 3rd and 6th year from the account opening. The loan amount is limited to 25% of the balance at the end of the year prior to your loan application.

5. Interest rate

The PPF interest rate is set by the government and may change every quarter. Currently, as of March 2024, the interest rate stands at 7.1% per annum.

What are the eligibility criteria for PPF Post Office?

  • Must be an Indian resident over 18 years old.
  • Guardian can open PPF account on behalf of minor
  • HUFs and NRIs cannot open PPF accounts.

How to open PPF account in Post Office?

  • Visit your nearest post office or download the PPF application form online.
  • Fill out the form and provide necessary KYC documents and a passport-sized photo.
  • Open your account with a minimum deposit of Rs. 500. Remember, the annual deposit limit is Rs. 1.5 lakh.
  • Upon submission, you will receive a PPF passbook.

How to open a PPF account online?

  1. Log in to your bank account via website or app.
  2. Choose 'Open a PPF Account' from the options.
  3. For a personal account, click 'Self Account'; for a minor, choose 'Minor Account.'
  4. Fill in the necessary details in the application form.
  5. Input the total amount you want to deposit.
  6. Submit the application and enter the OTP sent to your registered mobile number.
  7. Your PPF account is created. The account number will be displayed on screen, and a confirmation email will be sent to your registered email id.

Post Office PPF vs Bajaj Finance Fixed Deposit

Feature

Post Office PPF

Bajaj Finance FD

Interest rate

7.1% p.a. as of March 2024

Up to 8.85% p.a.

Minimum investment

Rs. 500

Rs. 15,000

Maximum investment

Rs. 1.5 lakh in a financial year

Rs. 5 crore

Maturity period

15 years

12 months to 60 months


How to close a PPF account?

You can fully withdraw funds and close your PPF account after the 15 year maturity period.

It is not possible to close your account and withdraw all your funds before maturity. However, under specific circumstances, you may be able to make a partial withdrawal of up to 50% of the balance.

How to withdraw money from your PPF account

  1. Download Form C from your bank/Post Office website or get a copy from your branch.
  2. Provide all the necessary information
  3. Submit the completed Form C to the bank or Post Office branch where you opened your PPF account.

Conclusion

The Post Office Public Provident Fund (PPF) offers a unique combination of security, tax benefits, and steady returns. If you prioritise long-term savings goals and prefer lower-risk investments, opening a PPF account can be a smart choice. It is advisable to do your own research before making any decision.

Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.