How to Open PPF Account in SBI

Investors who wish to make safer investments can choose to do so through the State Bank of India’s PPF online facility. There are several benefits that a PPF account provides, such as tax exemption, easy capital withdrawal, and many more. 

To open a PPF account online at SBI, you need to fill out Form A, which you can get from the official website of SBI or one of the office branches.

How to Open PPF Account in SBI Online

To know how to open a PPF account in SBI, you need to follow the below-mentioned steps:

Step 1: Visit the official SBI internet banking portal and log in.

Step 2: Click on the ‘New PPF Accounts’ option and you will be redirected to a new page.

Step 3: The redirected page will display your pre-filled data such as name, CIF number, address and Permanent Account Number (PAN)

Step 4: Fill out the bank account details and branch code for the payment of the PPF account.

Step 5: Now click on the ‘Get Branch Name’ option.

Step 6: You can see the nominee and their personal details on the screen for verification purposes.

Step 7: Once you verify the information, click the ‘Proceed’ button.

Step 8: After clicking on the ‘Proceed’ button, your PPF account will be created and your PPF account number will appear on the screen. 

Step 9: Click on the ‘Print PPF Online Application’ tab to get a hard copy of the form. 

Step 10: Carry the application form and visit the branch with the KYC document and two passport-sized photographs.

Note: The account opening process may take up to 30 days.

How to Open PPF Account in SBI Offline

Follow the below-mentioned steps to know how to open a PPF account in SBI via the offline mode:

Step 1: Visit the State Bank of India branch that has the facility to open PPF accounts.

Step 2: The PPF account opening form will be available at the bank branch, or you can download it from the SBI’s official website.

Step 3: The bank executive will ask you to fill out the SBI PPF account opening form.

Step 4: You need to attach all the required documents for KYC, such as a Permanent Account Number (PAN) card, an Aadhaar card, and a few passport-sized photographs.

Step 5: When opening your PPF account, you will have to submit an initial amount in either cheque or cash.

Eligibility Criteria for SBI PPF Account 

Consider the following criteria for setting up an SBI PPF account:

• Indian residents are eligible for a PPF account with the State Bank of India.
• Individuals with unsound minds or minors can also open an account on behalf of these individuals.
• In addition, there are a few restrictions for parents opening a PPF account on behalf of their minor children. Parents cannot open multiple accounts on behalf of the same minor. However, parents can open a PPF account for children if they have two or more children. In the event of the parent’s death, the children’s grandparents can open a PPF account for them as they are the legal parents.
• Another restriction is that an NRI cannot invest in the SBI PPF online scheme. However, if the individual has already been enrolled in the SBI PPF scheme and later becomes an NRI, the individual can hold onto their PPF till the maturity period, which is 15 years. Once the individual becomes an NRI, the individual cannot get an extension of the PPF account.

What are the Requirement Documents for the SBI PPF Online Account

Please refer to the list of required documents to enrol in the SBI PPF online:

• Account opening Form A (duly signed and filled out in print).
• Proof of address such as Aadhaar card, utility bills (Electricity and Water bills), and Passport.
• Identification proof such as an Aadhaar card, Permanent Account Number, valid driving licence, or electoral card.
• A few passport-size photographs.
• Nomination form

Benefits and Features of SBI PPF Account

There are numerous features and benefits of the SBI PPF account, which makes it one of the most preferred options. Check out the below-mentioned features and benefits of the SBI PPF account:

• The tenure of the SBI PPF account is 15 years. However, individuals can get an extended period on the account, up to five years. 
• INR 500 and INR 1,50,000 are the minimum and maximum amounts for contributions, respectively. If the investors make any contribution above the maximum limit, then they won’t be eligible to avail of the tax benefits and interest.
• The current interest rate on the SBI PPF account fixed deposit is about 7.1% annually.
• The calculation of interest is done on the basis of the minimum available balance in the PPF account in the middle of the 5th and the end of the month annually. 
• Investors can avail of multiple tax benefits, such as the interest earned on the deposit being tax-free. Tax deduction can be obtained by individuals under section 80C of the IT Act, 1961. However, to get the benefit, the amount must not exceed INR 1,50,000. 
• SBI PPF provides the facility to for nomination by the submission of Form E. Moreover, a facility for share definition is also available, which allows the investor to divide the shares of nominees. Investors can keep multiple nominees for a single account.
• The SBI PPF account acts as an asset as you can get a loan against your fixed deposit. However, age and balance play a major role in getting a loan sanctioned.
• The account has the facility to be transferred to other branches of the post offices or other banks across India. All the investor has to do is to submit a written request to the SBI, which is free of charges like transfer service charges.

Important Things to Keep in Mind Before Opening SBI PPF Account

Before you open an SBI PPF account, you need to be aware of the following key points:

Duration of Scheme: The PPF account has a maturity period of 15 years, but extension is allowed of the account up to 5 years if you fill out the form of extension.

Limit of Investment: The lower limit for making an investment is INR 500 per annum and the upper limit for making a deposit per annum is INR 1.5 lakh.

PPF Account Transfer: SBI Bank allows the individual to transfer the PPF account from branch to branch and even to the post office.

Nomination: SBI bank has a unique feature that allows you to add multiple nominees at once to the account.

Tax Benefits: The PPF comes with tax benefits as it is one of the greatest investment avenues. Individuals can claim up to INR 1.5 lakh for tax deduction under section 80C. Additionally, the interest that is earned upon the maturity of the investment is tax-free.

Withdrawal and Loans: Balance amount and age are the deciding factors for loans and withdrawals. Withdrawals can be made after the third year from the inception of the PPF account.

Interest Rate: The interest rates are announced and regulated by the Indian Government on a quarterly basis. However, the current interest rate for the SBI PPF account is about 7.1% annually.

Premature withdrawal: As we mentioned earlier, 15 years is the lock-in period, which has been made mandatory by the State Bank of India. Premature withdrawal is allowed under specific situations.

To Sum Up

The PPF deposit is one of the safest investments available in the market as the Government of India backs it up. There are multiple features and benefits of the PPF account, such as the interest earned from the PPF deposit has a tax exemption. 

In simple words, the profit is tax-free according to Section C of the Income Tax Act. One must be mindful that the government does not allow investors to have multiple PPF accounts. 

Frequently Asked Questions (FAQs)