A State Bank of India (SBI) customer has the option of opening a PPF (Public Provident Fund) account conveniently anytime, anywhere, using the bank’s digital channels. SBI’s Public Provident Fund (Amendment) Scheme, 2016 was introduced by the National Savings Organization in 1968 to mobilize small savings. This scheme offers an investment avenue with decent returns coupled with income tax benefits, said SBI. Individuals in their own name as well as on behalf of a minor can open an PPF account at any branch. As per extant instructions, opening of PPF accounts in the name of Hindu undivided family is not permitted.
Here are key things to know about SBI’s PPF account:
1. A minimum of Rs. 500 subject to a maximum of Rs. 1,50,000 per annum can be deposited. The subscriber should not deposit more than Rs.1,50,000 per annum as the excess amount will neither earn any interest nor will be eligible for rebate under Income Tax Act. The amount can be deposited in lump sum or in a maximum of 12 installments per year, said SBI
2. The original duration of the scheme is 15 years. Thereafter, on application by the subscriber, it can be extended for 1 or more blocks of 5 years each.
3. The rate of interest is determined by central government on quarterly basis. At present it is 7.6 per cent per annum. Interest is calculated on the minimum balance (in PPF Account) between 5th day and end of the month and is paid on March 31 every year.
4. Loans and withdrawals are permitted depending upon the age of the account and balances as on the specified dates.
5. Income tax benefits are available under Section 88 of IT Act. Interest income is totally exempt from Income Tax. Amount outstanding to the credit is fully exempted from Wealth Tax also, stated SBI.
6. Nomination facility is available in the name of one or more persons. The shares of nominees are also defined by the subscriber.
7. The PPF account can be transferred to other branches/ other banks or Post Offices and vice versa upon request by the subscriber. The service is free of charges.
8. Premature payment is allowed only after the account or the account of the minor account holder of whom he/she is the guardian has completed five financial years, where either the amount is required for the treatment of serious ailments or life threatening diseases of the account holder, spouse or dependent children or parents, on production of supporting documents from competent medical authority; or the amount is required for higher education of the account holder or the minor account holder, on production of documents and fee bills in confirmation of admission in a recognized institute of higher education in India and abroad, stated SBI.