PPF account in post office is a very popular savings scheme. This is a good long term investment that can give you financial security even after retirement. Many people choose a public provident fund scheme due to its higher interest rate and tax-saving nature.
The post office PPF account is one of the best tax-saving instruments where the maturity amount is also tax-free. The current post office PPF interest rate of 2020 is 8% per year. You can invest for longer time period of 15 years and above. So if you are employed in the private sector and are not backed by any pension facility, then opening a PPF account is surely a wise decision. In this article, I will discuss everything about PPF account in post office like:
- Post Office PPF Interest Rate
- Where Can You Open an Account
- How to Open FD in Post Office
- Important Features
- Online Payment Rules
- Minimum and Maximum Deposit Limit
Post Office PPF Interest Rate 2020
Your PPF account in the post office will fetch you an interest rate of 8.0% per annum. The interest rates are fixed periodically. Therefore, it is advised that you check the current interest rate before opening an account.
Where Can You Open an Account?
You can open the account in any of your nearest/ preferred post office.
Documents Required for PPF Account in Post Office
The needed documents for opening an account are:
- An account opening form from your nearest post office
- Two passport size photographs
- Address and identity proof such as the Aadhaar card, passport, driving license, voter ID card, ration card, PAN card or declaration in Form 60 or 61 as per the Income Tax Act, 1961
How to Open PPF Account in Post Office?
First of all, collect all the documents mentioned above. Provide the nominee details and fill-up the form carefully. Also, carry the original identity proof along with you for verification purposes. Finally, get the signature of one witness and complete the formalities. The minimum amount for opening an account is Rs. 100/-
Post Office PPF Account Features
- Deposits can be made in lump-sum or in 12 installments.
- A joint account cannot be opened.
- The account can be opened by cash/cheque and In case of cheque, the date of realization of cheque in Govt. account shall be the date of opening of the account.
- Nomination facility is available at the time of opening and also after opening the account. The account can be transferred from one post office to another.
- The subscriber can open another account in the name of minors but subject to maximum investment limit by adding balance in all accounts.
- The maturity period is 15 years but the same can be extended within one year of maturity for a further 5 years and so on.
- Maturity value can be retained without extension and without further deposits also.
- Premature closure is not allowed before 15 years.
- Deposits qualify for deduction from income under Sec. 80C of IT Act.
- Interest from the PPF account in the post office is completely tax-free.
- Withdrawal is permissible every year from the 7th financial year from the year of opening account.
- Loan facility available from 3rd financial year.
- No attachment under court decree order.
- The PPF account can be opened in a Post Office which is Double handed and above.
Post Office PPF Tax Benefit
You can get a tax exemption on your invested amount under Section 80C. Furthermore, the maturity amount is also tax-free.
Minimum/ Maximum Deposit in Public Provident Fund through Post Office In a financial year, the deposit limits are as below:
- Minimum Deposit Rs. 500/-
- Maximum Deposit Rs. 1,50,000/-
Post Office PPF Account Form
You can download the post office PPF account opening form from here.
Post Office PPF Account Online Payment Facility
This facility is currently available for Post Office RD through Electronic Clearing Service (ECS). Also, if you have an agent, he or she can use the post office agent portal and do the online payment for you. Information on post office PPF online payment is not yet clear. However, you can ask your post office branch for exact details on this. Furthermore, you may also ask your agent for the availability of online payment mode.
FAQs on PPF Account in Post Office
Can I open the post office PPF account online?
No, this facility is not yet available. However, after opening the account you may opt for the ebanking facility of India Post.
What is the maturity value of post office MIS?
You can use the post office PPF calculator to calculate the maturity amount.
Is post office PPF premature withdrawal possible?
Premature withdrawal of PPF is allowed under certain circumstances such as a medical emergency or for higher education purposes. You can perform a partial withdrawal of up to 50% of your amount. However, this is possible after the completion of the 7th financial year from the date of opening the PPF account.
What are the new rules for post office PPF premature closure?
- PPF account premature closure is permissible under certain conditions, only if your account has completed five financial years (This rule is not applicable in case of death of the account holder.
- Account can be prematurely closed on the event of death of the account holder.
- The account can be closed in case of serious ailments or life-threatening diseases of the account holder, spouse, dependent children or parents of the account holder. Supporting documents from competent medical authority would be needed.
- In case of higher education of the account holder or minor account holder. You have to produce fee bills and documents confirming admission in a recognized institute in India or abroad.
- Please note that, in case you of premature closure of PPF account, you will get 1% less interest on the interest rate applicable on your deposits from time to time.
Hope you will find the article useful. Please feel free to share your queries and experiences, if any. Also, don’t forget to share this article with your friends who might want to open a Post Office Public Provident Fund in near future. However, if you do not wish to open a PPF account in the post office you can open an account in any of the leading banks like SBI, Axis Bank, PNB, ICICI bank, etc.