One of the most efficient savings schemes offered by Bank of India is the PPF scheme which was introduced by the Government of India in the year 1968 and is backed by the National Savings Institute of the Ministry of Finance. The main aim of the inception PPF was to cultivate the habit of savings among the citizens to help them in creating a sufficient corpus fund that will be of great help after their retirement. The Bank of India PPF account is also often used as a tax savings tool by the public.
In this article
What is PPF?
A public provident fund (PPF) account is an investment scheme that offers income tax deduction u/s 80C for the invested amount (subject to a limit of Rs 1.5 lakh a year). Furthermore, The interest earned is exempt from tax and there is no tax on the amount received on maturity of the account either. Owing to the tax benefits offered, many people prefer to open a PPF account with their bank/post office to create a sizeable corpus.
PPF accounts have a mandatory lock-in period of 15 years. Upon maturity, the investor has the option of taking any one of the following steps:
1) Withdraw the maturity amount and close the account
2) Extend the account for a period of five years
Key Features of Bank of India PPF
Loans: A Bank of India PPF account holder can avail a loan against their PPF deposit account from the 4th to 6th year of its operation. The maximum loan that can be availed is up to 25% of the total amount at the end of the 2nd last financial year.
Premature withdrawals: BOI PPF account also allows premature withdrawal of the PPF account from the end of the fifth financial year from the date of account creation.
Tax benefits: Funds in the account and interest earned on that fund qualify for tax deductions under Section 80C of the Income Tax Act, 1961. Furthermore, deposits are also exempt from Wealth Tax.
Account deactivation and reactivation: If an account gets no deposits for a long time, it will be considered as deactivated but will not be closed. It can be revived with a minimum payment of Rs.500 and a penalty of Rs.50 for each defaulted year.
How to Open a PPF account in Bank of India?
Opening a PPF account in the Bank of India through offline method is really hassle-free and can be done by following these easy steps:
- Firstly, you need to obtain the following forms that are available on the Bank of India website, or at any of the 4,032 official branches.
- Obtain the account opening form (PPF Form A), Pay-In Slip (PPF Form B) and the Nomination Form (PPF Form E).
- Fill in these forms with all necessary details.
- Submit these forms, along with all the necessary documents to the bank.
- Once the application is received, reviewed and approved, your Bank of India PPF account will be ready to use.
How to Open PPF Account Online in Bank of India?
The online PPF account opening in Bank of India Bank is only accessible by the existing customers of the bank. The depositor will have to physically visit the branch of the bank for submitting the required KYC documents and for the verification process in order to complete the process of opening the account.
The information on the procedure to open a PPF account online is given below.
One can open a BOI PPF account online by having access to the bank’s Net Banking facility.
- The depositor has to provide the User ID and password generated from the Net Banking portal login and initiate the process of opening the PPF account.
- In the next step, click on the link available for the application of a new PPF account.
- The depositor will then have to fill in his/her basic details as well as minor’s details (if the account is opened on behalf of a minor), etc.
- The details of the branch code of the bank where the PPF account is opened is also required
- Next is the details of the nominee/(s) and these details will be verified including the address details after which the user can proceed.
- Post submitting all the details, the PPF account is created and the user will receive the PPF account number which will be displayed at the user’s Net banking portal.
- The user will have to download and print the application form and duly submit it along with the necessary KYC documents to the bank’s branch within 30 days from the date of filling the above form.
- The applicant has to pay a minimum initial amount of Rs. 500 to open the PPF account. Such amount can be paid in cash or cheque or demand draft or via online transfer as per the convenience of the applicant.
Documents Required to Open a BOI PPF Account
- Form A – Account opening form
- Form B – Pay-In slip
- Form E – Nomination form
- Depositors must carry a valid ID proof with an attached picture for verification purpose. A copy of this needs to be submitted with the original to verify. Could be a driver’s license, PAN card, passport, etc.
- A copy of the address proof needs to be submitted with an original to verify the same. One can use their telephone bill, utility bill, ownership papers, etc.
- Two recent passport-sized photographs are also required.
How to Deposit Money in your Bank of India PPF Account?
You can deposit money in your PPF account in both online and offline methods:
Online: If you have an active BOI Net Banking, you can deposit, manage and view your account online.
Offline: You will have to fill out and submit Form B, which is a deposit slip. Once you get this form, you need to fill up the following details:
- Branch name
- Name of Depositor
- PPF A/c number.
- Amount of deposit
- Denominations of currency or cheque/DD number and date
- Depositor’s signature
Once all these details are filled, submit them at the bank branch with the money.
Bank of India PPF – FAQS
Ques. Can a PPF account be closed before maturity?
Ans. Yes. But it needs to complete 5 financial years that too on the following grounds:
- Higher education of children.
- Serious illness of your spouse, children, or yourself.
Ques. Can a loan facility be availed against my PPF account?
Ans. Yes. a BOI PPF account provides loan facility from the 3rd financial year up to the 6th. The maximum loan amount that can be availed is limited to 25% of the available funds.
Ques. What is the interest provided on BOI PPF Account?
Ans. Bank of India bank PPF account interest rate is 7.1%.
Ques. How much return can I expect on PPF after 15 years?
Ans. The maturity amount received by the depositors in their PPF account after 15 years depends on the principal amount invested and the interest earned on it.