Public Provident Fund (PPF) scheme is one of the most efficient long term investment option backed by Government of India which offers safety with attractive interest rate and also, the returns that are fully exempted from Tax. IDBI Bank is one of the authorized banks by the Government of India to accept subscriptions for an IDBI PPF account through all its branches spread across the nation. Investors can get facilities such as loan, withdrawal and extension of their PPF account.
In this article
What is PPF?
PPF or Public Provident Fund is a long term savings scheme and the lock-in period for the same is 15 years. This investment scheme is supported by the Government of India as per the PPF Act, 1968. The minimum investment amount starts from as low as Rs. 500 and the maximum is Rs. 1.5 Lakhs in a financial year. The investment made IDBI PPF account is fully exempted from income tax liabilities. i.e if you are a PPF account holder, then the amount deposited during a year will be claimed under section 80C deductions. If someone is looking for a safe investment option to save taxes and earn guaranteed returns, a PPF account will be the best fit.
Benefits and Features of IDBI Bank PPF account
- Investment in PPF is highly beneficial for those who do not have an EPF account (either mandatory or voluntary) as it enables them to enjoy similar features and benefits of a provident fund.
- One can open a PPF account for the initial mandatory tenure of 15 years. However, an extension of such an account is allowed based on the account holder’s discretion for one or more blocks of 5 years each.
- The minimum deposit to be made each year is Rs. 500 and the maximum deposit that can be made each year is Rs. 1,50,000.
- Any contribution made beyond the limit of Rs. 1,50,000 in a particular year is not eligible for any interest or tax benefits.
- The currentIDBI PPF interest rate is 7.1% per annum
- Interest on PPF account is computed on the minimum balance available in the investor’s PPF account between the 5th and the last day of the month.
- The interest is paid on the 31st March of every year
- The interest earned on PPF is eligible for tax exemption and the investment in PPF is also eligible for Tax deduction under section 80C of the Income Tax Act, 1961 up to Rs. 1,50,000.
- The scheme also provides a nomination facility under the PPF scheme by submitting a Form E in this regard.
- A depositor can nominate one or more persons (maximum 4) under the PPF scheme offered by the bank.
- The depositor also can define the shares of each of the nominees as well as change the nomination or percentage of share via Form F.
- Loan facility is also provided by IDBI Bank against a PPF account.
- IDBI PPF account can also be transferred from one branch to any of the other branches of the bank or any other bank or post offices across the country and vice-versa.
- A written request is required for the same.
- Depositors are also allowed to hold the PPF account post its maturity without any contribution.
- Such an account will not be treated as an inactive account and will also earn interest at the prevailing rates.
How to Open PPF Account Online in IDBI Bank?
IDBI Bank provides the facility of online PPF account opening. You can easily open an IDBI PPF account online by using your internet banking facility. You need to follow the below-mentioned steps to open your online PPF account:
- First, log in to your IDBI internet banking account with your credentials
- Fill the online PPF application form.
- Take a print out of the filled application form and submit it at your nearest IDBI branch
Once you submit the payment and hard copy of your online application form, the bank will verify your details and verification it will activate your PPF account.
Documents Required to Open an IDBI Bank PPF Account
The documents needed to open a PPF account with IDBI Bank are:
- Printout of Form A or account opening form which is available online has to be duly filled/ signed
- Self-attested copies of address proof of the individual as per Know Your Customer (KYC) norms (Passport, Aadhaar Card, Electricity Bill etc.)
- Self-attested copies of identity proof such as Aadhaar Card/PAN Card/Driving License/Voter ID/etc.
- Nomination Form E
- Passport Size Photographs
Eligibility to Open an IDBI PPF Account
The details of the eligibility to open a PPF account is mentioned below:
- PAN Card is a mandatory document for opening a PPF account.
- Indian citizens above 18 years of age can invest on behalf of minors or persons of unsound mind.
- Such investment can be done by the parents or guardians
- Parents can invest in only one PPF account for one minor child.
- In the case of a PPF account in the name of a minor, the investment of a minor account will be clubbed with the investment of such parents in order to determine the maximum limit of investment by the parent.
- Joint accounts are not permitted under the PPF scheme.
- HUFs and NRIs are not allowed to open a PPF account.
How to Deposit Money in your IDBI PPF Account:
Deposits can be made into your PPF amount in lump sums or in a maximum of 12 instalments in a financial year. Both online and offline methods can be used to deposit money in your PPF account.
Online method: You need to log in to your internet banking and transfer the amount to IDBI Bank. You need to fill up certain details like your name and PPF account number.
Offline method: In the offline methods, you need to visit your concerned branch and deposit it via a cheque or a deposit slip available at the bank.
IDBI Bank PPF Account – FAQs
Ques. Who can apply under the PPF scheme?
Ans. An individual can open a PPF account on his / her own behalf and/or on behalf of a minor (in case of parents or guardians)
Ques. How many subscriptions are permitted in a financial year?
Ans. The subscription into an account can be made in a single lump sum or in installments not exceeding twelve in a financial year.
Ques. When is an account treated as inactive?
Ans. Where subscribers having subscribed ` 500/- or more in the initial year fail to deposit the minimum amount in the following years, the account will be treated as discontinued.
Ques. Can I open 2 PPF accounts?
Ans. No. If you are having a PPF account in a bank, you cannot open another account in other banks/ post offices and vice-versa. If two accounts are opened by the depositor in the same name by mistake, the second account will be considered as an irregular account and will not carry any interest unless the two accounts are clubbed.
Ques. What is the IDBI Bank PPF account interest rate?
Ans. IDBI Bank PPF interest is 7.1%.