The Oriental Bank of Commerce was founded on 19th February 1943 and had its headquarters in Gurgaon. The banking institution has more than 2390 branches and 2625 ATMs as of 2020. On 1st April 2020, the bank merged with Punjab National Bank.
The banking institution offers various financial services, including investment banking, commercial banking, retail banking. Other than that, it also extends financial products and savings schemes, including Oriental Bank of Commerce PPF account. The PPF account facility is one of the most popular financial products extended by the bank and is a potent means of mobilising small savings.
What is Oriental Bank of Commerce PPF Account?
The PPF Account in Oriental Bank of Commerce is an effective tax-saving instrument, backed by the Government of India. Essentially, it helps to generate a steady income and facilitates tax benefits.
The fact that PPF accounts assure steady and safe returns makes it a useful financial instrument to build a retirement corpus or an emergency fund.
Eligibility Criteria for Oriental Bank of Commerce PPF Account
In order to open a PPF account in OBC bank, individuals need to fulfil some specific requirements. Some of the most noteworthy among them include –
- Applicants must be resident Indians, preferably over the age of 18 years.
- Individuals like NRIs and HUFs are not eligible for a PPF account.
- One cannot hold a PPF account jointly.
- Minors can hold a PPF Account in Oriental Bank of Commerce if a legal guardian opens and maintains it on their behalf.
It must be noted that the banking institution allows individuals to continue to hold their PPF account in OBC bank if the account holder becomes an NRI during the term of the PPF scheme. The banking institution may also require applicants or their guardians to meet additional requirements to open a PPF account.
How to Open a PPF Account in OBC Bank?
In a broader sense, individuals have the option to open their account either by visiting the nearest branch of OBC bank or by opting for the internet banking facility.
To open an Oriental Bank of Commerce PPF account individuals need to submit –
- Form A ( can be downloaded from the bank’s website)
- Nomination Form E
- Pay-in slip
- PAN Card
- Aadhaar Card
- Identity proof
- Address proof
- Bank statement
- Recent passport-sized photographs
Nonetheless, it must be noted that such an account cannot be opened in all of Oriental Bank branches. Hence, one must make it a point to find out which nearest OBC bank branch is facilitating the same to streamline the process effectively.
Features of Oriental Bank of Commerce PPF Account
These are among the prominent features of PPF account in Oriental Bank of Commerce –
- Deposit amount and frequency
Typically, the deposit amount in a year cannot be more than Rs. 1.5 lakh. One can make a minimum deposit of Rs. 500 towards his/her deposit account. It must be noted that individuals have to pay a penalty of Rs. 50 if they default on yearly payment.
Individuals who have also opened an account on behalf of a minor can only deposit up to Rs. 1.5 lakh each year jointly for both accounts.
An Oriental Bank of Commerce PPF account comes with a maturity period of 15 years. However, account holders can extend the term for another 5 years after its maturity. To do so, account holders need to submit Form H within a year from the date of this scheme’s maturity. One must also note that the maturity period is not computed from the date of opening the account. It is calculated from the end of the same year.
- Premature withdrawal
In the event of an account holder’s demise, his/her heir may close the account as per the guidelines of the Ministry of Finance.
Individuals cannot withdraw from their PPF account prematurely until it has completed 6 years of its tenure. Nonetheless, the withdrawing amount cannot exceed 50% of the total balance.
For instance, if Ms Kaur opened an Oriental Bank of Commerce PPF account in the year 2019-2020 as per bank’s guidelines, she will be able to withdraw from her PPF account from 1st April 2025.
|Year of deposit||Deposit Amount (Rs.)||Total Balance (Rs.)|
So, as per guidelines, Oriental Bank of Commerce PPF account holders can withdraw as much as 50% of the closing balance after the completion of its 4th year, or that of the year preceding its withdrawal – whichever is lower.
In this case, Ms Kaur can withdraw Rs. 1,25,000.
- Tax benefits
Section 80C of ITA states that PPF account holders are entitled to avail tax benefits. Also, the deposits directed to the PPF account in OBC bank will be exempted from wealth tax.
- Loan facility
PPF account holders can avail credits against their deposit after 3 years of opening their account. However, the credit should be repaid either in a lump sum or in 36 EMIs.
Other than these, a PPF account can be transferred from a post office to Oriental Bank of Commerce against a small fee. Also, individuals can add a nominee to their PPF account at any given time during the tenure of the said account.
Interest Rate on PPF with Oriental Bank of Commerce
The OBC bank PPF interest rate is set as per the guidelines of the Central Government and is generally revised every quarter. The current PPF interest rate is 7.1%. Typically, the interest is compounded annually. Individuals can make use of a PPF calculator to ascertain the value they would receive on maturity. It will also help to understand how the OBC bank PPF interest rate impacts their savings and will further help to formulate a solid financial plan.
Hence, it can be said that the Oriental Bank of Commerce PPF account is a viable financial instrument to mobilise small savings and build a robust corpus. It further helps to inculcate the healthy habit of savings and allows one to mitigate financial crisis or meet long-term goals efficiently.