Punjab National Bank’s Public Provident Fund (PPF) scheme is a great method of investment which provides great return and tax benefits as per Section 80C of the Income Tax Act. A PNB PPF account is a low risk, Government of India backed, tax saver investment that is suitable for various investor groups including investors who seek guaranteed returns. One can invest from a minimum amount of Rs. 500 to a maximum of Rs. 1,50,000 in a financial year. A PNB PPF account has a lock-in period of 15 years, however, depositors can partially withdraw after the completion of the fifth year and onward.
Public Provident Fund Scheme was introduced by the Government of India in the year 1968 and it provides the depositor dual benefits of attractive return and tax benefit. All the branches of PNB allow the opening of a PPF account. Being a long-term investment, it is the best fit for the portfolio of all investors with different risk profiles.
Key Features of PNB PPF Account
- A PPF account has a lock-in period of 15 years from the account opening date
- After the completion of the 15 year period, you can extend your PNB PPF account in blocks of 5 years is allowed if a request is placed within 1 year from the maturity date
- The minimum investment required to keep a PNB Bank PPF Account active is Rs. 500 and the maximum investment allowed in the account in a year is Rs. 1.5 lakhs
- Depositors can set up online standing instructions through net banking for monthly contribution i.e max. 12 annually
Who are Eligible to Open a PPF Account Punjab National Bank?
- Any Indian citizen above 18 years of age can open an account in his/her own name and also as guardian of a minor
- PPF Account can not be opened in joint names.
- NRIs cannot open PPF account w.e.f. 25.07.2003
- HUFs cannot open a PPF account w.e.f. 13.05.2005
- However, accounts that had been opened by NRIs and HUFs prior to above-mentioned dates will continue till maturity.
- Only one account can be opened by an individual in his/her name. The second PPF Account opened will be treated as irregular account and will be closed and will not carry any interest.
Punjab National Bank PPF Account Opening Procedure
A Punjab National Bank (PNB) PPF account can be opened by visiting any of the authorized select 693 branches of Punjab National Bank spread across the nation. At present, PNB PPF Account online opening procedure is not available by the bank and the available option is the offline route. The paper-based process of Punjab National PPF account entails the following steps:
There are just 2 easy steps to open a PPF Account in Punjab National Bank
Step -1: Visit any of your nearest PNB branches and fill out Form A
Step-2: Submit the below-given documents with the duly filled form
- An ID Proof
- PAN Card
- Driving License
- Voter ID Card
- Aadhar No.
- Address Proof
- Telephone Bill
- Electricity Bill
- Ration Card
- 2 (Recent) Photographs
- Pay-In Slip (available at all authorised bank branches) to transfer the amount to your newly opened PPF Account
- Carry all the original documents to the bank as it will be used for verification purpose.
- Documents should be self-attested.
- A PPF Account passbook is issued to you once the account is opened. All PPF related transactions are updated in this passbook. The passbook is also required for claiming tax deduction under Section 80C of IT Act.
Benefits of a PNB PPF Account
A PPF account in PNB provides the depositor access to the following benefits
Loans and Withdrawals
PNB PPF scheme provides a loan facility to the depositors which start from the third financial year from the account opening date. The maximum loan that can be availed is limited to 25% of the credit amount at the end of the first financial year. Hence, any loan availed on your PPF account will be limited to 25% of the closing balance of the second preceding year.
The interest rate on this availed loan is 2% on the principal amount. Repayment of the loan can be done within a period of 36 months either in instalments or in one go. Upon repayment of the principal, the interest amount can be repaid in not more than two monthly instalments at 2% per annum interest rate. An interest rate of 6% per annum shall be charged if the repayment of the loan exceeds the period of 36 months. Partial withdrawals of the fund from the PNB PPF account are also allowed from the end of the fifth year.
Tax Benefits of a PNB PPF Account
The interest earned on the principal amount and the credit balance of the account is totally exempted from Wealth Tax under the Section 80C of the IT Act,
Premature Closure of a PNB PPF Account
PNB PPF account can be closed prematurely given that you have completed five years from the end of the account opening year.
Revival of a PNB PPF Account
A PNB PPF account which is discontinued can be revived by making a payment of Rs. 50 per year along with arrears of subscription of Rs. 500 per annum.
Nomination Facility in a PNB Account
Nomination facility is also provided by PNB on their PPF schemes.
PNB PPF Interest rate
The PPF account interest rate in PNB is 7.1% which makes it even more preferable method of investment for most people.
PNB PPF Account – FAQs
Ques. How to open a PNB PPF account?
Ans. A PPF account can be opened at all designated branches of PNB Bank.
Ques. How to avail a loan on PPF?
Ans. An account holder can avail a loan against the deposits in PPF account from the third financial year and till the end of the sixth financial year.
Ques. Is there any minimum lock-in period for PPF account?
Ans. The PPF account has a mandatory lock-in period of 15 years. However, one can start making partial withdrawals from the 5th year.
Ques. What if I miss a PPF payment?
Ans. The account will be marked as inactive in case you miss a payment. However, it can be revived by paying a small penalty of Rs 50 and make a deposit for the years you have missed paying the deposit.
Ques. Can I transfer my PNB PPF account?
Ans. Yes, a PPF account can be easily transferred at the request of the depositor from one Bank to another or one Branch to other Branch. Any existing account in any other Bank or Post Office can also be transferred to PNB and vice versa.