As of March ’17, Vijaya Bank had more than 2000 branches all across India. It is a public sector banking institution headquartered in Bangalore. On 1st April 2019, it was merged under Bank of Baroda along with Dena Bank. This financial institution provides several banking services to customers, which include savings instruments like Vijaya Bank PPF account.
Vijaya Bank is one of the financial institutions in India authorised to host the Public Provident Fund scheme. It’s a Central Government-sponsored savings device, where people can invest their excess funds to meet long-term goals like retirement planning, buying a house, car, etc. This scheme also provides attractive tax benefits to depositors, making for a wholesome savings instrument.
According to the PPF Act, 2019 stipulations, only the following persons can open a PPF account in Vijaya Bank –
The following persons are ineligible for the Public Provident Fund –
Individuals cannot open an account on behalf of these persons either. Also, a person can only have one account in their name, be it a major or a minor.
Aspirants can open an account in this financial institution per the following steps –
Step 1 – Visit the official website of Vijaya Bank and download the PPF application form.
Step 2 – Furnish it with appropriate details as shown in ID and address proof.
Step 3 – Submit the form along with other crucial documents to a such executives at the nearest Vijaya Bank branch.
Step 4 – Provide a cheque of minimum of Rs. 100 or pay in cash at the bank.
Upon verification of those documents, the concerned authority will initiate PPF account opening in Vijaya Bank. Note that, one can acquire such application form from the branch itself as well.
The documents a person will require to provide are –
Individuals should carry original and photocopies of each document when applying for Vijaya Bank PPF account.
Note that, it’s possible to nominate more than one person, and also define each person’s share henceforth.
The Public Provident Fund comes with a tenure of 15 years. An accountholder can choose to extend this period by a block of 5 years with no limit on how many times it can be prolonged. However, it’s not possible to terminate a PPF account before those 15 years are over, other than provisional exceptions.
A subscriber must invest at least Rs. 500 per annum in their PPF accounts in Vijaya Bank. However, one cannot deposit more than Rs. 1.5 lakh a year. The maximum limit for contribution also applies to combined deposits in self’s account and minor’s Vijaya Bank PPF account.
During the extended period, contributions are not a mandate. However, if a person does not deposit any sum for more than a year, he/she is prohibited from contributing any further during such period.
As mentioned above, there are provisions in the PPF Act, 2019, allow individuals to foreclose their accounts before the completion of 15 years. These provisions allow for premature closure of accounts only under the following circumstances –
Individuals can foreclose an account only after 5 years from the date of account opening with Vijaya Bank. However, it entails a 1% reduction in the PPF account interest rate in Vijaya Bank, which shall be reflected in the amount disbursed on foreclosure.
As per the guidelines, accountholders can start making partial withdrawals from their PPF account in Vijaya Bank from the 7th year. However, such a limit is subject to the lower of –
The following table shows the hypothetical deposits of Ms Gunjan in the Vijaya Bank PPF account from FY14 – FY20.
| FY | Opening balance (Rs.) | Investments (Rs.) | Closing balance (Rs.) |
| 14 | 0 | 30,000 | 30,000 |
| 15 | 30,000 | 50,000 | 80,000 |
| 16 | 80,000 | 20,000 | 100,000 |
| 17 | 100,000 | 50,000 | 150,000 |
| 18 | 150,000 | 80,000 | 230,000 |
| 19 | 230,000 | 70,000 | 300,000 |
| 20 | 300,000 | 50,000 | 350,000 |
Note – This illustration does not feature interest earnings to keep it simple.
In this case, Ms Gunjan can withdraw 50% of Rs. 150,000 (closing balance at the end of the 4th year preceding FY20) since that is the lower amount.
Individuals can choose to borrow a loan against their PPF balance in Vijaya Bank between the 3rd and 6th financial year. The limit for such a loan is 25% of the closing balance as of the end of the FY that precedes such a year.
For instance, if a person applies for a loan in the 3rd year, he/she can avail of 25% of the 1st year’s closing balance. In the 4th year, it’s 25% of the 2nd year’s closing balance, so on and so forth. The quantum attracts a charge of 1% plus Vijaya Bank PPF interest rate since there’s no interest-earning until such loan is repaid.
A borrower needs to repay this loan within 36 months, with interest to be paid in 2 EMIs after payment of principal in full.
The contributions made toward Vijaya Bank PPF account online are exempt from tax up to Rs. 1.5 lakh under Section 80C. Income tax provisions also provide for the complete exemption of interest earned and withdrawals from a PPF account.
Vijaya Bank calculates interest as per the prevailing rate. The Government of India revises this rate quarterly. The interest is calculated every month based on the lower of the two –
At the end of each year, total interest earned is added to the standing balance. Thus, interest is compounded annually, ensuring more substantial returns.
The Vijaya Bank PPF account is an excellent investment device for individuals looking to dilute their risk exposure or seek risk-free returns. With the power of compounding and tax benefits, it also provides hefty benefits to individuals.
Note: Vijaya Bank is merged with Bank of Baroda.
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