As the world surges toward increasingly tight-knit financial systems that are interdependent on one another, the process of keeping track of one’s investments and finances allocated for the future can become exhausting. Sophisticated banking systems, unending paperwork, varying interest rates, taxable payouts and inaccessible premiums can become intimidating for those looking for a simple way to start growing their finances.
Being met with so many preliminary steps and requisites can often cause people to shy away from accessing the benefits of secure investment plans. Therefore, easing the fear of those who might find these processes cumbersome; the Post Office PPF becomes the ideal solution. Going for a Post Office PPF is one of the best ways to build a steady financial corpus with guaranteed returns. So if you are on the lookout for a reliable, assured and low maintenance investment solution, the Post Office PPF is the way to go.
- The objective of a Post Office PPF is to help you maintain a corpus of money for your future, with the benefits of it being a government-backed scheme.
- It is important to keep in mind that compared to conventional investment schemes with private or public banks, a post office ppf is more accessible for those who live in remote areas or have limited finances.
- Apart from steady interest rates and tax-free maturity and interest amounts, the post office PPF also allows loan benefits.
What is a Post Office PPF?
The Post Office PPF stands for a public provident fund that is supported and managed by the Government of India through the extension of India Post Offices. It is a monetary savings scheme that runs on steady interest rates which offer guaranteed returns over the investment period. Since they can be opened in India Post offices across the country, they are accessible to most of the population due to their community welfare-oriented interest rates and deposit amounts.
The India Post Offices offer an administrative contact point for the users to be able to open a ppf account in post office. The function and operation of a post office ppf is the same as any bank account in a private or public bank. Apart from the interest rates and regulations, the documents required for a ppf account in post office are similar to conventional banks as well.
Features of a Post Office PPF Account
The workings of a post office ppf account are defined by their convenience and low deposit thresholds. People who do not have a large financial corpus to start their investment journey with can choose to start with a ppf account in post office. Let us look at some more features in detail:
- In order to maintain your ppf account in post office, you need to deposit a minimum annual investment of Rs 500 to keep your account active.
- Interest in a ppf account in post office is compounded on an annual basis. The payout from the same is received on the 31st of March each year.
- Since pots office ppf accounts focus on accessibility, the maximum deposit that is allowed for the same in a year is capped at 1.5 lakhs.
- You can only make 12 deposits in post office ppf account in the course of one year.
- The post office ppf is an EEE investment. This means that the premium/deposit amount, interest earned and maturity amount thus received are all exempted from taxation.
How to Open a Post Office PPF account?
The process of opening a public provident fund in post office is one that is made to be simple, easy to navigate and quick. It requires your physical presence at your nearest India Post Office with the documents required. The steps are as follows:
- Procure an application form for the public provident fund in post office and duly fill it out with all required details. You can also find the application form online.
- Submit the filled out form at your nearest India Post Office, along with the self-attested copies of all the KYC documents. You will need photographs and the original documents for the complete verification process.
- Along with the documents and forms, you are to submit a cheque or draft of Rs 100 as an initial amount towards opening the post office ppf account. Annually, however, you are to maintain a deposit of Rs 500 minimum to keep the account active.
- Once your ppf account in post office is operational, the post office will provide you with a passbook. This passbook is essential as it holds all the details for your post office ppf account such as account number, current balance and more. It is also important for future withdrawals or loans.
Documents Required for Post Office PPF Account
To avail the ppf scheme in post office and open your account, you are required the present the following documents:
- ID Proof: Voter ID, Aadhaar Card, Passport or Driver’s License
- Address Proof: Voter ID, Aadhaar Card, Passport or Driver’s License
- Pan Card
- Passport Size Photographs
- Nomination Form- Form E
Eligibility: Can You Open a Post Office PPF Account?
If you are an Indian resident, who is salaried/self-employed or a pensioner you can easily open a ppf scheme in post office. Minors can also have a public provident fund in post office, which can be maintained by a parent or guardian.
Here’s what you cannot do:
- Open a ppf account in post office if you are a Non Residential Indian. If you become an NRI before your ppf scheme in post office matures, you can continue operating the account till it reaches the same.
- Have more than one ppf scheme in post office, same for accounts of minors and adults.
- Post office ppf accounts do not allow joint operation.
How to Deposit Money in Post Office PPF Online
After the process for ppf account opening in post office is complete, you may want to continue making deposits to the post office ppf online. This requires you to download the India Post Payment Bank app to complete depositing the money to your ppf account online post office.
Step 1: Install the application, which is the IPBP from the respective app store
Step 2: Transfer money from your bank account to the IPBP account
Step 3: Scroll to the Department of Post services section, and choose your type of account. In this case, click on Public Provident Fund.
Step 4: Fill in the account number of your post office ppf online, along with the DOP customer ID
Step 5: Enter the amount you would like to deposit and choose Pay
Step 6: Carefully verify all details and proceed. You will be notified once the payment towards your post office ppf online is successful.
Did You Know?
Unlike most investment schemes and options offered by banks, the ppf account interest rate in post office does not change day-to-day. The ppf account interest rate is fixed at the beginning of the quarter. The current ppf account interest rate in post office applicable for Q1 FY 2022-23 is 7.1%.
Benefits of a Post Office PPF Account
An important thing to remember when looking for worthwhile investment options is to go for ones that can help you build your finances in a secure environment with guaranteed returns. A post office ppf offers all of the above with added benefits such as:
- Prospective investors are able to access EEE tax benefits through a post office ppf account on their maturity amount, deposits and interest.
- The ppf account interest rate in post office is higher than most conventional bank saving schemes.
- As post office ppf accounts operate as government-backed schemes, they guarantee assured returns and are free from market fluctuations for the long term.
- The ppf account opening in post office can be done through cheque or draft.
- You can extend the standard period of 15 years of a post office ppf account by 5 years after the initial maturity date.
- After 3 years of the post office ppf account has elapsed, one can avail loans against their account as per their necessity. One can also avail partial withdrawal every year after the 7th year of their public provident fund in post office.
- Since the minimum investment amount annually is Rs 500, people with limited funds can also avail ppf scheme in post office. It is an affordable investment scheme that makes financial security accessible to all.
While we may not know what our financial requirements may be 10 years down the line, it always helps to have a financial corpus ready.
Investing in a post office ppf account can be a great place to start your investment portfolio, or even secure a fund for your children when they grow up. Due to their sheer convenience and accessibility, a post office ppf can be a reliable companion on your journey towards a carefree future.
Word To Remember
Partial Withdrawal: A feature of post office ppf accounts, the user can start making partial withdrawals after the 7th year of the ppf account has elapsed. The user can only withdraw 50% of the ppf account balance at the end of the 4th or the preceding year of withdrawal.
Opening a post office ppf requires your physical presence at your nearest India Post Office. However, once your account is operational you can make your investment deposits towards your post office ppf online.
Managing and using a ppf account online, post office or through the IPBP app is completely secure and safe. Since it is a government-backed scheme, it is also tax free and safe from market fluctuations.
The interest rate for the post office ppf accounts for the Q1 of FY 2022-23 is 7.1%.
No, post office ppf accounts do not allow joint operation. A person is limited to having only 1 ppf account at a time.
If you have a PPF account in a post office, you can transfer it to any of the authorized banks and vice versa.
Know More: Why You Need a PPF Account