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PPF – Procedures

Step 1: Head over to your nearest State Bank of India branch, or a branch of any of State Bank’s subsidiaries. You can also open an account in select nationalized banks and the post office. Further, some private banks such as ICICI bank also offer you the facility to open a PPF account.

Step 2: All you got to do is:

i. fill in the form,

ii. attach a photograph,

iii. state your Permanent Account Number (PAN).

Once your formalities are completed, you will receive a pass book which will record all your PPF transactions.

No of accounts that can be open:

At any point in your life, you are allowed to have only 1 PPF account in your name.

If at any time it is seen that you have more than 1 account in your own name, the second account will be deactivated, and only your principal will be returned to you.

If you have a General Provident Fund account or an Employees Provident Fund account, you can still have a PPF account – there is no restriction.

Account in the name of minor:

You can also have an account in the name of a minor child of whom you are the parent / guardian. However, please remember that this will be the child’s account and you will simply be the guardian.

Please note that PPF accounts can’t be open in joint the name.  

Depositing into PPF account

Point 1. Invest in multiples of Rs 5 with a minimum investment of Rs 500 per annum,

Point 2. A maximum of Rs 1,50,000 per annum can be invested by one individual.

Point 3. Any amount invested above Rs 1,50,000 will not earn any interest

Point 4. Any amount invested above Rs 1,50,000 will not be eligible for deduction u/s 80C of the Income Tax Act, 1961.

Point 5. You don’t need to invest it all in one shot; .

Point 6. You can invest into your PPF the same way you would invest by way of a Systematic Investment Plan (SIP), i.e. by making up to 12 installments in a year of different amounts, but not more than 12 investments in a year.

Forget to invest one whole year

Your account is considered de-activated, i.e., your account will not be credited for any interest in such cases.

In order to re-activate your account, you need to pay a fine of Rs 50 for each year that you have not made any subscription, and also make a minimum subscription of Rs 500 for each year that you have missed. Then your account will be reactivated and you will re-start earning interest.

Manner of interest calculation

Your interest will be calculated on the minimum balance in your account between the 5th and the last day of every month. So if you were planning on investing into it monthly, make sure you invest on or before the 5th of every month (i.e. your PPF account is credited with the investment amount on or before the 5th of every month).

While investing via cheques, sometimes it might take up to 3 working days for the amount to get credited into your PPF account. So the best thing to do would be to factor this in such a way, that the lowest balance in your account includes the new investment on or before 5th of the month, otherwise you will lose out on the additional interest in the month. 


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