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PPF account online: Best way to open

Salaried Employee?? Looking for an investment plan which would also help you reduce Income Tax deduction?
Great!! You have landed on the right page. In fact, PPF is the highest preferred investment instrument by salaried employees. You can now create PPF account online.

Before knowing the “Best bank to open PPF account online”, it is essential to know “What is PPF” and the “Benefits of PPF”. I will also share my personal experience of opening PPF account online. Let’s get started.

WHAT IS PPF?

Public provident fund is a government scheme which invites citizens of India to invest for long term majorly from 15 years to 20 years (moreover, if you’re looking to extend the tenure, you can do that in blocks of 5 years.

For example, if your current PPF expires in 2020, you can choose to extend your PPF up to 2025.). PPF offers a risk free return of 8% per annum. (Interest amount is credited in your account on yearly basis). Minimum amount to Invest is RS. 500 and Maximum is RS. 150000. (Minimum and maximum restriction is ‘Per year’ based)

And if you are a salaried person, then Public Provident fund is the best investment option which will give you 8% return and also give you 100% tax benefit.

Besides the trending ads, my first ever investment was in Public provident funds (RS 500) not is Mutual funds. You may notice “Conditional apply*” clause on MF returns but there is no such thing in PPF. It is the safest and best tax benefit investment instrument in India which also helps you Improve your CIBIL score by availing Secured credit.

What are major benefits OF PPF

  • Well, you would be shocked to know that PPF is highest paying investment in zero risk investment category.
  • Importantly, PPF has EEE advantage (Exempt, Exempt and Exempt)
    • E: Contribution or Deposits are non-taxable U/s 80 C of The Income Tax Act.
    • E: Interest accrued is Tax free.
    • And E: Maturity/Withdrawal amount is non-taxable.
  • Furthermore, PPF is mentioned under Section 80C of the Income Tax Act. In terms of income tax implications
  • PPF accounts also qualify for EEE (exempt, exempt, exempt) tax category, which means you are not liable to pay tax at all three levels – investment, earning and withdrawal.

Instant Loan

  • Instant loans can be availed from all the major leading banks with your PPF investment. PPF allows this benefits from 3rd financial year of your investment.
  • Equally important, if you are in need of urgent money, you are allowed to do partial withdrawal from your PPF investment. This benefit starts from the 7th financial year of your investment.
  • Also applicant can continue your PPF investment even after the maturity date. Additional contribution is also allowed after the maturity.

Interest calculation of PPF investment.

Minimum amount maintained in the PPF account (From 5th day of a Month till end of the month) is considered as principal amount on which credit interest is calculated.

Consequently with the help of below example let’s see how Interest calculation changes if you deposit amount on or before 5th day of a month and after 5th day of a month

Let’s say your Account balance on 1st June is Rs.10000.

  • You deposit Rs.5000 to your PPF account on 5th June. The interest for the month of June will be calculated on total amount of Rs.15000 (balance as on 5th October).
  • You deposit Rs.5000 after 5th October, say on 6th June, the interest for June will be calculated on Rs.10000 which is the balance on 5th October EOD. The additional Rs.5000 shall be considered for interest calculation in the next month i.e. July.

Hence, it will be beneficial if you deposit amount in your PPF account on or before 5th day of a month to get extra accrued interest.

LIST OF BANKS OFFERING PPF

Required documents to create a Public provident fund account:

PPF account opening via Online Banking

  1. Login to the Net-banking
  2. KYC completed bank account.
  3. Submission of online PPF form. and
  4. Address proof can be any of the following:
    • Telephone bill
    • Electricity bill
    • Ration card, and
    • Aadhaar Card

PPF account opening via Bank branch or Post office.

  1. PPF Account opening form available at bank branch or Post office.
  2. Address proof can be any of the following:
    • Telephone bill
    • Electricity bill
    • Ration card, and
    • Aadhaar Card
  3. ID proof can be any of the following:
    • PAN card
    • Driving license
    • Voter ID card
    • Passport, and
    • Aadhaar Proof
  4. Two current passport size photographs
  5. Next, Deposit Slip or Pay-in-slip at Branch to fund your Public provident fund account (Minimum amount Rs. 500) or a signed cheque favoring your Public provident fund account.
  6. Finally, in case of minor applicant, a birth certificate is required as an age proof.

Please note that all documents have to be self-attested and originals have to be taken while opening the account.

Best and instant way to open PPF account online:

I have created my new online PPF account literary within 5 minutes. HDFC and AXIS bank is providing instant PPF account creation service.

And i preferred HDFC bank, so let’s see the steps in opening PPF account.

Step 1.

First Login into your HDFC net banking and browse to your left then click on “Offers” tab.

Open PPF account online_hdfc login page

Step 2.

Second select the offer names as “Experience the convenient way to Save Tax!” and fill you details.
You should note that Minimum amount for initial payin is RS. 500 and Maximum is RS. 150000.

Open PPF account online_hdfc ppf page

Step 3.

Click on the “Submit” button and you will receive the successful message and in case you already have an existing account you will see the below message.

Open PPF account online_hdfc confirmation page

Furthermore, If AADHAAR is linked to bank account already, PPF account opening form will be submitted, and you will receive a message that your account will be opened in one working day.
Online Public provident fund account opening is allowed only for customers having Linked AADHAAR card to the Bank account.

Is PPF investment worth it?

YES, and PPF is a life saver especially for employees newly crossing Taxable income slab (RS. 250000 per annum). Further it is an efficient tax saving instrument to enjoy tax free returns and to build a good corpus at maturity with no risk.

Equally important, Falling Interest rate (From 8.7% to 8.1 and then gradually to 7.6%) was a major concerns raised by potential investors in early 2016 year. Fortunately enough now PPF governing bodies has fixed the interest rate to flat 8%. Which made the PPF the highest paying investment with zero risk.

Join the discussion

  1. Jamal

    I was account in IOB bank. How do i apply online? Pls help

    • Admin

      Thanks for writing Jamal, Please note Indian Overseas Bank do not have online facility to open Public provident fund. You have to visit the nearest IOB branch with above mentioned ID and Address proof to open Public Provident funds.

      Regards,
      Admin

  2. Ashok D

    Very informative thank you very much sir

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