PPF account in SBI branches is a government-regulated personal financial scheme, which offers safety with attractive interest rates and returns that are fully exempted from Tax. Investors can get facilities such as loans, withdrawal, and extension of accounts.
The State Bank of India Public Provident Fund (PPF) scheme is a good investment option that provides a great return, and it is with tax benefits. You can invest a little amount from Rs. 500 to a maximum of Rs. 1,50,000 in one financial year. SBI PPF account has 15 years locking period, however, anyone can partially withdraw from the seventh year and onward.
Currently, the prevailing rate of interest for PPF account in SBI is 7.1%.
What is an SBI PPF Account?
State Bank of India (SBI) PPF is a Government of India-backed long term small savings scheme which provides tax benefits to investors under Section 80C of the Income Tax Act 1961.
State Bank of India Public Provident Fund (PPF) scheme is an investment option, in which one can invest a little amount from Rs. 500 to a maximum of Rs. 1,50,000 in one financial year. PPF account in SBI has 15 years locking period, however, anyone can partially withdraw from the seventh year and onward.
The PPF account in the State Bank of India provides fixed returns to investors at rates that are decided by the GoI every year. The present PPF interest rate is 7.1 % per annum from 01 April 2020.
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Features of Public Provident Fund (PPF) account in SBI:
The key silent features of the SBI Public Provident Fund (PPF) account is as follows:
- The present rate of interest on the subscriptions made to the fund is 7.1 % per annum from 01 April 2020.
- The minimum deposit amount is 500/- per annum and the maximum deposit amount is Rs. 1,50,000/- per annum, either in a one-time payment or in a recurring deposit.
- The SBI PPF scheme is for the Original duration is 15 years. Thereafter, on application by the subscriber, it can be extended for 1 or more blocks of 5 years each.
- Investment amount up to Rs 1,50,000/- per annum qualifies for Income Tax Rebate under section 80C of IT Act.
- Deposits to PPF account can be made in a lump sum or in 12 installments.
- One deposit with a minimum amount of Rs 500/- is mandatory in each financial year in a PPF scheme.
- Withdrawal from the SBI PPF account is permissible from the 6th financial year.
- The loan facility is also available in the SBI PPF account from the 3rd financial year up to the 5th financial year. The rate of interest charged on a loan taken by the subscriber from a PPF account on or after 01.12.2011 shall be 2% PA. However, the rate of interest of 1% PA shall continue to be charged on the loans already taken from the SBI PPF account before 30.11.2011.
- Non-Resident Indians (NRIs) not eligible to open a PPF account in SBI or in any banks.
- An individual cannot invest in the PPF account on behalf of HUF (Hindu Undivided Family) or the Association of persons.
Eligibility Criteria to Open a PPF Account in SBI:
- Any Individual who is a resident of India is eligible to open an account under the Public Provident Fund (PPF) in SBI. A PPF account in SBI may be opened under the name of a minor candidate by his/her legal guardian. Each person is eligible for only one PPF account under his/her name.
- Any individual who either a working employee or is a pensioner or self-employed or belongs to any other category can open a PPF account in a State Bank of India.
Download the Public Provident Fund Forms used in SBI:
Download Public Provident Fund Forms used for PPF account in SBI:
FAQs about PPF account in SBI:
- What are the minimum and maximum amounts one can invest in a PPF account?
The minimum amount one can invest each year is Rs. 500 while the maximum that can be invested in a year is Rs. 1.5 Lakh.
- What is the maximum number of contributions that I can make in a year?
You can invest in your PFF account a maximum of 12 times in a year, which is not related to the months.
- Is it mandatory to invest in my PPF account every year?
Yes, you have to make a minimum investment of Rs. 500 every year. If you do not make any deposits, your account is rendered inactive. To reactive, you have to pay a penalty of Rs. 50.
- What is the tenure of a Public Provident Fund (PPF) account?
Public Provident Fund (PPF) has a tenure of 15 years. You can extend your account in blocks of 5 years after maturity.
- Can I withdraw from my PPF account prematurely?
Yes, you can withdraw up to 50% of the available amount on your account only after the completion of the 4th financial year. You can make only one withdrawal in a year.
- Can I close my PPF account before maturity?
Yes. You can close your Public Provident Fund (PPF) account only after it has completed 5 financial years for the following reasons –
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- Higher education of your children.
- Serious diseases of your spouse, children, or yourself.
Closing your PPF account prematurely will attract a penalty charge of 1% on the available amount.
- Can I avail of loans against my PPF account?
Yes, a loan against your Public Provident Fund (PPF) account is available from the 3rd financial year up to the 6th. The maximum loan amount is capped at 25% of the available funds.
- Does PPF provide income tax benefits?
Yes, PPF enables you to claim income tax benefits up to Rs. 1.5 Lakh under Section 80C.
You are here to know about the Public Provident Fund (PPF) account in SBI. You can also calculate the maturity value of PPF account in SBI.
