How to open a PPF account?

Know all about PPF ( Public Provident Fund ) - Eligibility, Steps & Benefits of opening a PPF account.

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The Government of India will pay the employer and employee contribution to EPF account of employees for another three months from June to August 2020. The benefit is for establishments with up to 100 employees and where 90% of those employees draw a salary of less than Rs 15,000 per month. The contribution to EPF is reduced to 10% from 12% for non-government organisations.

The Public Provident Fund ( PPF) Scheme was started by the National Savings Organization in 1968 to promote small savings and investments. The Scheme offers an investment option with decent returns together with income tax benefits under Section 80C. In this article, we'll look at the process involved in opening a PPF account.


1. Eligibility for opening a PPF account

(i) Only an Indian resident can open a PPF account.
(ii) A person can open only one PPF account.
(iii) NRIs who had opened a PPF account while they were resident Indians can operate the account until 15 years with no option for extension.
(iv) Minors can open a PPF account based on a legal age proof.
(v) HUFs cannot open PPFs after 13th May 2005. All PPF account prior to this date can be operated till the maturity period of 15 years with no extensions.  

2. Steps to open a PPF account

A PPF account can be opened in only designated bank branches of SBI and its subsidiaries, ICICI Bank, Axis Bank. Other banks where you can open a PPF account include: HDFC Bank, Central Bank of India, Bank of India (BOI), IDBI, Central Bank of India, Punjab National Bank, Indian Overseas Bank, and few others. Following are the documents required to open a PPF account :
(i) PPF Account opening form, available at the bank branch or the Indian Post portal.
(ii) ID proof that includes any of the following:
a) PAN card
b) Driving license
c) Voter ID card
d) Passport
e) Aadhaar Proof
For online applications, there are separate procedures for all the banks but the basic documentation and submission of application remains the same
(iii) Address proof, from any of the following:
a) Telephone bill
b) Electricity bill
c) Ration card
d) Aadhaar Card
(iv) Two current passport size photographs
(v) Pay-in-slip at the bank branch to transfer the amount to your PPF account, or a signed cheque in favor of your PPF account.
(vi) For a minor, a birth certificate may also be 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.  

3. Benefits of opening a PPF account

(i) Risk-free interest rate: Get an attractive interest rate of 7.1% with a scheme backed by the Central Government
(ii) Compounded interest rate: The interest rate on PPF is compounded annually. Your interest is paid on the 31st of March, every year
(iii) Tax deduction: Get deductions  of up to Rs 1.5 lakh on investments in the PPF account, under Section 80C
(iv) Good long-term investment of 15 years
(v) Loans against PPF balance: Loans can be availed between the 3rd to the 6th financial year
(vi) Low investment token: The PPF deposit amount ranges from a minimum of Rs.500 to a maximum Rs.1,50,000 in one financial year
(vii) Extension of a PPF account: A PPF account can be extended in a block period of 5 years after maturity
(viii) Withdrawal Facility: Partial withdrawal facility can be availed from the 7th financial year onwards

4. Interest rates of PPF

The following table represents the interest rate set by the Central Government in the recent past.

Financial Year

Interest rate (Per Annum)









2016 – 2017


2015 – 2016


2014 - 2015


2013 - 2014


2012 - 2013


2011 - 2012


2010 - 2011


2009 - 2010


2008 - 2009


2007 - 2008


2006 - 2007


2005 - 2006



5. PPF account for a minor

A PPF account can be opened by a parent on behalf of his/her child. Both the parents cannot open a separate PPF account for the same child. An individual can hence open one PPF account on behalf of each minor child of whom he/she is the guardian. Grandparents are not permitted to open a PPF for their grandchildren when the parents of the minor are still alive. Birth Certificate is also a document required for minors as age proof.  

6. List of all forms in a PPF account

The following table represents all the forms which are related to the PPF account.

List of Forms

Nature of the Form

Form A For opening a Public Provident Fund account
Form B For making deposits in the PPF account and repaying the loans against the PPF account
Form C For partial withdrawals from the PPF account
Form D To apply for a loan against the PPF account
Form E Adding a nominee for the PPF account
Form F Changing the nomination for the PPF account
Form G For the claiming of funds in  a PPF account by a nominee or the legal heir
Form H For extending the maturity of the PPF account (1 or 5 years)

7. Premature closure of the PPF account

Premature closure of a PPF account is allowed only after the completion of 5 years, for the purpose of medical treatment of family members, and for the higher education of only the PPF account holder. The premature closure comes with an interest rate penalty of 1%.  

8. Transfer of a PPF account

A PPF account can be transferred to any other branch, or any other bank, or Post Office, at the request of the PPF account holder. This service is free of charge.
Step 1 – Approach the bank or post office branch where the PPF account is held and ask for the necessary forms to be filled.
Step 2 – The existing bank will then forward the certified copy of the account, nomination form, the account opening application form, and the specimen signature along with the cheque/dd for the outstanding amount in the PPF account, to the new bank at the branch specified by the customer.
Step 3 – Once the new bank branch or the post office receives these documents, they will inform and will ask you to submit a new PPF account opening form along with the old PPF passbook. A new nominee can be submitted as well.
Step 4 – Check in a couple of weeks that the transferred PPF account now shows up under the PPF account tab/link in the log-in of your internet banking id; if not, then inquire at the local bank branch or the local post office branch.

9. Inactivation and reactivation of PPF account

(i) Money has to be deposited or invested each year to keep a PPF account active. The minimum requirement of Rs.500 should be met each financial year, if not, the PPF account from that financial year is deemed inactive.
(ii) Loan facility cannot be availed when the PPF account is inactive.
(iii) To reactivate the PPF account an account holder has to pay a penalty of Rs.50 per year for inactivation, and the minimum amount cumulative for each inactive year as well.
For instance, if an account has been inactive from year 4 to year 7 and now if you want to reactivate the account in year 8, then a penalty of Rs 50 each year for 4 years has to be paid ie., Rs 200 (Rs 50*4 years). Deposit amount - Rs 500 * 4 years = Rs 2000 needs to be deposited as well along with the penalty of Rs 200.  

10. Tax implications on a PPF account

PPF falls under the EEE (Exempt, Exempt, Exempt) tax basket. Investments into the PPF account are eligible for tax benefits under Section 80C of the Income Tax Act, for up to a maximum of 1.5 lacs per annum. The total amount received upon maturity and the interest earned is both exempted from income tax. Contributions to the PPF accounts of the spouse and children are also eligible for tax deduction.
  • I am a NRI, Can i open PPF account?
    No, NRI cannot open a PPF account but NRIs who have opened PPF account when they were residents can operate the account for a period of 15 years without option of further extension.
  • Can I withdraw the facility of PPF account?
    Yes, partial withdrawal facility can be availed from 7th financial year onwards.
  • Can grandparents open a PPF account for their minor grandchildren if parents are alive?
    No, grandparents cannot open the account, minor child’s PPF account can be opened and operated by any one parent.