All about PPF Eligibility Criteria
Public Provident Fund is a long-term investment instrument in India. It comes with associated benefits like attractive interest rates and returns on the invested amount. To invest in PPF, one should be acquainted with some eligibility criteria.
In this article, we will discuss PPF eligibility and its investment procedure.
Without any further delay, read on to know more!
PPF eligibility criteria for an Indian citizen
One needs to fulfill particular eligibility to open a PPF account. Upon opening an account, you also become eligible for tax benefits under Section 80C of the Income Tax Act. Therefore, interests earned and returns are not taxable under Income Tax.
Here are the PPF account eligibility criteria one needs to be aware of before investing.
- Only Indian citizens residing in the country can open a PPF account.
- Individuals over 18 years will meet the age requirement for PPF eligibility. There is no upper age limit for opening a PPF account.
- You can open a single PPF account in your name. Even if you fulfill all eligibility for a PPF account, you cannot initiate a second one.
Apart from fulfilling the age criteria for a PPF account, applicants need to provide certain documents for a successful application.
Documents required to open a PPF account
Document verification is a vital part of PPF eligibility. One needs to present the following documents during the application procedure:
- Form A or the PPF account opening form (obtained from an authorised bank)
- KYC documents like Aadhaar, Voter ID or driver’s license
- Address proof
- PAN card
- Passport-size photograph of the applicant
- Form E or nomination form (obtained from any bank authorised to open a PPF account)
Furthermore, individuals below 18 years can also invest in PPF upon adhering to the below-mentioned criteria.
Eligibility of minors to invest in PPF
Minors can also open a PPF account under the following conditions:
- Only one of the parents or guardians can open the accounts on behalf of them.
- Those operating the minor’s account should be their legal guardian.
- While opening their accounts, registration of a nominee is mandatory.
- Total PPF investments in a minor’s account cannot be more than Rs.1.5 lakhs for a particular financial year. The minimum amount to contribute to the account is Rs.500.
- Grandparents cannot open Public Provident Fund accounts for their grandchildren.
In addition to this, the parents of the minors should provide their details in the account opening form and carry their KYC documents along with a photograph for verification.
Further, non-resident Indians cannot open new PPF accounts as per the Indian Ministry of Finance’s announcement in August 2018. However, there are certain factors to be considered here.
PPF eligibility for NRIs
NRIs and Hindu Undivided Families are not allowed to open PPF accounts. Some of the exceptions to this are as follows:
- Any resident Indian who has become an NRI can continue with their existing account until the completion of tenure.
- NRIs can keep their existing accounts till the maturity period that is 15 years. However, they cannot extend it for 5 years as Indian citizens can.
Now that we have gone through the eligibility criteria for opening a PPF account, let’s understand the procedure to invest in PPF.
Investment procedure for PPF
Upon meeting the eligibility, applicants can invest in PPF via online and offline modes. In the following section, we discuss both the procedures in a step-by-step manner for your convenience.
For investing in PPF, one needs to open an account first. Here are the steps.
- Log in to your online banking portal.
- Click on the “Open a PPF Account” option.
- Select the relevant option between “Self Account” and “Minor Account.”
- Input the necessary information such as nominee details, bank details, and more.
- In the next step, verify the details as shown on the screen.
- After verification, enter the amount that you plan on depositing in the PPF account.
- Now you need to set up standing instructions to allow the bank to deduct your amount in a fixed interval or a lump sum.
- Upon selecting an option, you will receive an OTP in your registered mobile number.
- Once you enter the OTP, your PPF account will be functional. Make a note of the account number for future references.
After opening a PPF account, one should know the basics of investment. They are as follows:
- You can make investments every year through a maximum of 12 installments.
- Further, you can make a yearly contribution of a minimum of Rs.500 and a maximum of Rs.1.5 lakhs to your PPF account.
- The fixed tenure for the account is 15 years. However, you can extend it for 5 more years.
- Investments under PPF are eligible for deductions under Section 80C of the Income Tax Act.
Now, it is imperative to know how to invest in PPF and how you can deposit the amount online.
- You can proceed with online deposits through a funds transfer in case your savings and PPF account are both under the same bank. Alternatively, you can deposit through a third-party transfer if the accounts are in different banks.
- Another convenient way to make an online deposit is via net banking. All you need to do is add your PPF account as a beneficiary by logging in to your net banking account and transfer funds in a seamless manner.
- Further, you can instruct the bank to credit the PPF investments from your account automatically.
Therefore, by following the above procedure, one can know how to invest in PPF online.
For the offline procedure, one can open a Public Provident Fund account by visiting a particular bank authorised under the PPF scheme. Here is a list of banks that enable you to open a PPF account.
State Bank of India
Bank of India
Punjab National Bank
Bank of Baroda
Union Bank of India
Bank of Maharashtra
Oriental Bank of Commerce
Indian Overseas Bank
United Bank of India
Central Bank of India
Upon visiting the bank, one can deposit the amount in different ways given below.
- Fill up the deposit challan form or Form B.
- The deposit slip has two sections- the main section and two counterfoils for the bank agent and the applicant.
- Enter the necessary details like name, address, account number of PPF, deposit value, and the mode of payment.
- To invest in PPF offline, one can pay in cash, cheque, or demand draft.
- After making the payment via your desired mode, you can collect the receipt from the teller.
In addition to the procedure for investment in PPF, one should know how to check PPF account balance online.
Check your PPF account balance online
It is easy to check the PPF balance online as it is associated with a bank account. You can log in to your bank’s e-Portal by inputting internet banking credentials and go through your PPF passbook. With the help of this passbook, you can view your monthly statements of investment in PPF and check your balance any time you want.
Moreover, if you have a PPF account at a post office, you need to visit the same post office branch to update the PPF passbook and check the balance after that.
However, an individual not fulfilling the eligibility cannot proceed to the investment procedure in the first place. Therefore, it is crucial to follow the eligibility criteria beforehand to invest in PPF.