Opening a PPF Account in a Bank Vs Post Office

How to Open a PPF Account in Bank?

How to Open a PPF Account in Post Office?

What Are the Key Differences Between PPF in Bank and PPF in Post Office?

We suggest you go through this tabular comparison to understand the difference between PPF in bank and post office.

Point of Difference

Bank PPF Account

Post Office PPF Account

Online Money Deposition

To deposit money in a bank PPF account, you must add that account as a beneficiary after logging into a registered net banking account. Then you can either opt for direct funds transfer or third-party transfer (when you have opened the PPF account with a separate banking institution).

If you have a post office PPF account you can transfer funds to that account via the India Post Payment Bank or IPPB app. However, before availing this service you must first register your PPF account with a valid DOP customer ID.

Interest Rates Relative to Savings Accounts

Interest rates can be as high as 6% - 7% for bank savings accounts, if you maintain deposits from ₹1 Lakh - ₹5 Lakhs. Therefore, PPF interest rate of 7.1% is slightly higher compared to bank savings accounts.

The 7.1% interest rate offered by PPF is much more beneficial compared to other post office savings schemes. This is because post office savings accounts offer a 4% interest rate.

PPF Eligible Financial Institutions

Every bank can process PPF account opening requests.

Only double-handed post offices can handle PPF account opening requests.

As you have gained a clear idea regarding PPF in bank vs post office, now you can decide which one will better suit your nature of investing. Since in terms of eligibility, interest rates, lock-in period, loan against PPF, etc. there is literally no difference, you can choose between any of the two options per your convenience.

FAQS about PPF in Bank Vs Post Office

Is it better to open a PPF account in a bank or post office?

Whether you choose to open your PPF account in a bank or post office, the scheme features tend to remain similar. Also, in both cases, you get to access the benefits both offline and online. Therefore, no particular option between the two is superior to the other.

Is there any disadvantage of saving money in a PPF account?

If you are expecting high liquidity on your PPF investments then it will disappoint you as PPF accounts come with a 15-year long lock-in period. Moreover, the interest rates are subject to changes depending on quarterly evaluations.

What is the best time to start PPF?

It is a great strategy to contribute a sizeable lump sum on or before April 5 of a particular year. This allows you to enjoy the annual interest of the previous year on a newly deposited amount. Also, it is a great practice to make monthly deposits before the 5th of each month as it allows monthly interest to be added to the deposits.