How To Open A PPF Account At A Post Office?

Public Provident Fund (PPF) is a great investment and a tax savings tool, for an investor to build a corpus for his retirement. This is done by investing a systematic amount in the instrument every year. By this an individual can claim tax rebate every year on whatever amount he invests in. Tax benefits available with the PPF amounts to Rs 1.5 lakhs per year under Sec80C of the Income Tax Act.

Non Resident Indians are not eligible to open an account under the Public Provident Fund Scheme

Documents needed

Before visiting the post office check for all the necessary documents. One needs to carry his ID and address proof along with his photograph.

* Ration card
* PAN card
* Passport
* Voters ID
* Aadhaar card
* 2 passport size photograph
* Amount to deposit

How to open an account at the post office?

* Visit your nearest head office

* Fill in the form with all details

* Paste your photograph

* Deposit the amount required

Once your account is opened you will get your passbook. This passbook will have all the details like account number, branch name etc.

How much amount is required?

Minimum amount to open an account is Rs 500 and there is no limit for maximum amount.

Tax:

However, as of now only investment up to Rs 1,50,000 per annum qualifies for IT Rebate under section 80 C of IT Act.

Loan facility?

Loan facility is available from 3rd financial year upto 5th financial year. The rate of interest charged on loan taken by the subscriber of a PPF account on or after 01.12.2011 shall be 2% p.a.

However, the rate of interest of 1% p.a. shall continue to be charged on the loans already taken or taken up to 30.11.2011.

Withdrawal?

The facility to withdraw is permitted from 6th financial year. However, it is not recommended to withdraw your amount as it will act as cushion during your retirement.

PPF account can be opened jointly, or can be opened behalf of minor child of whom he is the guardian.

Conclusion

If you are not very comfortable in opening a PPF account at the post office, you can also open PPF accounts at the Banks. Most of the government and private sector banks offer this facility. It is still better, if you also have a savings bank account at the branch, which can than be linked to your PPF account. This will allow easy credit to and from the savings account.

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