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Post Office Public Provident Fund Account: Interest Rate, Features, Eligibility and Benefits

Post Office Public Provident Fund Account

India Post is the best organization that reaches remote areas. India post also provides savings schemes in remote parts such as Public Provident Fund and other savings schemes as well. This scheme provides you with guaranteed return and tax benefits. A post office has to following process to open a PPF account in the post office. Here you will get all the necessary information regarding the PPF account opening at the post office.

Post office PPF account Interest Rate 2022

The Public Provident Fund Scheme is powered by the Indian government. That’s why PPF interest rates are the same both in post offices and banks that provide this facility. The finance ministry declares the rate of interest every quarter. The current interest rate is 7.10% at post offices.

The interest rate of PPF is based on the minimum balance of the customer’s account between the 5th day and the last day of each month. Therefore customers should make PPF deposits before the 5th of the particular month.

Eligibility Criteria for opening a PPF account in Post Office

The following are some key eligibility criteria for opening a post office PPF account:

  1. A person who is a citizen of India including salaried, pensioner, and similar category can open a PPF account in the Post Office.
  2. A person can open a single account under their name and a joint account is not allowed. If an Individual opens a second account then the principal amount is refunded without interest.
  3. Minor PPF accounts can be opened by guardians on the behalf of a minor in the post office.
  4. Non-Indians can not open a PPF account

Documents Required for Post Office PPF Account

The following documents are required to open a PPF account in the post office:-

  • Identity proof- Voter ID, Passport, Driving License, Aadhaar Card
  • Address Proof- Voter ID, Passport, Driving License, Aadhaar Card
  • PAN Card
  • Passport size photograph
  • Nomination Form- Form E

How To Open PPF Account Open in Post Office

The procedure of opening a PPF account in a post office is still paper-based and applicants had to present at the post office while opening a PPF account. Below are the key steps of the account opening process:

  1. The first applicant gets the account opening form from a nearby post office or online and fills it out
  2. When you fill out the form go to the nearest post office along with self-attested required KYC documents (PAN Card, Aadhaar Card, and Voter Card) and passport size Photos.
  3. While opening an account applicants must have to deposit an initial deposit of INR 500 via cheque/draft. However, individuals can deposit a minimum amount of 500 and a maximum of 1.5 lakh in a financial year
  4. After submitting all required documents and the initial deposit. Individuals get a PPF account. The Passbook contains details of the account number, account holder name, balance, and branch details.

Features of a Post Office PPF Account

Minimum Amount: The minimum amount that can be deposited every year is INR 500. This also helps to keep the account active.

Minimum Amount: Individuals have to deposit a minimum amount of 500 INR yearly to keep the account active.

Maximum Amount: One can deposit a maximum amount of 1.5 lakh in a financial year.

Maturity Period: The PPF account minimum tenure is 15 years. And also can extend the term by 5 years indefinitely.

Loan Facility: one can get a loan against their PPF account. A person can avail of a loan facility between the 3rd and 5th years.

Nominee: one can add a nominee while opening an account and even after the account is opened.

Withdraw facility: The user can withdraw, only completion of 5 years of continuous investment. But one can withdraw only a partial amount.

Premature Closure: premature closer is available under special circumstances.

Mode of payment: Users can make payments in a lump sum or 12 installments in a financial year.

Minor Account: One who already has a PPF account can open another one on behalf of a minor.

Joint Account: Joint account not allowed in PPF account

Benefits of PPF Account in Post Office

The following are the benefits of a Post Office PPF Account:

  • The interest rate associated with a Post Office PPF account is comparatively higher than several other saving schemes as well as bank Fixed Deposits. The current rate of interest is 7.1% for Q3 of FY 2022-23
  • Individuals get a higher interest rate as compared to other savings schemes and bank FD as well. The current interest rate is 7.1% for Q3 of FY 2022-23
  • This scheme is secure and safe because this scheme is backed by the government.
  • For people who do have not much money to invest, then this is the best scheme for them to invest 500 rupees minimum in financial years.
  • Individuals can open a PPF account in a post office through cash or cheque.

FAQ

1. Which is better PPF or FD?

Ans: Although FD may be safer, a Public Provident Fund assists individuals to get long-term good returns. If you would like to keep your money safe for the long term, Public Provident Fund Account may prove beneficial.

2. Is PPF better than LIC?

Ans: PPF and LIC will assist you in do an informed decision. PPF and LIC are various investments and suit various requirements. The Purpose of PPF is savings and the purpose of LIC Policies is to provide insurance.

3. Is PPF risk-free?

Ans: Public Provident Fund is a risk-free investment, backed by the Government of India. The minimum investment in a financial year is 500 rupees.

4. What are the disadvantages of PPF?

Ans: Cons of PPF

  1. The investment term of this scheme is for 15 years
  2. A joint account is not allowed. one person can open only one account
  3. NRI and HUFs cannot open an account
  4. The maximum deposit in a PPF account is 1.5 lakh for the financial year

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