10 things you need to know about SBI Public Provident Fund (PPF) scheme

1. What is PPF scheme?
Public Provident Fund (PPF) is the favourite scheme among the taxpayers at least during the last days of the financial year. This is because it offers tax benefits under Sec 88 of the Income tax act. Apart from obtaining decent interest rates, the scheme provides the option of investing in instalments.

PPG scheme was introduced by the National Savings Organization in 1968 to provide small savings options to the people. PPF scheme offers an investment avenue with satisfactory returns coupled with income tax benefits.

2. Who can open the PPF account? 
Individuals in their own name or on behalf of a minor can open the account at any SBI Branch. The opening of PPF accounts in the name of Hindu Undivided Family is not permitted according to law.

3. Is there any maximum limit to deposit money? 
Yes, a minimum of Rs 500 up to a maximum of Rs 1,50,000 per annum can be deposited in the PPF account. The account holder should not deposit more than Rs 1,50,000 per annum as the excess amount will neither earn any interest nor will be eligible for the rebate under Income Tax Act. The amount can be deposited in lump sum or in a maximum of 12 instalments per year.

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4. What is the duration of the PPF account? 
The original duration is 15 years. Thereafter, on application by the subscriber, it can be extended for 1 or more blocks of 5 years each.

5. What is the rate of interest and are the interest rates variable?
The rate of Interest is determined by Central Government on a quarterly basis. At present, it is pegged at 7.90% per annum with effect from 01.04.2017. Interest is paid on 31st March every year. Interest is calculated on the minimum balance between 5th day and end of the month. The rate of interests varies year to year.


6. Can I avail loan on the PPF amount? 
Yes, loans and withdrawals are permitted depending upon the age of the account and balances as on the specified dates.

7. Can I avail Income tax benefit on the money deposited in the PPF account? 
Yes, Income Tax benefits are available under Sec 88 of IT Act. Interest income is totally exempt from Income Tax. The amount outstanding to the credit is fully exempted from Wealth Tax also.

8. Can I add a nominee to my PPF account?
Nomination facility is available in the name of one or more persons. The shares of nominees may also be defined by the subscriber.

9. Can I transfer the PPF account to another branch?
Yes, the account can be transferred to other branches/ other banks or Post Offices and vice versa upon request by the subscriber. The service is free of charges.

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10 Can I debit the money prematurely? 
Premature payment is allowed only after the account or the account of the minor account holder of whom he/she is the guardian has completed five financial years.