Here are 10 things to know you need to know before opening PPF account with SBI:
Eligibility: A Public Provident Fund (PPF) account can be opened by resident Indian individuals and individuals on behalf of minors, according to SBI's website. A PPF account can also be opened either by the mother or father on behalf of their minor son or daughter; however the mother and father both cannot open PPF accounts on behalf of the same minor. Grandparents cannot open a PPF account on behalf of minor grand-child; however, in case of death of both the father and mother, grand-parents can open a PPF account as guardians of the grandchild, according to SBI's website- sbi.co.in.
How to apply:To apply for the PPF Provident Fund (PPF) scheme, an individual is required to fill the PPF account opening form and submit it at any SBI branch with relevant documents. The PPF account can be opened in one of the branches. Subscribers must mention the name of branch where he/she wishes his/her PPF account to be opened. The documents required to open PPF accounts are - nomination form, passport size photograph, copy of PAN (Permanent Account Number) card, ID proof and residence proof as per bank's KYC norms.
Minimum/maximum contributions: A minimum of Rs 500 subject to a maximum of Rs 1,50,000 per annum can be deposited in PPF account, according to SBI.
Maturity: A Public Provident Fund (PPF) account gets matured after the completion of 15 years from the end of the year in which the account was opened.
How to extend tenure of PPF investment beyond maturity period: A customer can extend the tenure of a PPF investment for a block period of 5 years beyond the maturity period by submitting a form within one year from the date of maturity.
Income tax benefits: Under SBI's PPF account, income tax benefits are available under Section 88 of Income Tax Act. Interest income is totally exempt from Income Tax.
Premature withdrawal: In case of PPF account, customer can make one withdrawal every year, from the seventh financial year, of an amount that does not exceed 50 per cent of the balance of the customer credit at the end of the fourth year immediately preceding the year of withdrawal or the amount at the end of the preceding year, whichever is lower.
What happens in case an investor fails to deposit any amount in one or more financial years: A penalty of Rs 50 is levied per year of default, if the customer doesn't deposit the minimum deposit amount of Rs 500 on the completion of the financial year.
Loan facility on my Public Provident Fund (PPF) investment: Customers can avail of the loan facility between third financial year to sixth financial year, which is from third financial year up to end of fifth financial year, as mentioned on SBI's website.
How to transfer existing PPF account maintained with another bank/post office to SBI: To transfer the existing PPF accounts to SBI, the subscriber is required to approach the bank or the post office where his/her current PPF account is held and make an application for transfer of PPF account to the desired SBI's branch. Once the application is processed, the existing bank/post office arranges to send the original documents such as a certified copy of the account, the account opening application, nomination form, specimen signature etc. to SBI branch address provided by the customer, along with a cheque/DD for the outstanding balance in the PPF account.