PPF (Public Provident Fund) is a long-term savings scheme offered by the Government of India, which can be opened at any branch of State Bank of India (SBI). It is a tax-free investment option with a fixed rate of interest, offering secure savings for individuals. The minimum investment amount and the maturity period are both 15 years.
What is PPF Account in SBI
Public Provident Fund (PPF) is a government-backed savings scheme in India, aimed at promoting long-term savings among individuals. SBI is one of the many institutions where Indian citizens can open a PPF account.
Here are the key features of a PPF account in SBI:
- Eligibility: Any Indian citizen, including minors (through a guardian), can open a PPF account with a minimum deposit of ₹500.
- Investment: The minimum investment amount is ₹500 and the maximum is ₹1.5 lakh per financial year. The deposits can be made in lump sum or in 12 installments in a year.
- Tenure: The maturity period of a PPF account is 15 years, and it can be extended for a block period of 5 years after maturity.
- Interest rate: The interest rate is fixed by the government and is revised on a quarterly basis. Currently, it is 7.1% p.a. compounded annually.
- Tax benefits: PPF contributions are eligible for tax deductions under Section 80C of the Income Tax Act, up to a maximum limit of ₹1.5 lakh per financial year. The interest earned and the maturity amount are tax-free.
- Loan facility: A loan can be availed from the 3rd financial year until the 6th financial year, up to a maximum of 25% of the balance at the end of the second financial year immediately preceding the year in which the loan is applied for.
- Nomination: A PPF account holder can nominate one or more individuals to receive the account balance in case of their death.
- Withdrawal: Partial withdrawals are allowed from the 7th financial year, and the account can be closed after 15 years or after completion of the extended block period.
In conclusion, a PPF account in SBI offers a safe and secure savings option with attractive tax benefits and a fixed rate of interest.
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FAQ: About what is ppf account in sbi
Here are some frequently asked questions (FAQs) about PPF accounts in SBI:
A PPF account in SBI is a savings scheme offered by the Government of India, which can be opened at any branch of State Bank of India. It is a long-term investment option aimed at promoting savings among individuals.
Any Indian citizen, including minors through a guardian, can open a PPF account in SBI.
The minimum deposit for a PPF account in SBI is ₹500, and the maximum is ₹1.5 lakh per financial year.
The maturity period of a PPF account in SBI is 15 years, and it can be extended for a block period of 5 years after maturity.
The interest rate for a PPF account in SBI is fixed by the government and is revised on a quarterly basis. Currently, it is 7.1% p.a. compounded annually.
Yes, PPF contributions are eligible for tax deductions under Section 80C of the Income Tax Act, up to a maximum limit of ₹1.5 lakh per financial year.
Yes, a loan can be availed from the 3rd financial year until the 6th financial year, up to a maximum of 25% of the balance at the end of the second financial year immediately preceding the year in which the loan is applied for.
Yes, a PPF account holder in SBI can nominate one or more individuals to receive the account balance in case of their death.
Partial withdrawals are allowed from the 7th financial year, and the account can be closed after 15 years or after completion of the extended block period.