Public Provident Fund

• Account can be opened by an individual/an individual on behalf of a minor or a person of unsound mind of whom he/she is the guardian, provided that only one account shall be opened in the name of a minor or a person of unsound mind by any of the guardian.
• Only those minor PPF accounts opened with grandparents or without Legal Guardian will be treated as ‘Irregular accounts’ and will be given Post Office Saving Account (PoSA) interest.
• Joint account shall not be opened under this Scheme.
• Minimum Rs. 500 in a financial year, maximum Rs. 1,50,000 in multiples of Rs. 50 may be made in an account in a year.
• The deposit in the account may be made in the account in one lump sum or in instalments.
• PPF accounts are transferrable to/from any Bank/Branch, Post Office

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Eligibility

Any adult in his/her name or on behalf of minor's name or a person of unsound mind’s name in the capacity of guardian, can open PPF account. HUF and NRIs cannot open PPF account.

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Online subscription facility

• PPF account can be opened through bob World.
• Standing Instructions facility can be initiated in bob World as per convenient of customer.
• Existing customers having PPF account with Bank of Baroda can deposit online in PPF account from Bank of Baroda savings account.

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Minimum amount

Rs. 500 per annum is required to be deposited. The accounts in which deposits are not made for any reason are treated as discontinued accounts and such accounts cannot be closed before maturity. The discontinued account can be activated by payment of the minimum deposit of Rs. 500 with default fee of Rs. 50 for each defaulted year.

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Maximum amount

Rs. 1.5 Lakhs per annum. The deposit in the account may be made in the account in one lump sum or in instalments.

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Maturity period

15 years. An account, on the expiry of fifteen years, can be extended for a further period of five years for n number of times.

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Interest Rate

• The interest is paid as per the rates declared by the Government from time to time.
• Interest for the present quarter is 7.1 % p.a.
• The interest is compounded annually.
• The interest for the month is calculated on the minimum balance available in the account from fifth of a month to the last date of the month.
• In case of cheques drawn on other banks date of realisation of the cheque shall be the date of deposit.

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Transferability

A PPF account can be transferred from a branch of an authorised bank to post office and vice versa and also from a branch of the bank to another branch.

A PPF account cannot be transferred from one person to another. Even in the case of death of a depositor, the nominee cannot continue the account.

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Loan facility

At any time after the expiry of 1 year from the end of the year in which the initial subscription was made but before expiry of 5 years from the end of the year in which the initial subscription was made, the account holder may, apply for obtaining a loan consisting of a sum not exceeding 25% of the amount that stood to credit at the end of the second year immediately preceding the year in which the loan is applied for.

In case of an account opened on behalf of a minor or a person of unsound mind, the guardian may apply for the loan for the benefit of the minor or the person of unsound mind.

An account holder shall not be entitled to get a fresh loan so long as earlier loan has not been repaid in full together with interest thereon. An account holder shall be entitled for only one loan in a year.

The principal amount of a loan shall be repaid by the account holder before the expiry of 36 months from the first day of the month following the month in which the loan is sanctioned either in one lump sum or in instalments.

After the principal amount of the loan is fully repaid, the account holder shall pay interest thereon in not more than 2 monthly instalments at the rate of 1% per annum of the principal for the period commencing from the first day of the month following the month in which the loan is drawn up to the last day of the month in which the last instalment of the loan is repaid. However, where the loan is not repaid, or is repaid only in part, within a period of 36 months, interest on the amount of loan outstanding shall be charged at 6% per annum instead of at 1% per annum with effect from the first day of the month following the month in which the loan was obtained, to the last day of the month in which the loan is finally repaid.

The interest on the amount of loan outstanding and any portion of interest payable, but not paid, on any loan, the principal amount of which has already been repaid within the period of 36 months, may, on becoming due, be debited to the holder’s account. The interest on outstanding loans which are not paid before the expiry of 36 months or paid partly shall be debited to the holder’s account at the end of each year.

In case of death of the account holder, the nominee or legal heir shall be liable to pay interest on the loan availed by the account holder but not repaid before his death. Such amount of due interest shall be adjusted at the time of final closure of the account.

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Withdrawal facility

Any time after the expiry of 5 years from the end of the year in which the account was opened, the account holder may, avail withdrawal from the balance to his credit not exceeding 50% of the amount that stood to his credit at the end of the fourth year immediately preceding the year of withdrawal or at the end of the preceding year, whichever is lower:

Provided that the amount of loan outstanding, along with interest shall be paid by the account holder before availing the facility of withdrawal.

The facility of withdrawal may be availed only once in a year only from the accounts which have not become discontinued.

In case of an account opened on behalf of a minor, or a person of unsound mind, the guardian may apply for the withdrawal for the benefit of the minor or a person of unsound mind.

Facility of partial withdrawal shall be available to the account extended subject to the condition that the total withdrawal during the block period of five years shall not exceed sixty per cent of the balance at credit at the commencement of the block period Provided that the withdrawal may be made either in a single or in yearly instalments.

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Premature Encashment

An account holder shall be allowed premature closure of his account or the account of a minor or person of unsound mind of whom is the guardian on any of the following grounds, namely: -

• Treatment of life threatening disease of the account holder, his spouse or dependent children or parents, on production of supporting documents and medical reports confirming such disease from treating medical authority;
• Higher education of the account holder, or dependent children on production of documents and fee bills in confirmation of admission in a recognised institute of higher education in India or abroad;
• On change in residency status of the account holder on production of copy of Passport and visa or Income tax return:

Provided that an account under this Scheme shall not be closed before the expiry of five years from the end of the year in which the account was opened and interest in the account shall be allowed at a rate which shall be lower by one per cent than the rate at which interest has been credited in the account from time to time since the date of opening of the account, or the date of extension of the account, as the case may be.

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Tax benefits

Investments in PPF accounts are eligible for deductions under Section 80C of the Income Tax Act, up to Rs.1.5 lakh per year. Furthermore, the interest earned and the maturity amount are exempt from tax.

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Other features

• The benefits of exemption of interest from Income Tax is not available on deposits made in a PPF account after expiry of fifteen years without exercising option in writing for continuance of the account within one year.
• The deposit in a minor account is clubbed with the deposit of the account of the guardian for the limit of Rs. 1,50,000 per annum.
• On death of the account holder his nominee(s)/legal heir(s) cannot continue the account. The account has to be closed in such case.
• Deposits in excess of Rs. 1,50,000 per annum in a financial year in a PPF account are refunded without interest and the excess amount is not considered for income tax rebate.

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Deposit of any Branch of Bank

The PPF account holders can deposit subscription at any branch of the Bank.

The following documents are accepted as valid documents for the purpose of identification and address proof:
1. Passport
2. Driving license
3. Voter’s ID card
4. PAN card
5. Job card issued by NREGA signed by the State Government officer
6. Letter issued by the National Population Register containing details of name and address)

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In case of minors, following documents are required:
1. Proof of Date of Birth
2. details of Guardian(Natural/Legal) along with KYC documents

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Important:

As per Government Savings Promotion General (Amendment) Rules, 2023 dated 03.04.2023 submission of Aadhaar Card and Pan Card/FORM 60 is mandatory for New & Existing Customers.

• A minimum of Rs 500/- is to be contributed in the PPF account every year
• As per Government guidelines, NRI and HUF cannot open PPF account.
• Joint account shall not be opened under this Scheme.