As one of the largest banks of India, State bank of India (SBI) provides a range of banking products through its huge network in India and overseas, including products aimed at NRIs. Along with ICICI Bank, Axis Bank and HDFC Bank, SBI is one of the Big Four Banks of India. ICICI Bank, Axis Bank and HDFC Bank are the main competitors of the SBI bank. SBI has over 16000 branches in India. According to Forbes, SBI is the 29th most reputed company in the world.
To open a Public Provident Fund (PPF) account is the desire of most of people but they delayed it because they don’t want to take action. State Bank of India is the one of the most trusted banks of India and so most of people desire to open their PPF accounts with this bank. To open a PPF account in SBI bank is very easy. You have to follow just three steps to open PPF account at SBI bank. The process takes maximum 30-45 minutes if you prepare in advance and go with all the documents required and there are no blockings in between. SBI also provides the online transaction facility to deposit in your PPF account online which is the main advantage of opening the PPF account with SBI. And so you don’t have to scuttle to the branch every time.
Public Provident Fund (PPF) Account:
The central government has established the public provident fund. Everyone can open this account even if they are not earning. PPF account can be opened at any nationalized bank or its branches that handles PPF accounts. This account can also be opened at the head post office or certain select post offices. Once your account has been opened, you can take a loan on the PPF from the third year of opening your account to the sixth year. The amount of loan that you take will be up to the maximum 25% of the balance in your account at the end of the first financial year. At the end of the fourth year, you can withdraw 50% of your balance, proceeding the year in which the amount is withdrawn or the end of the preceding year whichever is lower. Withdrawal from your account can be made during any one year from the sixth year. Partial withdrawal up to 60% of the balance is allowed at the end of the 15 year period if your account has been extended beyond 15 years.
- Minimum amount to be deposited in this account is Rs 500 per year and maximum amount you can deposit every year is Rs 70,000.
- Tax benefit under Sec 80C, no tax on the maturity and no tax on interest earned.
- If you are involved in a legal dispute, a court cannot attach or question the money in your PPF account.
- Return on investment: 8%
PPF account also helps people in their future. After 11 or 12 yrs, if you have to invest some money for short term then you can invest money in your PPF account. Your invested money will get matured in next 3-4 yrs and whole maturity amount would be Tax-free and also you can earn interest of 8%. You have to pay only Rs 500 per year for your PPF account to be active.
Opening of PPF account at SBI bank:
To open PPF account at SBI bank you have to follow only three steps that are given below.
1). Select one SBI branch which is authorized to go government business:
Any large branch of the bank has lots of customers. Generally, newer and smaller branches may not have lot of customers. For opening PPF account, select a branch where you have not a saving account.
2). Procure and submit account opening form and Identity/address Proofs
Only three minutes are required to fill an opening account form. Then, select a nominee and get a spectator signature. After that, you have to submit anyone of following identity proofs.
- Driving license
- Pan card
- Ration card
- Voter id
- Two Passport Size Photographs
Also, any identity or address proof which is issued by government should work. For verification of proof, keep originals of proof in hand if needed. After completing this procedure, bank should be able to open the account and it may take about 20 minutes or so.
3). Get PPF Passbook:
After completion of above procedure, a pay-in slip needs to be filled and the initial subscription needs to be credited into your account. PPF Passbook similar to a Saving Book passbook will be issued after this. A passbook issued by bank, has your photo affixed and the nominee’s name stated. On the back side of passbook, you can find PPF rules.
How to Link your Online SBI Account to SBI PPF account for Online Transaction:
You can also link your Online SBI Account to SBI PPF account. For online transaction, you can add the PPF account as a third party account to your online SBI account. No processing charges are available for such transfer. After first online transaction, you have to go to the bank and update your PPF passbook and also check that your transaction has been occurred correctly. The major disadvantage of SBI-PPF (and post office) accounts is that you cannot look at the amount in the PPF account as yet in SBI.
For auto-credit to PPF, a standing instruction maybe issued from your online account. The disadvantages are:
- You cannot subscribe a lower amount if you need the cash for emergency use (this situation will not arise if you had an emergency fund).
- Rarely there may be system failures and the standing instruction may not get honored. So you need to check if it has occurred.
- You need to go to the bank to cancel the standing instruction
Take care of before issuing a standing instruction, because there are only 12 credit transactions allowed per year.
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