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PPF Account Form A (Account Opening Form)

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Jun 122016
 

PPF Account Form A (Account Opening Form)

PPF or Public Provident Fund was a government scheme that was launched back in 1968. It is a government-run small investment scheme which is known for offering one of the most attractive interest rates offered by any investment vehicle in the same category.

PPF Account Form A (Account Opening Form)

Being a government-backed investment area, PPF is also one of the most secured investment options available in market. There are many flexible features of PPF. Let us take a quick look at some of the most important features before we start exploring the PPF Form A.

Some Features of PPF

  • Allows small investments of minimum INR 500.00 a year.
  • The maximum investment allowed in a year is capped at INR 150,000.00.
  • Deactivated accounts can be reactivated by making necessary investments.
  • Investments made into the account are not taxed.
  • Interests earned by the investments are not taxed either.
  • Since the PPF account is to be run for a period of 15 years, the accumulated fund actually works as a retirement corpus.
  • Account holder can opt for loan against PPF account (subject to certain conditions) at a very low rate of interest.

Well, there are many more features but since this article is meant for providing information on Form A associated with PPF, we will limit our discussion on PPF account here and divert our attention to Form A.

What is PPF Account Form A? 

PPF Form A is the first form one has to come accross when someone plans on openning a PPF account. In other words, this form is the form that one has to fill up and submit when someone wants to open a PPF account.

Where is PPF Form A found?

This account opening form is available with all banks that are authorized by the government to open a PPF account. The form can also be availed at a post office because a PPF account can also be opened at a post office. However, one needs to understand that Form A from post office will not be accepted by banks and vice versa. Similarly, Form A from one bank will not be accepted by another bank.

What is there in PPF Form A?

It is a simple form which asks for the details of the person who is willing to open up a PPF account. The form has several components that must be filled up properly with accurate information. The information provided in the form will be cross-verified with the information found on the documents that will be submitted along with the form. Also, the information on the documents will be cross-verified with information stored with the issuers of those documents. Hence, providing accurate information in Form A is mandatory.

Let us take a look at the components of Form A in a tabular format:

Component What is Required
Photograph field Requires a color passport-sized photo clicked recently.
PAN field PAN details are to be provided.
Name field Here the name of the person who wants to open the PPF account is to be provided. However, if the person wants to open the PPF account in someone else’s name the name of the other person is to be provided accordingly. The person opening the account needs to be the guardian of the person on whose name the account will be opened.
Address field This is where the person – who is either himself or herself the subscriber or is the guardian of the person on whose name the account is being opened – has to provide the permanent residential address.
Minor Details Segment

In case a person wants to open a PPF account for a minor, this segment becomes mandatory or else, one can safely ignore this section.

DOB field in Minor Details Segment This is where the date of birth of the minor is to be provided in case the account is being opened for a minor.
Relation field in Minor Details Segment Here the relationship between the person opening the account and the minor on whose name the account is being opened is to be provided.
Other PPF accounts’ details in Minor Details Segment The person who is opening the PPF account for a minor may already have existing PPF accounts. These existing accounts may be in his/her own name, in name of other minors, for Hindu Undivided Family or he or she may maintain a PPF account for as Association comprising of several persons or inviduduals. Details of all such PPF accounts are to be provided accurately in this section.
Date and Signature field These are the last fields of the form that the person needs to take care of. In the signature field, the applicant can actually provide a thumb impression in place of a signature.

Depending on the bank or the post office from where the form is collected, there may be additional fields for official use (that is for use by bank or post office personnel). Those fields are to be left untouched. Sometimes the officials can actually ask the applicants to fill in some basic information that section and leave the stamp field and signature field empty for the officials.

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How to Close PPF Account Before Maturity?

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Jun 032016
 

How to Close PPF Account Before Maturity?

Yes, we will get to the answer of the question you see in the title but before that, let us get a quick knowledge about PPF. So, what is PPF? It stands for Public Provident Fund. It has a long history but in short – it is a government scheme which focuses on small savings. What do we mean by small savings? It simply means that you can literally save small amounts of money. You don’t need to make big investments. The minimum amount you need to invest in a year is INR 500.

How to Close PPF Account Before Maturity

Now the next logical question that follows is, what is maximum allowed investment in PPF? PPF allows a maximum of INR 1.5 lakhs in a year. Actually more can be invested but tax exemptions can be enjoyed only up to the capped amount of INR 1.5 lakhs. Any investment above that will be taxed.

One of the primary reasons why PPF is extremely popular is that it is very safe. Being a government scheme, the chances of losing the investment money due to bankruptcy is not possible. Well, in extreme situation of complete economic meltdown (economic depression) loss of money may occur.

There are several other benefits too. For instance, a PPF account cannot be liquidated even by a court mandate. Only and only the government has the right to touch the PPF account. So, suppose you take a loan and you default. The lender will never be able to touch your PPF investments even if it tries to get a court order to liquidate all your investments for recovering the loan.

Another amazing benefit is high interest earning. Well, we won’t say that the interest earnings are best in class but they are definitely pretty handsome. To make things better, the money in the PPF account grows at a compounded rate. This means that whatever interest is earned in a year is added to the account balance and then the total balance starts earning interest in the next fiscal year. Isn’t that cool?

You can also take out loans against your PPF investments after a certain number of years at a very low rate of interest. Partial withdrawals are also allowed but subject to conditions. So basically, a PPF account comes with tremendous flexibility and of course financial security during unexpected financial downswings or also during the silver years after retirement.

How to close PPF account before maturity?

Now that we have a general idea of what a PPF account actually does, we can divert our attention to the actually question. How to close PPF account before maturity? Like all investments, PPF also has a maturity period after which the account can be closed and money can be withdrawn. However, when it comes to closing the PPF account before it matures, things become really nasty. There is absolutely no option of doing that unless the account holder suddenly dies! That’s a sad scenario but that is the only option. If the account holder dies before the account matures, the nominee or the legal heir of the account holder gets to close the account prematurely upon submission of necessary documents. Once the documents are verified for accuracy, the account will be closed and funds will be handed over to the nominee or the legal heir.

What if there is no nominee or no legal heir? In such a situation, the nearest kin of the account holder can claim the money subject to proper legal verifications by competent authorities. Upon successful verification, the account will be closed and the money will be handed over to the nearest kin of the deceased person and the account will be closed before maturity.

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Interest to be earned on all inoperative EPF and PPF Accounts

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May 132016
 

Interest to be earned on all inoperative EPF and PPF Accounts

The new financial year comes with good news for all those having an inoperative PF account. From April 1 of this year, all the inoperative PF accounts will be eligible for earning interest on the accumulated amount in their PF accounts. As per the recent announcement of Employment Provident Fund Organization (EPFO) all inoperative EPF accounts will be eligible to get accumulated interest, which will be benefit to many account holders who have an inoperative account due to job switch over.

inoperative PPF and EPF accounts

PF accounts

PF or Provident Fund is a retirement scheme which is available for the individuals who are salaried. It is a scheme that secures the future of all employees across the country. Under this scheme a certain amount of the employee’s salary (12%) is deducted and is contributed to the fund. The employer also contributes the same amount into that fund and then the account earns an interest annually. The PF account is carried forward regardless of your job changes.

Below listed table gives you the answers for doubts which commonly arises among people on EPF/PF 

S.No Question Answers
1 Whether it’s mandatory to have EPF Account? Its mandatory for employees who receives basic salary of Rs.15, 000 and above, and for EPF is optional for employees who get lower basic.
2 Whether there will be benefits on owning EPF Account? Yes! It’s just like an investment, where employees will get accumulated interest on retirements, resignation and for sudden death too
3 What is EPF and PPF? EPF – Employees Provident Fund, applicable only for salaried persons. Meanwhile, PPF – Public Provident Fund, is for long term investment for workers of unorganized sectors and self-employed persons
4 How do I check my EPF balance? Visit www.epfoservices.in where you will get proper details about your EPF status, balance and many other information
5 Is is possible to contribute more on EPF? Yes! One can make additional contribution to his or her EPF account according to their wish. There will be no changes in rules or terms for additional contribution

Inoperative PF account

In general, an EPF account without any contribution for the period of 36 months will be considered as inoperative accounts. And as per the terms of EPFO, all in operative accounts will set under different terms and guidelines. Initially interests were paid even on inoperative accounts, depending on the money accumulated. But then on April 1st, 2011 it was announced that interest will not be paid on these accounts. The ruling party then, UPA had stopped the interest on such accounts as they wanted to discourage parking of funds with the EPFO in these inoperative accounts.

Interest on your inoperative PF accounts

The Central Board of Trustees (CBT), which is the highest decision making body in the EFFO has announced that now they are going for a pro-worker plan and so they will be crediting interest on the inoperative PF accounts as well. According to the head of the CBT, BandaruDattatreya, from now there will be existence of inoperative accounts.

It is estimated that this decision will benefit many people across India. There are said to be more than 9 crore of such account holders having a deposit of approximately 33000 crore.

Recent rule change in the EPF withdrawal and otherwise

Few months back the Ministry of Labor and Employments of India came up with some modification in the rules and regulations relating to the PF accounts. The rules mainly related to the early withdrawals, here are the modifications-

  • As per the old rule, PF Balance can be withdrawn after the unemployed period of 60 days. But now all PF account holder can be withdraw only after his or her retirement age. The withdrawal cannot exceed the amount that the employee has contributed himself and the interest
  • Previously the retirement age was 55 years of the individual but then now the age has been increased to 58 years.
  • In case you resign from your job, still you cannot withdraw the whole money until your retirement age. Previously you could withdraw it.
  • Earlier PF account holder had the option of withdrawing 90% of his PF balance once they get pass 54 years. But now the withdrawing age is revised to 57 years. So salaried person can withdraw his 90% of his or her PF balance only after passing 57 years.

Keeping the above factors in mind, the government has decided that since an employee cannot withdraw the entire amount before the retirement age, which is 57, even though he may be without a job, the government will also do their bit by paying interest for all the inoperative accounts. This will be benefit for all individuals who are jobless and also are not able to withdraw their PF money. So with this decision of the government many employees with have a sigh of relive. Especially the people who are not employed or cannot work but have an inoperative PF account can seek for benefits from this decision.

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  1. List of banks authorized to open PPF accounts online and Offline
  2. PPF Account in PNB 

List of banks authorized to open PPF accounts online and Offline

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Apr 292016
 

List of banks authorized to open PPF accounts online and Offline

PPF or Public Provident Fund is a scheme governed by the Indian Government that offers a bank account which brings forth lucrative interests and returns. Any return or interest payments that occur in this account are fully tax free. Unlike other saving accounts the minimum limit of the PPF account is Rs.500 only which means anyone with as low as 500/- can open the account.

In one financial year you can deposit not-more-than 1, 50, 000/- in this account. However you can easily get a loan or withdrawals against this account. Also the account can be easily opened by a minor as well. It has a lock-in period of 15 years within that period of time you will not be able to draw any money from the account. It is kind of fixed asset with exemption of tax.

List of banks authorized to open PPF accounts

Eligibility

Only an Indian Citizen can open a PPF account. Even if you are a minor, anyone who is your local guardian/legal guardian can open PPF account on your behalf.

List of Banks authorised to open PPF accounts

The account was started with post offices and all nationalised banks. But now you can open a PPF account with private banks as well. The list of authorised banks:

  • State Bank of India
  • State Bank of Patiala
  • State Bank of Bikaner & Jaipur
  • State Bank of Hyderabad
  • State Bank of Travancore
  • State Bank of Mysore
  • Bank of Baroda
  • Bank of India
  • Central Bank of India
  • Canara Bank
  • Oriental Bank of Commerce
  • Bank of Maharashtra
  • Allahabad Bank
  • Corporation Bank
  • Vijaya Bank
  • Andhra Bank
  • Dena Bank
  • Punjab National Bank
  • Indian Overseas Bank
  • Indian Bank
  • United Bank of India
  • UCO Bank
  • Syndicate Bank
  • Union Bank of India
  • Axis Bank
  • Industrial Development Bank of India – IDBI Bank
  • HDFC Bank
  • ICICI Bank

These banks have the authorisation to open or transfer the PPF accounts. But note that all the branches of these mentioned banks do not have authorisation. So it is recommended to check with your nearest branch of your bank whether they have the authority or not.

PPF account Rules

To open a PPF account you need some documents such as a form by your bank branch, your identity proof and address proof and some other documents like photographs and such. To know more about the details of PPF rules and how to open the account, please visit your bank branch or website. Read the rules carefully before you open an account.

Benefits

PPF account backed by Indian Government has the biggest tax benefit. The other benefits are:

  • Simple rules and no such eligibility to open an account
  • High interest rate
  • Lock-in period of 15 years. You cannot withdraw money before that period.
  • No debt-liability, no tax payment
  • The account can be opened for minors as well
  • Risk-free investment
  • Loans and withdrawals are available.
  • Some of the bank branches allow you to link your personal account with your PPF account with the same branch so that you can easily transfer your money.

As a whole:

Rules & Eligibility: Must be Indian citizen
Time Period: 15 years
Interest Rate: 8.1%
Tax: N/A
Minor account: Yes
Minimum Amount: Rs. 500
Maximum Amount: Rs. 1,50,000
Loans & Withdrawals Yes

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Is Joint Account of PPF Possible?

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Apr 182016
 

Is Joint Account of PPF Possible?

Think of tax saving investments and the first thing that comes to mind is Public Provident Fund or PPF. The PPF account allows investments up to 1.5 lakhs however, there is one glitch. The investment will not mature until it attains the age of 15 years. Good news however is that the matured amount becomes tax-free. PPF accounts are government accounts that can be opened directly through post office or from any bank that has be authorized by the government.

Is Joint Account of PPF Possible

Now coming to the question in hand, “is it possible to have a joint PPF account?” The clean and simple answer to this question is NO.

There are several rules and binding on PPF accounts and NO JOINT ACCOUNT is one such rule. There is no exception to this rule and you have to adhere to it. Even if you give a try by some crooked means to get a joint account, you will fail miserably.

Well, this should complete our article right here but as a good gesture, we will let you know some of the basic rules and bindings of PPF account so that you don’t have to hunt for those rules somewhere else.

Here is the hand rules guide for PPF account:

  1. One account per person: This is not a bank account. Banks have the provision for as many accounts as one wants. For PPF one person one account is the ultimate binding.
  2. No joint account: We have already said this. Still, no joint accounts are allowed under any circumstances. Don’t even try.
  3. No PPF account for HUF: Post 2005 a new rule came in where Hindu Undivided Families cannot open a PPF account.
  4. Name change restrictions on PPF account: In case you are thinking of changing your name in your PPF account, you can simply forget it unless you are a woman and you just got married which led to change in your last name or surname or family name.
  5. Loans after 6th year is totally restricted: PPF accounts get to maturity after 15 years. We have a notion that PPF accounts allow loans. Well, that’s true but there is a limitation or restriction. Loans can be taken only between 3rd and 6th. Before 3 years have been completed, no loans and after 6 years have been completed, you can simply forget that loans against PPF deposits even exist. No matter how much you bang your head on wall, loans after 6th year are not allowed.
  6. Second loan only after repayment of first loan: Well, you have the option of taking out loans against your PPF account between 3rd and 6th You can take out multiple loans but there is a rule. A second loan will be granted only and only when you have repaid the first loan in full. If no then, forget about second loan or as a matter of fact, any subsequent loan. Always pay your previous loan in full before applying for a next loan.
  7. Loans are given at 2% interest: Well, 2% interest rate for loan – isn’t that surreal? It is true! All loans you take against your PPF account come against just 2% rate of interest.
  8. 6% interest after 36 months: In case you have taken out a loan and you have not returned it within 36 months from the date of taking out the loan, you are in grave trouble. The interest rate will straight away jump up to 6%. So, make sure that you pay all your loans against PPF within 36 months from the date when loan was approved and disbursed.
  9. PPF account can be maintained post maturity: PPF accounts mature in 15 years but if you wish to continue maintaining your PPF account, you can do so. But be informed, once you decide to continue, you have to keep your account active for next 5 years after which you need to again think whether you want to continue or not. If you want to continue, you have to invest another 5 years of time and so on.
  10. Most maturity, regular yearly contributions can be stopped: In case you decide to continue your PPF account after it becomes mature, you really don’t need to pay the yearly on a regular basis. You can deposit after 3 or 4 years if you want to. Once you invest, you will activate a lock-in period of 5 years. If you want money before you further invest, you can extract 60% of PPF balance before reinvesting and activating new lock-in period of 5 years.
  11. Post maturity lock-in period, money can be withdrawn anytime: PPF accounts are locked in for 15 years. Once the account matures, you get to withdraw your money anytime you want and if you let it sit, it will keep earning interest. However, if you decide to continue in blocks of 5 years, you have to wait for 5 years before you can withdraw.
  12. Courts don’t get access to PPF account: Suppose you have a loan from a bank and you default, the bank has every right to drag you to court and liquidate your assets to recover the loan amount. However, courts can never touch your PPF account. This immunity has been given by Government of India because a PPF account is a social security account. Even in cases of default, your PPF account remains safe and sound. However, government holds the right to deduct taxes from your PPF account if you don’t pay your taxes.
  13. PPF account can be easily transferred: You can transfer your PPF account from post office to a bank or from one bank to another at your whims. There are absolutely no charges for doing so and no bank will every charge you a single penny. However, there is no point transferring PPF account unless seriously required.

Hopefully you will find these rules and bindings useful while making decisions about your PPF account. Remember that it is a social security account and you should be very careful about what you are doing with your money.

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