Aug 222016

All About PPF Account Form E (Nomination Form)

What is PPF? Why should you invest in it? What are the benefits of investing in PPF? What kind of interest earnings are to be expected from PPF? How many times have you asked the above questions? Perhaps a hundred times or more! The reason for asking these questions is simple. You want your money to safe because earning money is not easy but it can be lost in a blink of an eye. It is because of this reason you want to ensure that your investments are safe and they offer proper returns that are satisfactory.

As far as the aforementioned questions are concerned, let us pick them up one by one and answer them. Once we are done answering those question, we will take a detailed look at Form E associated with a PPF account. That sounds okay? If so, let us begin!

What is PPF? PPF stands for Public Provident Fund – a small investment scheme that was launched by central government of India a long time back. It is referred to as a small investment scheme because a person investing in PPF is not required to invest large sums of money. A person can invest INR 500 in a year and keep the account open and running. Just like a floor has been set for minimum yearly investment, there is a ceiling for maximum yearly investment too. A person is not allowed to invest any more that INR 150,000 in a given financial year.

Why should you invest in PPF? Security of an investment you make should be your paramount concern. Let us take it this way – you bought a car. Will you ever want it to be stolen or damaged? No, you won’t! You will want your investment, i.e. the car to stay safe and hence, you will buy a car insurance to safeguard it against perils like theft or accidental damage. You will place it in a garage behind locked doors when not in use and so on… so, you will basically want to keep your investment safe. The same applies for financial investments where investments and returns are both in cash. PPF is one such investment. Luckily, it is extremely safe. Since the scheme is a government scheme, it has no risk of bankruptcy. Governments don’t go bankrupt that easily. At least in independent India, there has not been any instance of government bankruptcy till date. So, all the money you invest in PPF is safe.

What are the benefits of investing in PPF? Not one, not two… there are actually several benefits of investing in a PPF account. Apart from the security side, here is a quick list of other benefits you can enjoy once you open a PPF account:

  • It acts as a retirement fund or corpus.
  • It cannot be liquidated even with a court mandate.
  • It allows taking out loans against the fund in account at extremely low interest rates.
  • It allows partial withdrawal.
  • Investments are not taxed under income tax provisions.
  • The interest earnings by the deposited funds are not taxed either.
  • Has amazing flexibility when it comes to investment modes – cash, check, DD, electronic funds transfer etc. are all available.
  • It can be opened through a bank or a post office, whichever is preferred by the investor.
  • Small investments ensure that there are no defaults in yearly investments.
  • In case a PPF account becomes inactive because minimum annual investment was not met, the account can be easily revived.
  • Allows nomination.
  • Allows opening an account in name of a minor.

What kind of interest earnings are to be expected from a PPF account? Now this is a bit of a tricky question. It was easier to say this earlier because the government used to announce the annual interest rate at the very beginning of a fiscal year. As of today, small investment schemes including PPF operate on flexible interest rates. This means that the interest will be determined by the market. Put in other words, PPF is now market-linked. However, the government will still keep the interest rate fixed for every quarter of a fiscal year instead of allowing daily adjustments.

Now that we have covered some of the basics of PPF, let us take a look at Form E of PPF. Remember that we mentioned about nominations? That’s one of the benefits but for nomination to work, you will have to fill up a form. Let us now take a detailed look at the form itself.

All about PPF Form E

The PPF Form E has 7 sections out of which, you will have to work on 6 of them while the 7th option is meant for official use. Official use means that either the bank officials or the post office officials will fill up the 7th section of the form. Now let us take a look at each element of the form in a tabular format for easy understanding.

Form Element Description if required
A declaration This is where you will have to declare that you (your name has to be provided) are appointing nominee(s) who will get money in the PPF account no. (the account number is to be provided) in the event of your death before the term of the PPF account is completed. Just in case you are not aware, a PPF account has a term of 15 years.
Nominees In this section you have to give the name, address and the proportion of the accumulated fund a nominee should get in case you select multiple nominees.
In case you are appointing a minor as a nominee, you will also have to mention the date of birth of the minor nominee.
You are free to select multiple minor nominees.
Even if you are selecting minor(s) as nominee(s), you will have to mention the proportion of the fund the minor(s) should get.
Fund transfer to minor nominee(s) This is where you need to declare that if you die before the PPF account matures and the minor nominee(s) are still minor, the money allocated for the nominee(s) is to be given to an appointed guardian whose name and address are to be provided in the space allocated on the form.
Witness details The nomination declaration is to be done in presence of a two witnesses (though not mandatory). In case you are using witnesses, you need to give the names and addresses of the two witnesses. Two witnesses also need to provide their signatures in the approprite fields.
Subscriber signature This is where you will have to provide your signature. You can also give your thumb impression (usually thumb impression is for those who cannot read or write).
Date Of course, you need to provide the date on which you are making the nomination selection.
For official use As we said earlier, there is a section for official use. This is where the bank or post office official needs to declare that the nominations have been registered on the specified date (the date has to be given) and the appropriate entries have been made in PPF passbook along with nomination number (this number is to be provided by the official). Finally the official has to provide his or her signature and date.

That is pretty much everything about PPF Form E. If you have any query, feel free to drop a comment. We will revert back to you as soon as possible.

You can get SBI ppf form e Form this link.

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