New Delhi: State Bank of India (SBI), India’s biggest bank by assets and customers, offers the facility of Public Provident Fund (PPF) account among the wide range of other investment options available such as tax savings fixed deposits, recurring deposits. Public provident fund (PPF) investment comes with unique advantages which include the ‘EEE’ status. PPF account is preferred relatively higher as compared to other conventional investment options offering tax savings such as bank fixed deposits (FD), Equity-Linked Savings Scheme (ELSS), national savings certificates (NSC), etc.
Through PPF account investment, tax deduction can be claimed at the time of investment, the interest earned on the principal amount is tax-exempt and the cumulative amount at the time of maturity is also tax-free.
Who can open PPF account with SBI
All the individuals can open a PPF account with State Bank of India (SBI) in their name as well as on behalf of a minor. According to SBI, PPF accounts in the name of Hindu undivided family is not permitted.
SBI PPF account investment & interest rates
A minimum sum of Rs 500 and a maximum of Rs 1.5 lakh can be invested in a PPF account in one go or in a maximum of 12 instalments per year. “The subscriber should not deposit more than Rs.1,50,000 per annum as the excess amount will neither earn any interest nor will be eligible for rebate under Income Tax Act,” SBI said. According to the State Bank of India, the present interest rate offered on PPF deposits is fixed at 8 per cent. The interest offered on PPF investment is calculated on the minimum balance (in PPF account) between 5th day and end of the month and is paid on 31st March every year.
SBI PPF tax savings benefits & investment tenure
Upon investing in a PPF account, an individual is applicable to claim income tax benefits under Section 88 of Income Tax Act under which the interest income is totally exempt from income tax, further, the amount outstanding to the credit is fully exempted from wealth tax also. PPF investment comes with a lock-in period of 15 years and upon maturity, the tenure can be extended up to 5 more years.
Loan against PPF account and withdrawal
Loan against PPF account can be taken as per prescribed guidelines and withdrawals are permitted upon the age of the account and balances as on the specified dates, SBI said.
Nomination & transfer facility
Nomination facility is available in the name of one or more persons. The shares of nominees may also be defined by the subscriber, SBI said, adding, the PPF account can be transferred to other branches/ other banks or Post Offices and vice versa upon request by the subscriber. The service is free of charges.
PPF account premature withdrawal
Premature withdrawal from PPF account is allowed only after completion of five years which is also valid for minor account holders provided “the amount is required for the treatment of serious ailments or life-threatening diseases of the account holder, spouse or dependent children or parents, on production of supporting documents from competent medical authority,” and “the amount is required for higher education of the account holder or the minor account holder, on production of documents and fee bills in confirmation of admission in a recognized institute of higher education in India & abroad,” SBI said further.
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