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Introduction

One of the most prominent savings schemes offered by Bank of India is the PPF scheme which was introduced by the Government of India in the year 1968 and is governed by the National Savings Institute of the Ministry of Finance. PPF was mainly introduced as an incentive to cultivate the habit of savings among the citizens at the same time helps them in creating a sufficient corpus fund that will aid them in their retirement. The PPF scheme is also often used as a tax savings tool by the public.

The PPF accounts of the bank are currently regulated as per the Public Provident Fund Scheme 2019 and rules and guidelines available there under.

Eligibility Criteria to Open a PPF Account

The PPF scheme is available to all the citizens of the country as well as NRIs in certain cases. The key points pertaining to eligibility under PPF are mentioned below.

  • There is no minimum or maximum age criterion under PPF.
  • The resident Indians are eligible for investment under PPF accounts.
  • PAN card details are mandatory for opening a PPF account.
  • The investment can also be done by eligible individuals on behalf of minors or persons of unsound mind.
  • Such investment can be done by the parents or grandparents (or guardians in their absence).
  • The parents can open only one PPF account in the name of their minor child and such investment will be clubbed with the investment of such parents in order to determine the maximum limit of investment by the parent.
  • The scheme also does not permit joint holding of PPF accounts.
  • HUFs and NRIs are not allowed to open a PPF account.

Features and Benefits of BOI PPF account

The PPF account of the BOI is governed by the PPF Scheme 2019 which has a few additional updated and revised features and benefits apart from the traditional ones. The detailed list of such features and benefits is provided here.

  • All the branches of the bank are eligible for opening a PPF account.
  • The tenure of the PPF account available is 15 years. 
  • An investor is allowed the extension of his/her PPF account for one or more blocks of 5 years multiple times. Such extension can be availed within 1 year from the date of maturity.
  • The minimum contribution to be made each year is Rs. 500 in the multiples of Rs. 50. The maximum contribution that can be made each year is Rs. 1,50,000.
  • Such contributions can be made each year in a single lump sum payment or in monthly installments.
  • There are restrictions placed with regards to such monthly installments that state that a person cannot make more than 2 installments per month and not more than 12 installments in any particular year.
  • Any contribution made beyond Rs. 1,50,000 in any year is not eligible for any interest or tax benefits.
  • The rate of interest is determined b y the government on a quarterly basis. The current rate of interest offered on BOI PPF accounts is 7.9% per annum.
  • Such interest is calculated on the minimum balance available in the investor’s PPF account between the 5th and the last day of the month. The interest so calculated is paid on the 31st March of every year that the investment is held and thereby compounded annually.
  • The interest is eligible for tax exemption and the investment in PPF is eligible for Tax deduction under section 80C of the Income Tax Act, 1961 up to Rs. 1,50,000.
  • The investor can also file for nomination under the PPF scheme by submitting a Form E in this regard.
  • The bank allows nomination of one or more persons up to a maximum of 4 under the PPF scheme offered by the bank. The investor can also define the shares of each of such nominees.
  • The scheme also allows a change in the nomination as well as change in percentage of share of the nominees.
  • In the event of death of the investor, the bank can repay the amount in the PPF account to his/her nominee or the legal heir before the PPF account reaches maturity.
  • The bank provides the facility of loans and withdrawals against the PPF account of the investors. The limit or extent of such loans and withdrawals is determined up on the age of the account i.e. the duration for which it is held and the amount available in the account.
  • Loans can be availed after the completion of 3rd year but not after the completion of 5th year.
  • Withdrawals from the account can be done only once in any year after the completion of 5 years from the date of opening the account. The PPF account also cannot be closed in such a case.
  • The maximum amount of withdrawal allowed to the PPF account holder is up to 50% of the balance that is available at the end of the 4th year immediately preceding the year of withdrawal or at the end of the preceding year whichever is lower.
  • The bank also facilitates the transfer of the PPF account to any of the other branches of the bank or any other bank or any of the post offices across the country as well as transfer from any such avenues up on a written request from the investor.
  • If a person becomes an NRI post opening an account under the PPF scheme, such person can close the account prematurely i.e. before the completion of the term of 15 years by submitting the copy of his/her passport and visa or a copy of the Income Tax Return of such person.
  • The above rule is applicable only to those accounts that are opened after 12th December 2019.
  • The rate of interest applicable on such accounts is one percent lower than the normal applicable rate of interest on other PPF accounts.
  • A person can hold the PPF account even beyond maturity i.e. after the completion of the tenure of 15 years.
  • Such an account will be eligible to avail interest at the prevailing rate of interest.

Documents required for opening a PPF account

The documents required to open a PPF account with the bank are,

  • Completed and signed Form A
  • Duly filled pay-in Slip Form B
  • Nomination Form E duly filled and signed
  • Identity Proof (Aadhaar Card, PAN Card, Voter’s ID, etc.)
  • Address Proof (Aadhaar Card, Electricity Bill, Water bill, Gas bill, etc.)
  • Recent passport size photographs

Process to open a PPF account in Bank of India

The bank has two modes of opening a PPF account with the bank which is a physical mode and a virtual or online mode.

Physical mode of opening an account – 

A person can open a PPF account in Bank of India by physically visiting any of the nearest branches. The customer is required to fill in the following forms,

  • Forms A (application Form)
  • Form B (Pay-in Slip)
  • Form E (Nomination form) 

The applicant is required to submit the above forms along with the necessary KYC documents as required by the bank and complete the verification process in order to complete the process of opening the account.

Online mode of opening a PPF account – 

The online procedure available with the bank is for the existing customers of the bank. The investor will have to physically visit the branch of the bank for submitting the required KYC documents and for the verification process in order to complete the process of opening the account.

The information on procedure to open a PPF account online is given below.

  • An investor can open a PPF account online by having access to the bank’s Net Banking facility.
  • The user has to input the User ID and password generated from the Net Banking portal log in and initiate the process of opening the PPF account.
  • Thereafter, the user is required to click on the link available for the application of a new PPF account.
  • The user has to fill in his/her basic details as well as minor’s details (if the account is opened on behalf of a minor), etc.
  • Another mandatory requirement is the details of the branch code of the bank where the PPF account is required to be opened.
  • The user is next asked the details of the nominee/(s). Such details will be verified including the address details after which the user can proceed.
  • Post submitting all the details, the PPF account is created and the user will receive the PPF account number which will be displayed at the user’s Net banking portal.
  • The user will have to download and print the application form and duly submit it along with the necessary KYC documents to the bank’s branch within 30 days from the date of filling the above form.

The applicant has to pay a minimum initial amount of Rs. 500 to open the PPF account. Such amount can be paid in cash or cheque or demand draft or via online transfer as per the convenience of the applicant.

Withdrawal from PPF Account

In any general case, the scheme allows the investor to withdraw any amount from the PPF account only after the maturity of the account i.e. after the completion of 15 years.

The investor can withdraw the amount accumulated over the tenure of the account along with the interest accrued without any tax implications if such withdrawal is post maturity of the account. The entire corpus fund at such time is eligible for tax exemption under the provisions of the Income Tax Act, 1961.

An investor is, however, allowed to withdraw from his/her PPF account before the completion of the tenure of the account subject to certain restrictions. Such partial withdrawal is allowed from the PPF account only after the 7th year. Another condition to such premature withdrawals from the PPF account is that the maximum amount of withdrawal cannot exceed beyond 50% of the balance available under the PPF account at the end of 4th year.

Early withdrawal from the PPF account is permitted only under certain circumstances such as,

  • Expenses for treatment of life threatening diseases for the family members of the investor (parents, spouse or children). The investor has to provide supporting documents like medical reports from a competent medical authority in this regard.
  • Expenses related to the education of the account holder or a minor account holder. The supporting documents that the investor has to provide in this regard are the proof of admission fees from a recognized university.
  • An NRI holding a PPF account before becoming one can close the PPF account by submitting the copy of his/her passport and visa along with the income tax return.

Contact details of BOI

The investors can contact the bank via the following means,

   Star House, 

   C-5, “G” Block,

   Bandra Kurla Complex

   Bandra (East)

   Mumbai – 400051

Phone – 022 - 66684444

FAQs: Bank of India PPF Account

1. What is the number of installments that a person can make during a year?

An investor is allowed to make a maximum of 12 installments as contributions towards his/her PPF account.

2. Can an investor request for assistance from the bank regarding any query related to his/her PPF account?

An investor can contact the bank at the available customer care channels to get any assistance or any information required pertaining to his/her PPF accounts.

3. Can a person hold the PPF account even after its maturity?

Yes an investor is allowed to hold or retain the PPF account post its maturity even without any contribution.

4. What is the extension period of the PPF account allowed to an investor?

An investor can extend the PPF account beyond its maturity for blocks of 5 years each up on submitting an application for the same in Form H.

5. What is the form number for premature closure of the account?

A person can close his/her account prematurely by submitting an application for the same via Form 5 available at the bank’s website.

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