Public Provident Fund is a long-term savings scheme operated by the National Savings Institute under the Department of Economic Affairs, Ministry of Finance. It was launched in 1968 to help Indians invest in exchange for higher returns.
As of January 2020, the rate of interest offered in PPF accounts is 7.90%. Since, 2016, the rates are revised on a quarterly basis.
One of the benefits of PPF is that anyone, even minors, can open an account. Individuals can open a PF account from any commercial financial institution or post office.
Steps to open PF account online
PPF accounts can be opened both online and offline with a financial institution. The online process is, however, more convenient and can be done in simple steps hassle-free.
To open a PF account, you should have the following:
– A savings account with any of the financial institutions.
– Activated net-banking or mobile banking for that specific account.
– Aadhaar number linked with the account.
– Mobile-linked Aadhaar number.
The steps to open an online account are discussed below –
Step 1: Sign in to the net banking portal of your financial institution.
Step 2: Click on ‘Public Provident Fund’ under the section for accounts.
Step 3: Details will be displayed based on your account, and you have to confirm the same.
Step 4: Enter the amount you wish to deposit.
Step 5: In case you want to add a nominee for the account, mention the relevant details.
Step 6: Since your Aadhaar ID is linked to your registered mobile number, you will receive a message about your account opening, which might take another day.
The process of opening a PPF account is thus complete. Nonetheless, ensure all the details that you enter are valid and updated.
You can also access PF account all the details like account summary from the website and do away with the hassle of visiting any brick and mortar institutions.
Steps to open PF account offline
If you still want to open account offline, you can follow the steps below:
Step 1: Visit your nearest financial institution or post office and avail the PPF application form.
Step 2: Fill up the application form with relevant details and attach your KYC documents as asked.
Step 3: Submit both the form and documents to the official.
After that, you will be provided with a passbook from which you can access all the necessary details such as – PPF account holder, account number, nominee, branch name, etc.
Opening a PPF account requires an individual to be aware of specific prerequisites to understand how yield matters in long term investments. In either process of opening account, you have to make an initial deposit of at least Rs.500. In case you are looking to invest more, the highest limit of deposit for a year is fixed at Rs.1.5 Lakh.
As convenient saving options, you always look for ways to maximise your earnings over time. In this regard, fixed deposits are an effective option to maximise your investment both in the short term as well as long term. Although both FD and PPF are conventional investment alternatives, each has its unique set of advantages one can opt for, based on their suitability.
You can earn an interest of up to 8.10% and an additional 0.25% for senior citizens on investing with reputed financial institutions like Bajaj Finance. Above all, you can be financially independent with the Bajaj Finance Fixed Deposit, as it enables you to grow your money easily along with flexibility in case of emergency requirements not requiring you to break your other savings or opt for a loan.
The minimum amount for FD is Rs.25,000 with NBFCs with no ceiling. On the other hand, PPF account puts a cap on the higher limit of investment which is Rs.1.5 Lakh per year.
Nevertheless, it is the investor’s needs which to make plans about investing and maximising the earnings through a more extended lock-in period as in PF account or a shorter one as in FD.
