Process for PPF Payment: Online and Offline
A Public Provident Fund, more commonly known as a PPF, is a low-risk investment option backed by the Government of India. There are various ways you can make online payment for public provident fund. However, before heading straight to the PPF online payment methods, you should know what PPF is.
The Finance Ministry’s National Savings Institute introduced the Public Provident Fund in 1968 to encourage small savings among the masses. This scheme comes under the Exempt-Exempt-Exempt (EEE) tax category. Hence, the investment amount, the maturity value, and the interest earned are all tax-free.
You can avail yourself of this investment scheme through Indian post offices and leading public and private sector banks. A fixed amount of interest is paid by the government every quarter. For the financial year 2022-23, it has been fixed at 7.1%.
Different Methods of Making PPF Payments
There are various ways to make payments towards your PPF account. If you have an account with a public/private sector bank in India, you can make online PPF payments.
This facility, however, is unavailable to those who have their accounts with India Post. In that case, you must make the payment in cash or via cheque. You can also pay through the ECS system. Leading banks in India, such as SBI, HDFC Bank, ICICI Bank, Axis Bank, and Bank of Baroda, have come up with online payment options for PPFs.
Now that you have a brief idea of what a PPF account is, how it works, and some of its benefits, let’s consider the various methods by which you can make offline and online payments to a PPF account.
Also Read: What is PPF – Public Provident Fund
Process for Offline Payment via Cheque/Cash
Making PPF payments via cash/cheque is a convenient payment method. For this purpose, you will need to physically visit your nearest post office or bank and make the payment either via cash or cheque.
The following are the steps you need to follow while making the payment via cash/cheque:
- You must fill out Form B with relevant details and submit the same.
- If you are paying via a bank cheque, you will need to make the cheque in the PPF account holder’s name.
- The cheque should be in the postmaster’s name if you pay via a post office. Besides, the payslip you get must have the PPF account number, the holder’s name, and the name of the concerned post office. In the PPF account, the date of deposit will appear instead of the one on which the cheque has been presented.
- While depositing a check, you need to mention the account holder’s full name.
- You must also make sure to update your PPF passbook regularly.
Process for Online Payment
1. PPF online payment through mobile banking
Mobile banking is a convenient option that helps you make PPF online payments while sitting in the comfort of your home. This method is undoubtedly easier than depositing money via cheques or cash by physically going to the concerned bank or post office.
To make online PPF payments, you need to download the mobile application of the concerned bank. Through this mobile account, you will make your payments. However, you must have your PPF account linked to your savings account. Online payment to a PPF account via mobile banking saves your time too.
2. PPF online payment via NEFT
Another PPF online payment method is National Electronic Fund Transfer or NEFT. This method allows you to transfer money from your savings account to your PPF account. You can avail of this facility for both inter-bank and intra-bank transactions.
3. Public Provident Fund (PPF) online payment via ECS system
Online payments into the PPF account can be made via the Electronic Clearing System (ECS). In this system, a fixed sum of money will be automatically deducted from your savings account and sent to your PPF account periodically.
You can issue standing instructions to the concerned bank for an ECS mandate. To avail of this option, you will have to visit the nearest branch of your bank to activate the same.
ECS also works for both inter and intra-bank transfers. The best part is that this system ensures that you do not forget the PPF payment. The money is transferred to the concerned bank at a fixed date per your instruction.
Public Provident Fund (PPF) Payment Rules
There are certain rules set by the Central government regarding deposits and withdrawals of PPF schemes:
- You must pay a minimum amount of Rs. 500 to retain your PPF account.
- The minimum investment amount to open a PPF account is Rs. 100.
- You can invest a maximum amount of Rs. 1.5 lakhs in one year, either in one go or in instalments
- You can make up to 12 instalments a year into your PPF account.
PPF: Some Important Points Worth Considering
- You are allowed to have only one PPF account in your name.
- Non-resident Indians (NRIs) cannot open a PPF account in India.
- You cannot transfer your PPF account to another person. A nominee is not eligible to continue the Public Provident Fund account in the name of the deceased account holder.
- You can transfer your PPF account from the bank to the post office or another bank or branch.
- With effect from 13th May 2005, only individuals are allowed to open a PPF account. Hindu Undivided Families, Trusts, etc., are not permitted to invest in PPF. However, the accounts opened before 13th May 2005 shall be valid only until maturity.
PPF is one of the best investment schemes and is particularly suited for people who have a low-risk appetite. Its main objective is to provide people with an opportunity to invest for an extended period to create a retirement corpus.
Moreover, employees or self-employed individuals who do not offer or have provident funds should consider investing in this scheme. PPF investment schemes have their share of merits and demerits.
PPF has a higher interest rate than fixed deposits; the minimum investment amount is just Rs. 100, which makes it highly affordable and allows you to enjoy tax benefits. You must remember that it has a fixed maturity period of 15 years. However, you can prematurely withdraw only up to 50% of the balance amount at the end of the 5th year.. Moreover, you can easily pay your PPF instalments through the various methods discussed above.
Learn more about PPF Interest Rate
What are the documents that are required to open a PPF account?
You’ll need the following documents:
1. PPF account opening form
2. Passport size photograph
3. Identity proof
4. Residency proof
5. Nomination form
6. PAN card copy
Can I withdraw my PPF after five years?
Yes, you can withdraw your PPF investment after five years. However, this change has been recently brought about by the Indian government to suit the interests of the investors.
Is it mandatory to submit Aadhaar details to open a PPF account?
No. Submitting your Aadhaar card details is not mandatory while opening a PPF account.
Is it possible for minors to open a PPF account online?
No, a minor cannot open a PPF account online. A PPF account can be opened only by the parents/guardians on behalf of the minor. If both parents are not alive, then grandparents are eligible to open a PPF account on their grandchildren’s behalf.
Can I avail of a loan facility on my PPF investment?
Yes, you can avail of a loan facility on your PPF investment. However, you can use this facility any time after the completion of 2 years from the end of the year in which the account was opened and before the expiry of 5 years.
Do I have to invest the same amount every year in PPF?
Yes, you need to invest a fixed amount every year in PPF. However, you can pay either in instalments or lump sum. However, the maximum number of deposits allowed is 12, and you can only invest up to twice every month.
How much will I get after 15 years in PPF?
The current interest rate of PPF is 7.1%, compounded quarterly. If you invest ₹1,50,000 in PPF every year, you will receive ₹ 4,068,208 on maturity at the prevailing interest rates.
Can PPF be paid monthly?
Yes, you can invest monthly in PPF.
How much will I get if I invest ₹5,000 per month in PPF?
If you invest ₹ 5000 every month in PPF, on maturity, after 15 years, you will receive ₹ 1,627,283 at the prevailing interest rate of 7.1%.
Can I deposit 1.5 lakh in PPF at one time?
Yes, you can invest ₹1,50,000 per annum in PPF at once.