Outside FDs, PPF is probably the most popular investment vehicle for saving taxes.
But, till recently, it wasn't that convenient to make use of this vehicle. You could only open an account up in a post office and had to visit physically to deposit money in it.
Fortunately, things have changed and now many top banks now offer easy and convenient PPF investments.
And amongst these banks, State Bank of India is probably the most popular choice. It's the one with the highest reach and was the first bank to be approved to open up PPFs on the Government's behalf, back in 2011.
In this guide, I will walk you through the exact process of opening and operating your PPF in any SBI branch. I will also cover what to do if you already have an PPF in a post office...
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By the way, if you are not sure about whether PPF is a right fit for you or not, look at our detailed PPF guide
How to open a new PPF account in SBI
Step 1: Choose the appropriate SBI branch
First thing you have to note is that not all SBI branches are authorized to open a new PPF. So, you may not be able to host it in the same branch that has your savings account.
This doesn't mean that you won't be able to visit your neighbourhood branch to open your PPF account.
All branches, even if they are not authorized, will accept the PPF application form and will forward same to one of the approved branches.
For this reason, you should choose a branch that's closest to your home as you will have to make at least one visit to open this account.
To find your nearest SBI branch, you can use the SBI branch locator tool
Note that even if your branch that you are visiting and the branch that hosts your PPF are different, it should not be much of an issue.
Cross branch transfers and linking of PPF to your savings account is very easy these days. Further, you can invest or get your passbook updated in any SBI branch with equal ease, regardless of whether they are authorized or not.
Net net, choose a branch that's closer to your home.
Step 2: Fill Account Opening Form to open a Savings Account
Once you have figured out which is your nearest branch, visit same and ask for an Account Opening Form for Public Provident Fund.
This form is called Form A. You can also download this form here. The nomination form is available here.
Alternatively, you can also visit SBI's forms section to download all these forms.
Please note that if even if your bank allows you to initiate the application online, you will still have to make at least one visit to the branch in person.
When you visit, following set of documents will be needed:
- Form A (PPF account opening form)
- Form E (Nomination Form)
- 2 Passport sized photos
- Copy of PAN card/Form60-61
- ID proof and the residence proof as per SBI's KYC norms
Carry your originals alongside you when you visit the branch for verification.
You are not required to open a savings account in the same bank to host a PPF with them. But in practice, some branches may insist on this. In case you want to open a new savings account as well, you can start the application process here.
Step 3. Collect your PPF Passbook
Once your provident fund account is opened, you will be issued a passbook. Typically, it will take upto two days for you to get it but some branches may be faster.
This passbook has the start date as well as the maturity date of your account. It also serves as a record of your transactions that you have done.
The interest on public provident funds is accrued annually. So, if you get your passbook updated at least once an year, you will be able to see your exact investment value as well.
How to transfer an Existing PPF account from a Post Office to SBI
If you already have a PPF in a post office, you probably know that it's not very convenient to operate. You may want to open a new one in a bank branch. However, that's not allowed and you can't just open a new PPF in SBI while retaining the old one in post office.
Rather, you will have to get your account transferred to your desired SBI branch.
To do this, you will have to submit a transfer application along with Form SB-10b to the head postmaster and provide identity proofs as required.
Head postmaster will review your application and once it's approved, your original documents, including the certified copy of the account, the account opening form, the nomination form and the specimen signature will be sent to the SBI branch address mentioned in your application.
Alongside these documents, a Cheque or a Demand Draft of your exact balance as of then will be sent as well. Once SBI branch gets these documents, they will ask you to submit a fresh PPF account opening form and a nomination form alongside a fresh set of KYC documents. You will also need to deposit your original passbook.
This account will be treated as a continuing account so your original maturity date will stay the same. However, the new passbook that you will be issued will only have transactions that happen in SBI branch. Retain the photocopy of earlier passbook to maintain a record of earlier transactions.
This entire process will take anywhere from 15 days to 4 weeks. Continuously followup with post office and SBI branch to speed it up.
How to invest in a PPF account in SBI
Now that you have your PPF account ready, you may want to know the how to go about making investments in same.
The first thing you should note is the minimum and the maximum limits that the Government has defined for public provident fund. You can invest a minimum of INR 500 and a maximum of INR 150k in any financial year.
Also, while you can invest at anytime, the maximum number of investments in any given year can not cross 12. You can use these 12 investments in one single quarter or spread them through out the year.
With that in mind, there are three different channels when it comes to these investments:
Invest Online
For most banks, you may make PPF investments through your netbanking facility. SBI is no different. [Refer: how to make online investments in PPF]
If your savings and PPF accounts are already linked, you can simply transfer the requisite amount from your savings account. Even if they are not linked, you can simply add your PPF as a third party beneficiary and do the transfers through internet banking.
This process is exactly like you do any other online transfer and there is no difference as such.
Your PPF account number will be the account to which you will make the transfer to while the Payee name will be exactly same as your name on PPF account.
Don't use initials in payee information if you haven't used same in your PPF account and vice-versa. The name has to be the exact match.
Invest Offline by visiting the SBI branch
You can also visit SBI branch physically to make your investments. You will be required to fill the pay-in or the deposit slip for the exact investment you want to make in PPF, alongside cash or cheque for the requisite amount.
PPF deposit slip is different from the normal deposit slip. It has 3 copies of the deposit form, one for agent, second for bank and third for you. You will need the customer copy to claim the tax deduction under section 80C.
You can download the SBI PPF deposit slip here.
In case, you are making your investment through account payee cheque, your investment date will be from the date of cheque clearing while the cash contributions will be recorded on the same date.
This is important as ideally you should make your contributions before the 5th of each month, as balance till that date is taken into account for interest calculation.
Investment through Auto-debit Or ECS
The last option you have is to make use of auto-debit facility your bank account provides. You can provide a standing instruction and the requisite investment amount will be auto-deducted at regular intervals from your bank account.
To do this, you will be required to fill an ECS form at your bank branch. This form should mention the amount to be deducted and the intervals at which it should be deducted.
Some Common Questions
How to close an SBI PPF?
Your investment will mature in 15 years from the date of opening up your account. Once it matures, you will be able to close your account and get your investment back.
You have an option for a premature withdrawal of your investment amount, but no option to close the account completely.
Do I have to close my account necessarily once it matures?
No, you don't have to. You can make use of extension option and extend your account by 5 years at a time.
Do I have to visit the PPF authorized SBI branch only?
No, it's not required now.
You can visit any SBI branch and they will take care of paper work automatically. This includes opening your PPF account or making investments in same or getting your passbook updated. However, if you have a specific branch in mind, mention same on Form A.
Please note that your account will still be opened in a PPF authorized branch only, just that you will be able to operate it from any SBI branch.
Can I make the PPF investment from another bank account?
Yes, you can do an online transfer from any bank or any branch. The process is exactly same as any standard online transfer. You can also make use of ECS mandate to make these investments quite easily.
This is it on this topic. Let me know if you have a question.
