Public Provident Fund has been a darling of long term investors for a long time. And that's for a good reason...
PPF is amongst very few investment options that are truly exempt exempt exempt i.e. the initial deposit, interest and the final maturity amount, all three are completely free of any tax liabilities. Also, PPF is as risk free as it gets as it's backed by the sovereign guarantee. Further, PPF returns and interest rates are amongst the highest in fixed income category.
Combine these three factors and no wonder that PPF is as popular as it is.
Now, when it comes to opening a new PPF account, the first place that probably pops up in your head is your local post office... or quite possibly, 'State Bank of India'.
No surprise there to be honest, as for the longest time, these were the only places to get a PPF account from.
Thankfully, things have changed...
More...
Off late, a whole lot of new banks have been authorized to offer PPF facility. In fact, on last count, there were 23 banks now authorized to open these accounts.
Most big names are now part of this list as are many mid-sized ones. Here is the complete list:
List of banks offering PPF account opening facility
- ICICI Bank
- HDFC Bank
- Axis Bank
- State Bank of India
- Allahabad Bank
- Andhra Bank
- Bank of India
- Bank of Maharashtra
- Bank of Baroda
- Central Bank of India
- Canara Bank
- Corporation Bank
- Dena Bank
- Indian Bank
- IDBI Bank
- Indian Overseas Bank
- Oriental Bank of Commerce
- Punjab National Bank
- Punjab and Sind Bank
- Union Bank of India
- UCO Bank
- United Bank of India
- Vijaya Bank
Please note that the erst while State Bank of Hyderabad, State Bank of Patiala, State Bank of Bikaner, State Bank of Jaipur, State Bank of Travancore and State Bank of Mysore have now been subsumed into SBI and have been counted under SBI umbrella in the list above.
As you may have noticed already, most of the banks in the list above are PSUs but the big three private sector banks - ICICI, HDFC, Axis - are part of this list too.
Please note that only designated branches of these 23 banks (and not all their branches) are allowed to open PPF funds. So if you are planning to go to the bank branch and get your account opened, call them first and check if the branch is allowed to open a PPF account.
Alternatively, you can check your bank's website to get a list of authorized branches e.g. for ICICI bank, you can check the list of authorized PPF branches here.
Once you have decided which bank to have your PPF account with, next piece of the puzzle is the ease of operation and ease of depositing money in that account.
There are essentially two methods:
- You can simply visit your bank branch, fill in a payslip and deposit an account payee cheque. Depending upon how busy your bank branch is, this can be a bit painful as you may have to stand in long queues.
- Or you can do online fund transfers. If your netbanking is enabled, you can login and transfer the desired amount to your PPF account. All you need to have is your PPF number and Payee name.
However...
...not all banks offer online fund transfers.
In fact, if you are opening up your PPF account for the very first time, choose your bank carefully and make sure that it offers online fund transfer facility. It will be much more convenient than having to visit the bank everytime you want to make a deposit.
For a quick reference, here is the list of major banks who offer online transfers to PPF account:
Banks offering online fund transfers to PPF accounts
- State Bank of India
- ICICI Bank
- Axis Bank
- HDFC Bank
- State Bank of Hyderabad
- State Bank of Patiala
- State Bank of Travancore
- State Bank of Mysore
- Allahabad Bank
- Canara Bank
- Central Bank of India
- IDBI
- Bank of India
In case, you have an existing PPF account that doesn't already offer online fund transfers, you are stuck a bit. You can't open up a second PPF account and only choice you have is to transfer your PPF account to a bank that offers online transfer facility.
You will need to submit a transfer request form along side requisite documents and identity proofs to initiate the this process. Once your request is reviewed, your original PPF documents (certified copy of the account, account opening application form, specimen signature and nomination form) as well as a DD/Cheque of your outstanding balance will be sent to the bank branch where you want to open up your new PPF account.
Once these documents are received, you will be asked to submit a fresh PPF account opening form alongside your KYC documents.
Your existing balance will be updated in your new account and this account will be treated as a continuing account. Your passbook, though, will not have any old entries and only future transactions will get recorded.
Can you open a PPF account completely online without visiting your bank?
Yes and No...
Your bank may offer and advertise an online PPF account opening facility, but you will still need to visit the branch for verification and/or to deposit the physical documents.
How the exact process works is that you:
- fill the requisite details in PPF account opening section on your bank website. You will fill Form A online.
- take a print out of this filled-in form, put your signatures and affix a recent photograph
- submit the complete form at the branch alongside your PAN number as well as identify and residence proofs
Once these documents are verified and found satisfactory, your PPF account will be activated.
If you open your PPF account online, by default, you won't be issued a physical passbook.
But you will be able to see all your transactions through net banking. If you do want a physical passbook, submit a request at the designated branch.
Once you have ensured that your PPF account is with a bank that allows online transfers, next step is to actually make this online deposit.
There are two possible scenarios:
Scenario 1: Your PPF account and savings account are at different banks
In this case, you will need to add your PPF account as a 'third party beneficiary'. The payee name is same as your name in PPF account and payee account number is same as your PPF account number.
Once you have successfully added the payee, you can transfer the funds using internet banking like you normally do.
Scenario 2 : Your PPF account and Savings account both are in the same bank and are linked together
In this case, transferring funds is extremely easy as you can directly transfer money from your bank account without adding your PPF account as a third party beneficiary.
For above to be possible, however, both your accounts should be linked. If they are not linked, you can contact customer care.
Or alternatively, you can operate them as separate accounts and transfer funds by adding PPF account as third party beneficiary.
Most banks will also allow you to setup a standing instruction to periodically credit your PPF account if your accounts are linked. If your accounts are not linked, you can make use of an ECS mandate.
All in all, PPF is a great investment option but not all places offer the same level of convenience. So you should be careful of where you open up your new PPF account.
I hope that this list of banks offering PPF accounts and online fund transfers has answered some of your questions.
But, if you have any more doubts, let me know...
