How To Open A PPF Account Online In HDFC Bank?

Among debt investments, Public Provident Fund (PPF) is one of the most popular small savings schemes. It is a long-term scheme that not only offers tax benefits but also high and stable returns. PPF is a risk-free investment option because it is regulated by the Ministry of Finance, Government of India. Opening a PPF account is quite easy nowadays, as one can open an account either offline or online with some of India's reputed banks such as SBI, HDFC, ICICI and Axis Bank. Here, we've used HDFC Bank as an example to explain how to register a PPF account online with India's largest private sector bank.

Eligibility required to open a PPF account with HDFC Bank

An individual must meet all of the criteria for eligibility given below in order to open a PPF account.

He or she should be a resident Indian

Must have a minimum age limit of 18

An individual can only open one account on behalf of his or her name either in a post office or in a designated bank.

An individual can open a PPF account either in his own name or on behalf of a minor/person of unsound mind.

Documents required to open a PPF account online in HDFC Bank

After meeting the eligibility criteria, the customers should keep the below-listed documents ready for successful account opening process.

Basic KYC documents like Aadhaar, PAN Card, Driving License or Voter ID Card

Passport-size photograph of the applicant

Self-attested Form A or the PPF account opening form

Self-attested Form E for nomination

Valid residence proof like phone/electricity/water bill, etc.

A parent or guardian's photograph and KYC documents are required for minor PPF accounts.

Bank passbook or account statement

Key points to remember while opening a PPF account with HDFC Bank

Before opening a PPF account with HDFC Bank, here are some important points that should be considered.

You should be a customer of HDFC Bank with an active savings account.

Your savings account must be enabled with net banking and mobile banking services of HDFC Bank.

Your mobile should be linked with your Aadhaar for generating OTP and e-sign/ e-authorise your PPF account.

Your savings account should be registered with your mobile number and email ID to get alerts related to your PPF account.

For Q1FY24, the government has kept the PPF interest rate stable at 7.1 % per annum (compounded yearly).

How to open a PPF account with HDFC Bank mobile banking?

Opening of a PPF account in HDFC Bank can be done from the comfort of your home with a stable internet connection and keeping all documents ready. Follow the steps below to complete the process in a matter of seconds.

If you registered as a mobile banking or net banking user of HDFC Bank then open the HDFC Bank app on your mobile phone.

Login to your account using the required credentials and tap on 'Save' on the homepage section.

Now go to the 'Accounts' section and then tap on 'Open PPF Account'.

Now your screen will appear with a question asking 'Do you have a PPF account with any other bank or post office? Tap on 'No' and then 'Continue'.

Under the 'Step 1- Set-up PPF Account' page, select your state and branch.

Enter the minimum deposit amount that will range from Rs 500 to Rs 1.5 lakh per annum.

Click on 'Continue'.

Now you will be redirected to the 'Step 2- Add Nominee' page where you need to declare your nomination.

Once done, click on 'Continue' and confirm the entered details.

You will now get an OTP on your registered mobile number, verify the OTP and click on Submit.

Upon succesfull verification, you will get a confirmation of account opening message on your registered email or mobile number.

How to open a PPF account with HDFC Bank net banking?

You may open a PPF Account online at any time if you're a customer of HDFC Bank. Here is a step-by-step guide to complete the process in a paperless manner.

Login to HDFC Bank NetBanking using your ID and Password.

Go to the 'Offers' tab and click on the 'Public Provident Fund' option.

On the next page, enter the required details such as bank branch, state etc and confirm the same.

Enter the deposit amount and add nominee.

Once done, click on 'Submit' and you will get a successful message on your Aadhaar-linked mobile number.

You can transfer money from your Savings Account instantly to your PPF Account after your account is successfully created with HDFC Bank.

PPF Deposit Rules

A single individual can deposit up to Rs. 1.50 lakh in a PPF account, with a minimum deposit of Rs. 500 every financial year. Amounts up to Rs. 1.50 lakh can be deposited in any number of payments over the course of a fiscal year. Section 80C of the Income Tax Act allows tax deductions for contributions made to PPF.

Raghuram Alukur Trikutam, CEO, Descrypt said "PPF deposits are pretty easy. You can go to your nearest post office or a bank branch and ask for opening a PPF account. One can start with something as small as INR500 to a max annual deposit of INR 1.5L. PPF accounts are also easily transferable across regions."

"The minimum deposit required to maintain a PPF account is Rs. 500 per year, while the maximum limit is Rs. 1.5 lakh per year. Deposits can be made in installments throughout the year, with a maximum of 12 deposits per year and it's crucial to contribute regularly to maximize the benefits and ensure the account remains active.

Additionally, interests earned from PPF deposits are tax-free, while wealth tax is not applicable on PPF accounts and proceeds. Therefore, PPF accounts offer triple exemption benefits - deduction on deposits, tax-free returns and no wealth tax," said Avinash Shekhar, Founder & CEO, TaxNodes.

Tax Benefits On PPF

PPF is only the debt product that comes with EEE - Exempt Exempt Exempt category. This means contributions made towards PPF are eligible for tax deductions under Section 80C up to Rs 1.5 lakh per annum, the annual interest earned is exempt from tax and accumulated corpus after maturity is also exempt from taxation.

Raghuram Alukur Trikutam, CEO, Descrypt said "From a tax exemption perspective, it comes under the 80C Act which has an overall limit of INR 1.5L. And the best part is that interest that you gain from a PPF investment is tax-free and compounds on a yearly basis! PPF over the past 3 years has also offered a CAGR of 10.81%."

"Contributions made to the Public Provident Fund (PPF) account are eligible for tax deductions under Section 80C of the Income Tax Act, 1961. The PPF currently offers an interest rate of 7.1% per annum, compounded annually. The interest earned and the maturity amount are also exempt from tax, making it a tax-efficient investment option," said Avinash Shekhar, Founder & CEO, TaxNodes.

PPF Withdrawal

After five years, except the year the account was opened, a subscriber can make one withdrawal every financial period. A withdrawal of up to 50% of the amount is permitted. However, the PPF account matures after a 15-year lock-in period. On maturity, the depositor has three options: receive the maturity payment, keep the maturity value in the account without making any additional deposits to earn PPF interest, or extend the account for an additional block of five years.

In addition, PPF allows premature closure in the event of a life-threatening illness affecting the account holder, spouse, or dependent children, in the event of higher education, or in the event of a change in the account holder's citizenship. A penalty of 1% interest will be charged at the time of premature closure.

Raghuram Alukur Trikutam, CEO, Descrypt said "As far as withdrawals are concerned, PPF accounts mature over a 15-year period. However, partial withdrawals can be done after 6 years. Withdrawals from PPF accounts are tax-free, however, closure of a PPF account will attract a penalty of 1% of the amount withdrawn at the time of closure."

"The PPF has a lock-in period of 15 years, which means partial withdrawals can only be made after completing the sixth financial year. However, an account holder can withdraw prematurely, up to a maximum of 50% of the amount that is in the account at the end of the 4th year but the complete withdrawal is only allowed on maturity after 15 years," said Avinash Shekhar, Founder & CEO, TaxNodes.

Conclusion

"The Public Provident Fund (PPF) is a popular investment option among individuals seeking long-term savings and tax benefits. As a government-backed savings scheme, the PPF offers attractive interest rates and tax advantages. However, it is essential for investors to have a clear understanding of these rules to make informed decisions and optimize the benefits offered by the Public Provident Fund," said Avinash Shekhar, Founder CEO, TaxNodes.