Public Provident Fund (PPF) is a long-term, government backed small savings scheme. Public Provident Fund is an ideal vehicle for long term investment in debt category, an important retirement saving tool for individuals, more so for those who are not salaried employees Our post Understanding Public Provident Fund, PPF explains in detail about the investment amount, interest rate, power of compounding, who can open, where can one open etc. In this article we shall only focus on how to pay the PPF amount in different scenarios such as in Post Office, State Bank of India and related banks and online.
Overview of Public Provident Fund
PPF comes under the THE PUBLIC PROVIDENT FUND ACT, 1968 available at Indiapost’s webpage THE PUBLIC PROVIDENT FUND ACT, 1968(pdf). Features of PPF are as follows :
- PPF works on financial year basis (April 1st – March 31st).
- The interest rate is around 8% currently 8.80% p.a.
- You need to deposit a minimum of Rs. 500 per year in a PPF account.
- Maximum amount which you can deposit in a PPF account is Rs. 100,000. (Earlier limit was Rs 70,000 it was increased to 1 lakh from 1.12.2011 )
- Deposit amounts should be in multiple of Rs. 5.
- You can deposit lump sum or multiple installments.
- Maximum number of installments in a year can not be more than 12.
- Amount of each installment in a month and also in different years can vary.
- Ex: In a year one can remit Rs 500 in month of Apr, then 2000 in month of July, 5000 in month of Mar. In the next year one can pay Rs 5000 in month of Jun.
- Amounts can be deposited in cash, cheque or via demand draft. If you are depositing a cheque or demand draft, then the date of deposit that will appear in your PPF account will be the date of cheque clearance and not the day you present the cheque. Say if you deposit the cheque on the 1st of the month but it fails to clear by the 5th for whatever reasons, you will loose out whole month’s interest
- Instructions for remitting in PPF account as per the THE PUBLIC PROVIDENT FUND ACT, 1968(pdf) are as follows :
- For remitting in PPF account by cash or cheque or demand draft one needs to fill Form B or Challan B . It is shown below (click on image to enlarge. It’s pdf is here (pdf)). One needs to fill the same information three times i.e triplet
- Now one can pay through internet banking using Fund Transfer or Third Party Transfer if PPF account is in the bank.
Deposit by cash or cheque in Post office
Steps to pay using Cash/Cheque in Post Office
- Fill Form B (pdf format view or download here) shown below with appropriate details.
- If paying by cheque , cheque should be in the name of Postmaster, <name of Post office>, (PPF Account Number). Remember that date of deposit that will appear in your PPF account will be the date of cheque clearance and not the day you present the cheque
- Get the passbook updated (which may take a week if paying by cheque)
If you opened your PPF account through agent in Post office, your agent may not provide remittance into PPF account and you might have do it yourself.As from 1-Dec-2011 payment of commission to agents on Public Provident Fund Scheme (1%) and Senior Citizens Savings Scheme (0.5%) was discontinued.(Ref).
Deposit by cash or cheque in Bank
Steps to pay using Cash/Cheque in Bank (SBI, ICICIBank, IDBI) same as in Post Office (except name on the cheque)
- Fill Form B (pdf format view or download here) shown above with appropriate details. Fill the Date, Account No, name of subscriber, address,details of cash or cheque number.
- If paying by cheque , cheque should be in the name of <PPF account holder name> – PPF Account Number. Remember that date of deposit that will appear in your PPF account will be the date of cheque clearance and not the day you present the cheque
- Get the passbook updated (which may take a week if paying by cheque)
One can transfer money online from saving bank account to PPF account using Funds Transfer or Third Party Fund Transfer. This enables one to transfer funds from one’s accounts to other account in the same branch or other branches or a different bank. To make funds transfer, one should be an active Internet Banking user with transaction rights.
- Transfer funds within your own accounts called as Fund Transfer.
- Transfer funds to third party account held in the same bank. It which is used to transfer funds to another account that belongs to somebody else but in the same bank (not necessary to be in the same branch as yours) which is called Third Party Transfer.
- Make an Inter bank funds transfer to any account held in any bank called as Interbank Transfer to transfer money to any one having account in any bank (or branch) in India. Interbank transfer is usually done through NEFT transfer or RTGS transfer.
Usually Third Party Transfer is used for transferring funds to third party account in same bank and Inter bank transfer. Our article Third Party Fund Transfer : NEFT,RTGS
PPF Account is in SBI and Saving Account is in another bank
- 1: Logon to your Savings account netbanking (ICICI/ HDFC/ any other bank)
- 2. Add your PPF account as Third party Beneficiary so that you can transfer funds to it
- a) Enter Payee Name – Same as Name in PPF Account
- b) Select SBI branch where PPF account is maintained
- Enter Payee Account number – same as your PPF Account number
Once you have completed these steps you can see your PPF account as the 3rd party account where you can transfer the money just like you send it to any account.
Images from JagoInvestor’s Online transfer to your Public Provident Fund (PPF) account (Click on image to enlarge)
PPF Account is in SBI and Saving Account is also in SBI (Same branch)
If you have your PPF account and savings account at same SBI branch, then you can see your PPF account already linked with your Bank account in NetBanking and you can transfer the money. In this case, there is no need to add PPF Account as Third Party Beneficiary. You can transfer money as Funds Transfer
- Log on to Personal Banking of SBI’s Internet Banking site with your details (user id, password)
- Select Payments/Transfers and then Funds Transfer : Now you can see your accounts associated with your userid.
- Select the account from which you wish to transfer funds and the account into which the amount is to be transferred or credited.
- Enter the amount and remarks. Remarks can be seen as description for this transaction in your bank account statement. Helps in recalling.
- Confirm the transaction. On confirming the transaction, you will be displayed a confirmation page with the details of the transaction and the option to submit or cancel the funds transfer request
- On submitting A reference number will be generated for the transaction.
Pictures from mutual-funds-personalfin SBI PPF Online Transfer for the process (Click on image to enlarge)
If your PPF account is linked you can see the details of your PPF account. Bank of India has a presentation on Viewing of PPF. A query on PPF account is shown below.
PPF Account is in SBI and Saving Account is also in SBI (different branch)
In case you have your PPF account and savings account with SBI but in different branches, then you should call Customer care or visit branch and ask them to link the accounts. Once linked you can use Fund Transfer. In the meantime, you can transfer funds using the option of adding Third Party Beneficiary.
Saving bank account and PPF account in ICICI Bank with NetBanking
Through ICICI Bank Internet banking, you can:
- Fill form online for PPF account
- View your PPF account under your ‘My Accounts’ section in the logged in section
- Transfer funds from linked Savings Bank Account online
- View and print mini and detailed statement online
IDBI Bank : PPF account holders of IDBI Bank have the benefit of accessing their PPF account online. Through Internet banking, theycan view their PPF account details, print statement of accounts and also make subscription to PPF by way of online transfer of funds from the savings bank accounts.
- Understanding Public Provident Fund, PPF
- On Maturity of PPF account
- PPF Account for Minor and Self
- Choosing Tax Saving options : 80C and Others
- Third Party Fund Transfer : NEFT,RTGS
In this article we have shown different ways to remit into PPF account. How do you pay into your PPF account, lump sum or installments, use internet banking or go to the bank to deposit into PPF account.