Public Provident Fund (PPF) is the government of India initiative to encourage small savings. The PPF Interest Rate is 7.1% and is announced by the government every quarter. The tenure of PPF is 15 years. Additionally, the scheme also offers tax benefits. Investment, interest and maturity amount are all exempt from tax. One can open a PPF account with the post office or any of the authorised banks. Canara Bank is one such bank where one can open a PPF account. This article covers Canara Bank PPF, its features and interest rates in detail.
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Canara Bank PPF Interest Rates 2023
The Canara Bank public provident fund interest rate is 7.10% p.a. as of December 2023. The Ministry of Finance announces the interest rate every quarter. The interest rate on PPF account in Canara bank is compounded annually. One can estimate their returns from investment in a Canara Bank public provident fund using a PPF calculator. Scripbox’s PPF calculator is free to use and is available online.
The interest that one earns on PPF is completely exempt from tax. Moreover, the maturity amount also qualifies for tax benefits as per the Income Tax Act, 1961.
How to open a PPF account in Canara Bank?
One can open Canara bank PPF online or through offline mode.
The Canara Bank PPF account opening form (PPF Form A) has to be filled and submitted with all the necessary documents like Aadhaar Card, PAN Card, and Photographs at the nearest Canara Bank branch.
The following steps show how to open PPF account in Canara Bank online.
Opening the Canara Bank PPF account online is simple, and one has to follow the below steps:
- Go to Canara Bank website.
- In the PPF Account portal fill, all the required details include name, date of birth, email id, and mobile number for OTP verification.
- Enter the OTP and start the PPF account opening process.
- Fill the account opening form and upload all the required KYC documents and photographs.
- Upon opening the Canara bank PPF scheme online, the bank shall print the PPF passbook with details such as PPF account number, balance, branch details, etc. Furthermore, investors should keep their PPF passbook updated. They can do so by visiting the nearest branch.
The PPF Account opening form requires the following details of the investor:
- PAN Card Number
- Initial Contribution amount
- Account opening branch
- Nominee details
- Passport size photograph
Also, if the account is being opened in the name of a minor, then details of the minor have to be submitted.
Eligibility to open a PPF account at Canara Bank
Following is the eligibility criteria to open a Canara bank PPF account:
- Resident individuals of 18 years or more can open a public provident fund account in Canara Bank.
- Parents or guardians can open Minor PPF schemes on behalf of their minor child.
- One cannot open joint PPF schemes, and only one PPF account is allowed per person.
- NRIs cannot open a PPF account. However, suppose an existing PPF subscriber becomes an NRI before maturity. In that case, they can continue operating the account till maturity on non-repatriation basis.
Explore Canara Bank PPF Calculator
Documents Required to open a PPF account at Canara Bank.
Following are the documents required to open a PPF account with Canara Bank:
- Account opening form – filled and signed
- Passport size photographs
- Government-approved ID card – PAN Card, Aadhar Card, Voter ID, Driving License, Passport, etc.
- Proof of residence – Passport, gas receipt, utility bills, bank statement with a cheque.
Canara Bank PPF Account Rules
- Opening: One can open a Canara Bank PPF either through online mode or offline mode. To open a Canara Bank PPF account, one has to be eligible. Following is the eligibility criteria:
- Resident individuals above 18 years old
- Parents or guardians on behalf of minors
- Indians who moved out of the country before their PPF matures can continue to operate their PPF account on non-repatriation basis.
- Closing: Premature closure of the Canara Bank PPF account is allowed only on the death of the investor. However, investors can partially withdraw their Canara Bank PPF investment.
- Deposit: The minimum amount of deposit in Canara Bank PPF is INR 500. This small savings scheme has a minimum deposit amount of INR 100 and the maximum amount of investment is INR 1,50,000 per annum. One can invest the amount in lump sum or instalments.
- Transfer: Canara Bank PPF scheme can be transferred from one branch to another. Moreover, one can also transfer their PPF scheme from Canara Bank to other banks or post offices.
- Withdraw: One can fully withdraw their investment in Canara Bank PPF at the time of maturity. However, the bank allows partial withdrawals six years from the account opening (from 7th year).
Features and Benefits of a PPF Account
Following are the features and benefits of a PPF account:
- Tenure: The minimum tenure of a PPF account is 15 years. Furthermore, the investor has an option to extend their investment duration by a block of five years. Also, it doesn’t require any additional investments to be made by the investor.
- Eligibility: All Indian citizens can open a PPF account. However, Non-Resident Indians (NRIs) and Hindu Undivided Families cannot open a PPF account. Also, Indian citizens can open a PPF account in the name of a minor.
- Number of Accounts: Each individual can have only one PPF account in their name. However, they can open another PPF account on behalf of a minor. Also, the scheme doesn’t allow opening a joint account.
- Minimum and maximum investment amount: A PPF account can be opened with a minimum of INR 100. Also, in a financial year, the minimum investment amount is INR 500. On the other hand, the maximum investment in a PPF account per annum is INR 1,50,000. For all investments above INR 1,50,000, the investors do not get any interest.
- Deposit frequency: The deposit frequency has to be either once a year or in a maximum of 12 instalments in a year. It is mandatory to invest at least once in the PPF account for 15 years to keep the account active.
- Mode of deposit: One can use any of the following modes of deposits to invest in a PPF account: online, demand draft, cheque or cash.
- Risk: The Government of India backs the Public Provident Fund scheme. Therefore, it is among the safest investment options available. PPF investments offer guaranteed and risk-free returns. Furthermore, the scheme offers capital protection. Hence the risk factor for PPF investments is minimal.
- Nomination: The investor can nominate a nominee for their PPF account. One can do it either at the time of PPF account opening or subsequently any time in the future.
- Loan: Investors can avail a loan against their PPF deposits. However, they can avail the loan only between the third and the fifth year of the account tenure. Furthermore, the loan amount cannot exceed 25% of the total investments made at the end of the second financial year. Also, one can apply for a loan directly online at the bank’s website.
Additionally, depositors can also avail a second loan after the sixth financial year. However, the first loan should be paid entirely before getting the second loan.
- Taxation: Investments under the Public Provident Fund fall under the Exempt – Exempt – Exempt (EEE) category. In other words, the investments, interest, and maturity amount are all tax exempted. Investments up to INR 1,50,000 per annum qualify for tax exemption under Section 80C of the Income Tax Act, 1961. Therefore, one can consider PPF investment for tax saving purposes.