Bank of Baroda’s Public Provident Fund (PPF) Scheme
Bank of Baroda’s Public Provident Fund (PPF) Scheme
Bank of Baroda has a legal permit to offer services with respect to Public Provident Fund Accounts. Public Provident Fund Account was launched by the Government of India to mobilise small savings and investment so that the investors get a tax benefit with reasonable interest over a period of time. A PPF account that can be opened by individuals to build an investment corpus with tax benefits. The PPF account can be opened through the internet banking facility of Bank of Baroda as well. In this article, we look at the procedure for opening of Bank of Baroda’s Public Provident Fund Account in detail.
To know about Bank of Baroda Current Account
Benefits of PPF Account
Some of the benefits of opening a Public Provident Fund Account are listed as follows:
- Online subscription facility: Existing customers of the bank having PPF account can deposit the amount online in PPF account from the savings account.
- The deposits can be made as one lump sum amount or maximum of 12 instalments in a financial year.
- The deposited amount can be a minimum of 500 in a financial year, and the maximum amount can be Rs. 1,50,000 in a financial year.
- The interest that is earned is fully exempted for Income Tax purposes under section 80C.
- No tax is levied on the interest income.
- It offers tax-free returns, exempted from wealth tax and deduction in the deposited amounts.
- It offers the Partial Withdrawal facility up to 50% from the 7th Financial Year.
- The account can be extended for the further block of 5 years.
- The Loan facility against PPF Account is available after 3 years of time frame.
- The PPF accounts can also be transferred from the bank branch to the post office when required.
The below following are the eligibility criteria for opening the Bank of Baroda PPF Account:
- Any resident Indian individuals can open this account.
- PPF Account can be owned by an individual or an individual on behalf of a minor of whom he/she is the guardian.
- The number of minor accounts that are allowed is limited to one for each minor child.
Note: The individuals cannot open the joint account. Also, the PPF account cannot be opened by the Hindu Undivided Family (HUF).
To open a PPF account in Bank of Baroda, the below following are the list of self-attested documents to be submitted along with the application form:
- Application Form
- Nomination Form (if nominating a beneficiary)
- Know Your Customer (KYC) Form
- Self-attested ID proofs such as PAN card, Aadhaar card, Voter ID, etc.
- Proof of Residence such as Passport, Electricity Bill, etc
- In addition, any other document required by the bank.
- Once all the documents mentioned above are self-attested and valid, the account can be opened.
- A depositor can get of loan facility in the third financial year in which the account was opened. Application in prescribed form is to be made for the loan along with the pass book of the account.
- In case, the loan amount is sought from a minor’s account; the guardian has to make a declaration stating that the money is required for the benefit of the minor. The loan can be availed up to 25% of the loan amount in the account at the end of the second year immediately.
- The loan is repayable in lump sum instalments. When the load is repaid within 36 months, the interest will be charged at 2% of the principal amount; otherwise, interest has to be paid at 6% of the outstanding loan amount. The interest has to be paid in not more than two instalments after the loan amount is fully repaid.
- Upon the repayment of the first loan, the second loan can be easily obtained based on the same terms. This facility can be accessed until the end of the 6th financial year in which the initial subscription was made. These loans can be taken only once a year.
- Up to 2 loans are permissible during the currency of the PPF Account.
- The interest must be paid as per the charges declared by the Government from time to time.
- The interest is compounded annually, and it has been revised to 8% per annum.
- The interest for the month is calculated based on the available minimum balance in the account from 5th of a month to the last date of the month.
- If cheques drawn on other banks, the date of realisation of a cheque would be the date on which the amount deposited.
A PPF account on the expiry of 15 years, can be extended for a further period of 5 years.
The subscribers are allowed pre-mature closure of their account or the account of a minor to whom he/she is a guardian only after the completion of 5 financial years. A written application is required to be submitted to the Accounts Office on any of the following grounds as given:
- If the amount is required for the treatment of serious ailments or life-threatening diseases of the account holder, parents or spouse or dependent children. On production of documents required from a competent medical authority.
- If the amount is required for the higher education of the account holder or the minor account holder, on providing the documents/certificates and fee bills in confirmation of admission in a recognized institute of education in India or abroad.
To open this PPF Account with the Bank of Baroda, the applicant can fill the form with necessary details on its official website. For offline, the applicant has to approach the nearest branch of the bank and can submit the PPF application form along with mandatory documents. After the verification process done by the bank official, the account will be created.