Public Provident Fund account holders can transfer their accounts between authorised banks and post offices without affecting the continuity of the account or the accumulated corpus. Such transfer can be carried out if you change jobs, move to a different location, or switch banks.
Backed by the Government of India, the is a long-term savings scheme that offers guaranteed returns along with tax benefits under the income tax act. It currently offers an interest rate of 7.1% per annum, which is compounded annually. The account has a mandatory 15-year lock-in period. Upon maturity, you can extend the tenure indefinitely in blocks of 5 years, either with or without making further contributions.
A depositor can invest a maximum amount of ₹1.5 lakh in the scheme every financial year. As per existing rules, each account holder must make a minimum contribution of ₹500 each year. These contributions can be made either on a monthly or annual basis.
How to transfer a PPF account?
It is possible to transfer a PPF account between different bank branches, from one bank to another, or from a Post Office to a bank, and vice versa by following these simple steps:
Step 1: Visit your current bank or post office branch where you opened your account and carry your PPF passbook.
Step 2: You need to submit a transfer request application using Form-5 to initiate the process of moving your PPF account from one bank or post office to another.
Step 3: On the PPF account transfer application form, include the complete address of the post office or bank branch where you wish to transfer your PPF account. After that, the current branch will initiate the process once it receives your account transfer application.
Step 4: Ensure that you receive a receipt for the transfer request. The bank will also submit documents such as the application form for creating an account, nomination form, certified copy of the account, current PPF passbook, demand draft or cheque for the unpaid balance and signature.
Step 5: You will most likely receive a notification once the new bank or post office branch has received your documents.
Step 6: You must finish the KYC process and provide a copy of your PAN card as well as personal identity and address documentation.
Step 7: If there is a change in KYC, the new bank might request the account holder to complete a new account opening form. Subsequently, the new bank will open a PPF account and transfer the existing balance into it.
Can your PPF account and balance be transferred to another person?
A PPF account cannot be transferred from one individual to another, as the scheme does not permit change of ownership under any circumstances. This restriction also applies in the event of the death of the original subscriber, where the nominee is not allowed to continue operating the account in their own name.
If the subscriber dies during a financial year, their executors cannot deposit any sum from the income of the deceased to their . If they do so, the amount deposited shall neither carry interest nor shall this amount be eligible for rebate. This amount will be refunded without interest to the nominee or legal heir, at the time of closure of the account, according to information available on the official National Savings Institute’s website.
Tax benefits of PPF
PPF enjoys one of the most favourable tax treatments among investment options in India, as it falls under the (Exempt-Exempt-Exempt) category. This means that contributions made to a PPF account are eligible for tax deduction under Section 80C of the Income Tax Act, up to ₹1.5 lakh in a financial year.
Additionally, the interest earned on investments is completely tax-free, making it a suitable option for long-term savers seeking to maximise their post-tax returns. Apart from that, the maturity proceeds withdrawn from a PPF account are also entirely exempt from tax, ensuring investors receive the full benefit of their accumulated corpus without any deductions.