How to Open PPF Account Online — Public Provident Fund Guide

The Public Provident Fund (PPF) is one of India's most trusted long-term savings schemes backed by the Government of India. It offers guaranteed returns, complete tax exemption, and the safety of a sovereign guarantee. Whether you are a salaried employee or self-employed, a PPF account is one of the best ways to build a tax-free retirement corpus.

What is PPF?

PPF (Public Provident Fund) is a government-backed savings scheme introduced in 1968 under the PPF Act. It is managed by the National Savings Institute under the Ministry of Finance. Key highlights:

• Government guaranteed — zero risk of default
• EEE tax status — Exempt at investment, exempt on interest, exempt at maturity
• Long-term wealth building — 15-year lock-in with extension options

PPF Account — Key Details at a Glance

Note: The PPF interest rate is reviewed and set by the Government of India every quarter. Always check the latest rate on the NSI website.

Who Can Open a PPF Account?

• Any Indian resident individual
• Parents/guardians can open an account on behalf of a minor child
• Only one PPF account per person is allowed (one self + one for minor child)
• NRIs cannot open new PPF accounts (existing accounts opened before becoming NRI can continue till maturity)
• HUFs, trusts, and companies are not eligible

How to Open PPF Account Online — Step by Step

Option 1: Open PPF Account via SBI Online (YONO / Internet Banking)

1. Log in to SBI Internet Banking (onlinesbi.sbi) or the YONO SBI app
2. Go to Deposits & Investments → PPF → Open a PPF Account
3. Select whether the account is for Self or Minor
4. Enter your PAN number and nomination details
5. Choose the initial deposit amount (minimum ₹500)
6. Verify details and confirm with OTP
7. Your PPF account number is generated instantly
8. Download the acknowledgement slip for your records

Option 2: Open PPF Account via Other Bank Portals

Most nationalised banks (Bank of Baroda, Punjab National Bank, Bank of India, etc.) offer PPF account opening through their net banking portals. The process is similar:

1. Log in to your bank's internet banking
2. Navigate to the PPF / Government Schemes section
3. Fill in personal details, PAN, and nominee information
4. Make the initial deposit and confirm

Option 3: Open PPF Account at Post Office

1. Visit your nearest post office with KYC documents
2. Fill Form A (PPF account opening form)
3. Submit Aadhaar card, PAN card, and a passport-size photo
4. Make the initial deposit (minimum ₹500, cash or cheque)
5. Receive your PPF passbook within a few days

PPF Tax Benefits — Complete Breakdown

PPF enjoys EEE (Exempt-Exempt-Exempt) tax status, the most favourable tax treatment in India:

This means if you invest ₹1.5 lakh per year for 15 years, both the interest earned (₹18.18 lakh at 7.1%) and the maturity amount (₹40.68 lakh) are 100% tax-free.

PPF Withdrawal Rules

• Partial withdrawal allowed from the 7th financial year onwards
• Maximum withdrawal: 50% of the balance at the end of the 4th year preceding the year of withdrawal, or the balance at the end of the preceding year — whichever is lower
• Only one withdrawal per financial year is permitted
• Withdrawal is completely tax-free

Loan Against PPF

• You can take a loan against your PPF balance from the 3rd to the 6th financial year
• Maximum loan: 25% of the balance at the end of the 2nd year preceding the year of application
• Interest rate on loan: 1% above the PPF interest rate
• Loan must be repaid within 36 months

Premature Closure of PPF Account

PPF accounts can be prematurely closed only after 5 years of opening, and only under specific conditions:

• Serious illness of account holder, spouse, dependent children, or parents
• Higher education of the account holder or dependent children
• Change of residency (NRI status)

A penalty of 1% is deducted from the interest rate for the entire tenure upon premature closure.

PPF Account Extension After Maturity

After 15 years, you have two options:

1. Withdraw the full amount — tax-free
2. Extend in blocks of 5 years — with or without fresh contributions

If extending with contributions, you must submit Form H within one year of maturity.

PPF vs FD vs NPS vs SSY — Comparison Table

Verdict: PPF offers the best risk-free, fully tax-exempt returns for long-term savings. NPS gives potentially higher returns but with market risk and partial taxation. SSY offers the highest guaranteed rate but is only for girl children.

Tips to Maximise Your PPF Returns

1. Deposit before the 5th of every month — interest is calculated on the lowest balance between the 5th and the last day of the month
2. Invest the full ₹1.5 lakh to maximise both tax savings and corpus
3. Make a lump sum deposit in April (before April 5th) to earn interest for the full year
4. Extend your account after 15 years to keep earning tax-free interest
5. Do not miss the minimum ₹500 deposit — your account becomes inactive and attracts a ₹50 penalty per year to revive

Frequently Asked Questions (FAQ)

1. Can I open a PPF account online without visiting the bank?

Yes. If you already have a savings account with SBI or other major banks with active internet banking, you can open a PPF account fully online through net banking or mobile apps like YONO.

2. What is the current PPF interest rate in 2025-26?

The PPF interest rate for Q4 FY 2025-26 is 7.1% per annum, compounded yearly. The rate is reviewed quarterly by the Government of India.

3. Can I have two PPF accounts?

No. Only one PPF account per individual is allowed. You can open a second account only as a guardian for your minor child. If duplicate accounts are found, the second account is deactivated.

4. Is PPF better than Fixed Deposit?

For long-term savings (15+ years), PPF is better than FD because PPF interest is completely tax-free (EEE status), while FD interest is taxed as per your income slab. However, FDs offer more flexibility in tenure.

5. Can NRIs open a PPF account?

No. NRIs cannot open new PPF accounts. However, if you opened a PPF account while you were a resident Indian, you can continue it till maturity (15 years) on a non-repatriable basis.

6. What happens if I don't deposit the minimum ₹500 in a year?

Your PPF account becomes inactive/discontinued. To revive it, you must pay the minimum ₹500 for each missed year plus a ₹50 penalty per year of default.

7. Can I withdraw my entire PPF amount before 15 years?

No. Full premature closure is only allowed after 5 years under specific conditions (serious illness, higher education, or NRI status), with a 1% interest rate penalty.

PPF is one of the safest and most tax-efficient investment options in India. Start early, invest consistently, and let compounding work for you.

Related Guides:

• Sukanya Samriddhi Yojana — Complete Guide
• Senior Citizen Savings Scheme
• How to File Income Tax Return Online
• How to Open Bank Account Online