A Public Provident Fund (PPF) Account can be opened by any resident Indian Individuals (Salaried, Business men, Self employed professional or any other category).
If a salaried class person has a General provident Fund account, or an Employees Provident Fund account, he can still have a PPF account there is no restriction.
PPF account by Grand Father/Mother
The grand father/mother cannot open a PPF account on behalf of their minor grand son/daughter except in the case grand father/mother are acting as the guardian of the minor.
NRIs opening PPF account
Non-resident Indians (NRIs) are not eligible to open a new PPF account.
Earlier you could keep an existing PPF account even if you become an NRI but that rule has also been changed. As per the new rule issued in 2017 as soon as your residential status changes your PPF account will be deemed closed.
From the day your residential status changes till the day you withdraw money from your closed PPF account, your closed PPF account will earn the interest rate payable on a post office savings account (Current rate is 4%), which is almost half of the interest rate you get on a PPF account.
HUF opening PPF account
Opening of PPF accounts in the name of Hindu Undivided Family is also not permitted. Since May 13, 2005, HUF also can not open a account under the PPF scheme. If the PPF accounts was opened, in the name of HUF, prior to May 13, 2005 subscription may continue to that account till maturity. That account can not be extended any further i.e. it has to be closed after 15 years.
Number of PPF accounts
A person can have only one PPF account in his name, if a person opens 2 PPF accounts anyhow and at some point it is detected that a person has 2 accounts (can easily be done by PAN) one of them would be closed and only the principal amount would be returned not the interest. Thus it would serve no purpose to have 2 PPF accounts.
PPF account for a minor
One exception to the stated one account per person rule is having an account for the minor where a person who is already having a PPF account can open another account on behalf of a minor but in that case combined limit for both the account would be 1.5 lakhs (Current limit for the PPF) anything deposited over and above that amount won't get any interest.
In case of family of four - couple and their 2 kids, Kid-1 and Kid-2 there are following scenarios for the number of PPF accounts an individual can have.
- Father can open PPF account for self, kid-1 and kid-2.
- Mother can open PPF account for self, kid-1 and kid-2.
- Father can open PPF account for self and one kid (kid-1 or kid-2).
- Mother can open PPF account for self and one kid (kid-1 or kid-2).
Points to note -
- Joint PPF accounts are not permitted.
- An individual can't have more than one account on his/her name.
- No age is prescribed for opening a PPF account.
- Parents and Guardians can open PPF account for minors.
- Opening of PPF accounts in the name of Hindu Undivided Family is not permitted.
- NRIs are not eligible to open a PPF account. Any existing account will be deemed closed on the date of residential status change.
That's all for this topic Public Provident Fund (PPF) Account Opening Eligibility. If you have any doubt or any suggestions to make please drop a comment. Thanks!
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if being a father i open an PPF account of my two kids. What documents of kids as well as father are required during opening an account.
ReplyDeleteThank you for sharing such great information. It is informative, can you help me in finding out more detail on Ppf Account , I am interested and would like to know more about this field and wanted to understand the basics of Banking Services.
ReplyDeleteThank you for sharing such great information. It is informative, For More Details Visit: http://www.idbi.com/gbg-ppf.asp