Public Provident Fund 1968 Scheme

Public Provident Fund

Public Provident Fund (PPF) scheme is a popular long term investment option backed by Government of India which offers safety with attractive interest rate and returns that are fully exempted from Tax. Bank of Baroda operates Public Provident Fund scheme across its branches all over India.

Key Benefits of PPF

  • Account can be opened by an individual/an individual on behalf of a minor of whom he/ she is the guardian
  • Minimum Rs.500/- in a financial year, Maximum Rs. 1,50,000/- in a financial year
  • Deposits can be made in one lump sum or maximum of 12 installments in a financial year
  • No income tax on interest income
  • PPF accounts are transferrable to/from any Bank/Branch, Post Office
  • Loan facility against PPF A/c available after 3 years
  • Partial Withdrawal up to 50% is possible from 7th Financial Year
  • Nomination facility available
  • Extension of account is possible for further block of 5 years
  • Tax rebate under Sec 80 C

Key features:


Any adult in his / her name or in minor's name in the capacity of guardian of the minor. HUF and NRIs cannot open PPF account.

Online subscription facility

Existing customers having PPF account with Bank of Baroda can deposit online in PPF account from Bank of Baroda savings account.

Minimum amount

Rs. 500/- per annum is required to be deposited. The accounts in which deposits are not made for any reason are treated as discontinued accounts and such accounts cannot be closed before maturity. The discontinued account can be activated by payment of the minimum deposit of Rs.500/- with default fee of Rs.50/- for each defaulted year.

Maximum amount

Rs. 1.5 Lacs per annum . The depositor has flexibility and freedom for depositing any amount in a maximum of 12 installments in a financial year.

Maturity period

15 years. An Account, on the expiry of fifteen years, can be extended for a further period of five years at a time.

Interest Rate

  • The interest is paid as per the rates declared by the Government from time to time.
  • The interest has revised to 7.9 % p.a.
  • The interest is compounded annually.
  • The interest for the month is calculated on the minimum balance available in the account from 5th of a month to the last date of the month.
  • In case of cheques drawn on other Banks date of realisation of the cheque shall be the date of deposit.

Nomination facility



A PPF account can be transferred from a branch of an authorised bank to Post Office and vice versa and also from a branch of the bank to another branch.

A PPF account cannot be transferred from one person to another. Even in the case of death of a depositor, the nominee cannot continue the account.

Loan facility

A depositor can avail of loan facility in the third financial year from the financial year in which the account was opened. Application in prescribed form is to be made for loan along with the pass book of the account.

In case, the loan is sought from minor's Account, the guardian has to make a declaration that the money is required for the use/benefit of the minor. The loan can be taken up to 25% of the amount in the account at the end of the second year immediately preceding the year in which the loan is applied for.

The loan is repayable in lump sum or convenient instalments. Where loan is repaid within 36 months, interest is charged at 2% of the Principal, otherwise, interest is to be paid at 6% of outstanding loan amount. The interest is to be paid in not more than two instalments after the loan amount is fully repaid.

Once the first loan is repaid, second loan can be obtained on same terms. This facility is available till the end of 6th financial year from the end of the financial year in which initial subscription was made. Such loan can be taken only once a year.

Only 2 loans are permissible during the currency of the PPF Account

Withdrawal facility

A depositor can make partial withdrawals, once every year from his PPF account from 7th Financial Year, from the end of Financial Year, in which the initial deposit was made. The amount of withdrawal is restricted to 50% of the credit balance at the end of the fourth year immediately preceding the year of withdrawal or the year immediately preceding the year of withdrawal, whichever is lower. Only 1 withdrawal can be taken in a Financial Year. No reason is required to be given for withdrawal.

In case, the withdrawal is sought from minor's Account, the guardian has to make a declaration that the money is required for the use/benefit of the minor.

In case of accounts extended beyond Maturity period partial withdrawals are allowed once in a year with the condition that the amount of withdrawal during a five year block period should not exceed 60% of the balance in the account at the commencement of the block period.

Premature Encashment

A subscriber shall be allowed pre mature closure of his account or the account of a minor of whom he is the guardian only after completion of 5 financial years, on a written application to the Accounts Office on any of the following grounds namely:-

  • That the amount is required for the treatment of serious ailments or life threatening diseases of the account holder, spouse or dependent children or parents. On production of supporting documents from competent medical authority.
  • That the amount is required for higher education of the account holder or the minor account holder, on production of documents and fee bills in confirmation of admission in a recognized institute of higher education in lndia or abroad.

Tax benefits

Interest income is totally tax free.

Other features

  • The benefits of exemption of interest from Income Tax is not available on deposits made in a PPF account after expiry of fifteen years without exercising option in writing for continuance of the account within one year.
  • The deposit in a minor account is clubbed with the deposit of the account of the guardian for the limit of Rs. 1,50,000/- per annum .
  • On death of the account holder his nominee(s)/legal heir(s) cannot continue the account. The account has to be closed in such case.
  • Deposits in excess of Rs. 1,50,000/- per annum in a financial year in a PPF account are refunded without interest and the excess amount is not considered for income tax rebate.

Deposit of any Branch of Bank

The PPF account holders can deposit subscription at any branch of the Bank.

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