PPF is a great way to save money and tax. Generally, users open PPF accounts at Post Offices or Nationalized Banks like SBI. These banks do not offer best experience when it comes to online banking and making payments to PPF and checking the account balance is still an offline process. Hence sometimes it makes sense to transfer the PPF account to a private bank and take advantage of online banking for PPF account.
Through this article, we’ll see how to transfer ppf account from one bank to the other smoothly. But before that, let’s understand why it is important to have a PPF account.
Why to open a PPF account?
Smart savings today are crucial. Merely investing in a bank today doesn’t guarantee you appropriate returns for your money. Investing smartly and in the right scheme is equally necessary for any person.
One of the few methods through which one can smartly invest his money and get returns is the PPF account which stands for Public Provident Fund account.
A PPF account is a very smart saving scheme launched by the central government of India for residents of India. A foreigner can’t open a PPF account neither can an NRI. However, in case a person becomes an NRI during the period of PPF account holding, the individual can continue on for that particular term. PPF requires you to deposit a minimum amount of ₹500/- in one transaction and can go up to ₹1 lakh per year and that can also be done in one transaction. Minimum one transaction per year is necessary.
Following are some advantages of a PPF account:
- Tax free returns
- Decent rate of interest (current rate is 8.7% p.a., varies from year to year)
- Long term saving scheme
- Flexibility in amount to be deposited
Need for Transfer of PPF account
A PPF account can be opened with any nationalized bank, an authorized private bank (ICICI, IDBI, etc.) or the Indian post. The scheme remains the same regardless of the institution you choose to open the account with. However in certain circumstances, convenience and vicinity can become an issue. Plus the service and customer care of the private banks and even nationalized banks are supposedly better than that of the post office. In situations like these, one needs to transfer the PPF accounts from one institution to the other. The provision for this is also available in this scheme and the procedure to be followed is explained as below.
How to Transfer PPF account from one Bank to the other?
The process of transfer of a PPF account from one bank to another bank or the post office, or vice-versa is very simple. The biggest advantage of this is that no amount is deducted as a fee for the transfer. However, in comparison to the other types of transfers, this process takes quite a long time. Generally, the transfer takes around 2 weeks’ time.
- Step 1 – In order to make the transfer, simply approach the bank or post office branch where the PPF account is held and ask for the form for making the transfer. The bank or post office will provide you with a form which is to be filled. The sample PPF form of SBI available online.
- Step 2 – The existing bank will then forward the certified copy of the account, the account opening application, nomination form, and specimen signature. It will also forward the cheque/dd for the outstanding amount in the PPF account to new bank at the branch specified by the customer.
- Step 3 – Once your bank receives these documents, the bank will inform you and ask you to submit a new PPF account opening form along with the old PPF passbook. You can also provide nominations for this new account. You will also be required to submit the KYC documents.
- Step 4 – If you hold an internet banking facility with your bank, after a few week, check that the transferred PPF account now shows up under the PPF account tab/link in your login. If that is not the case, enquire the local bank branch
Making online payments to PPF account
Bypassing the offline route is another smart way of banking nowadays. Same can be done for the PPF accounts as well. In order to make the payments and transfers online without having to visit the branches, you must first get yourself registered via the offline route which obviously involves standing in queues, but that’s just one time. Following steps need to be followed for making online payments to PPF accounts:
- Get yourself registered with your bank for an online net banking account.
- After you have registered yourself, login to your account to make the transfers. Choose the option of third party transfers.
- In order to transfer funds directly in to your PPF account, nominate the PPF account you hold as a beneficiary account.
- In order to do this, you must first enter all the required details. Then select the branch of the bank in which your account is held. The final step involves you adding the Payee account number.
- Once the PPF account has been nominated as the beneficiary account, rest of the process is standard online bank funds transfer process, which involves filling up of forms and entering necessary details.
Just as a cautious measure for beginners, it is advisable to first make an online transaction of the minimum amount possible that is a sum of ₹500/- which helps the customer get used to the new means and methods of online transactions.