Public Provident Fund: Can an individual open PPF accounts in two different banks?

Public Provident Fund or PPF is one of the most popular savings options in India. The product comes with a maturity period of 15 years and is often considered safest among the traditional investors. PPF is very useful for accumulating long-term wealth and also offers tax benefits under Section 80C of the Income Tax Act (ITA). The interest earned through PPF is also tax-free. The government of India sets the interest rate every quarter and the current interest rate is 8 per cent. However, there are many doubts about this product that still bother the investors.

Among those, the most common question is whether an individual can open more than one PPF account with a single bank or with different banks! Hemant Rustagi, CEO, Wiseinvest Advisors told Zee Business Online that you can't. "We can only open one account with a single bank," he said. 

The account holders even have to provide an undertaking at the time of opening the account which reads: "I hereby declare that I am not maintaining any other Public Provident Fund Account, except an account on behalf of a Minor." 

What happens if a second account is opened by mistake?
In case the account holder opens a second account, he or she will not get any interest on the amount deposited in it. Also, they will not be able to avail any tax benefits on it. "So there is no point in opening several PPF accounts as it will not give any tax benefits," Certified Financial Planner, Poonam Rungta told Zee Business Online.

Minimum and maximum transaction
According to the rule, a PPF holder can do a minimum contribution of Rs 500 per year and maximum of Rs 1.5 lakh. One can also choose to deposit the money as lump sum or in installments, which must not exceed the limit of 12 installments per financial year.

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Is joint ownership allowed?
Joint ownership of a single account is not permitted. However, in case of a minor, it is allowed to open an account with a guardian, who has to be either mother or father, not both or court-appointed guardian.
Tenure of PPF account

The tenure of a PPF account can be extended after 15 years in blocks of 5 years each. But the account holder must extend the tenure within one year of maturity. Again, the account holder can retain his/ her PPF account for any period of time after maturity without making any further deposits but will continue to earn interest on the balance amount. If the subscriber wants to withdraw the amount within the 5 years of the extension period, then only one withdrawal is possible not exceeding 60 per cent of the total amount.

The PPF account can be transferred from one branch to another or from one bank to another and from a post office to a bank and vice versa without any additional charge.