Team-BHP - The "Provident Fund" Thread

A basic question on PPF (Public Provident Fund) contribution payment. I have my PPF account in a SBI Branch in city A. However, my savings account (which is in city B) is not in SBI, neither do I have any SBI account personally. My savings account is in a private sector bank.

1. Is it possible to transfer my PPF contribution using net banking / NEFT directly from my non-SBI savings account to my PPF account in SBI? I have been making PPF payments through cheque deposits till now, but wish to shift to online transfers due to the convenience factor. I did enquire at the SBI branch involved, but they were not certain themselves!

2. If yes, is the process any different from the usual bank account- to -bank account fund transfer that we ordinarily do through net banking?

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Originally Posted by arindambasu13 (Post 4548803)

1. Is it possible to transfer my PPF contribution using net banking / NEFT directly from my non-SBI savings account to my PPF account in SBI?

Yes

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2. If yes, is the process any different from the usual bank account- to -bank account fund transfer that we ordinarily do through net banking?

No. The IFSC code would be that of the branch where the account was opened.

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Originally Posted by arindambasu13 (Post 4548803)

A basic question on PPF...
1. Is it possible to transfer my PPF contribution using net banking/NEFT directly from my non-SBI savings account to my PPF account in SBI?
2. If yes, ... the process?

You can.

The PPF account has similar credentials as any other banking account. If you are contributing regularly, you can schedule a standing instruction from your savings/salary account (any bank). Else, use IMPS/NEFT as and when you require.

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Originally Posted by libranof1987 (Post 4548811)

The IFSC code would be that of the branch where the account was opened.

Correct.

PS: The source of information was an accountant at my SBI branch. He is usually not wrong!

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Originally Posted by libranof1987 (Post 4548811)

Yes

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Originally Posted by dailydriver (Post 4548830)

PS: The source of information was an accountant at my SBI branch. He is usually not wrong!

Thanks both! While the bank manager at the SBI branch (where I have my PPF account) did say that NEFT from another SBI branch was definitely allowed, he was not able to confirm whether NEFT from a different (non SBI) bank account was similarly possible. Hence the question. Thank you for confirming that it is possible.

There were some news articles (confusing) about no interest to be paid for EPF accounts if idle for more than 3 years. From what I know, these instruments were for long term / retirement savings, but the above news contradicts the same. The agrument put forward was that people were using EPF for higher interest benefits, which doesn't make sense as the scope of this account is to save.

How do they decide that an account is idle?
- user might be on-site n hence no contribution to EPF account in India
- user may have lost his job and has not found one
- user might have a dormant account because of a new account being created for him in the new organisation (without transferring the amount yet). This can be covered with common UAN I guess.

Anyone has a clear idea of this above news/rule of no interest for accounts idle for > 3 years? Anyone faced this issue already?

Thanks.

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Originally Posted by arindambasu13 (Post 4548843)

...branch was definitely allowed, he was not able to confirm whether NEFT from a different (non SBI) bank account was similarly possible.

+1 to libranof1987 and dailydriver.

Just to add, I transfer from ICICI savings to my SBI PPF account regularly. If you have access to the online SBI portal, you can do a test transfer of some 500 bucks to verify the same before sending bigger amounts. Can confirm both NEFT and IMPS working.

My PPF account has matured on 01 April 2019. I intend to use the entire corpus to buy a house by December.

Will the account continue to get compounded interest for period between 02 April 2019 and the final date when I withdraw the money?

I cannot put any more money for this financial year unless I fill a form to extend this by another 5 years - and currently I do not wish to exercise that option.

Unfortunately I could find any clear information on the interest part on a matured account.

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Originally Posted by S_U_N (Post 4569408)

You don’t get a penny more in interest unless you extend for 5-10 years. Withdraw and keep it in an fd or liquid mutual fund.

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Originally Posted by S_U_N (Post 4569408)

You will not get any interest since it has matured. Don't waste your money in PPF.. It grows at snails pace not even enough to cancel out inflation. If you can take a bit of risk, go for balanced mutual funds. If you can't take risk there's always debt funds or bank account.

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Originally Posted by S_U_N (Post 4569408)

From this govt notification https://www.dacollege.org/GOs/index_...esindetail.pdf , it appears that you are eligible for interest :

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(11) From rule 9 and clarifications given below this rule it will be seen that
the subscriber, on maturity of the account, has the following three
options before him. He has to choose one out of these:-
(i) To close the account; or
(ii) To continue the account for any period without further deposits and
make one withdrawal in a year. The balance in the account will
continue to earn interest at normal rate till the account is closed.
There is no need to give in writing about this option to the Accounts
Office. This is automatic; or
15
(iii)To continue the account with usual annual deposits for one or more
block periods of 5 years without any loss of benefit. For this purpose
he should give his option in writing to the Accounts Office in Form H within one year form the date of maturity of the account. During each
block period he can make one withdrawal not exceeding sixty per cent
of the balance at his credit at the commencement of each block
period. This amount can be withdrawn either in one installment (one
Year) or in more than one installment in different years as per his
requirement not exceeding one withdrawal in a year. The account will
continue to earn interest till it is closed.

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Originally Posted by mxh (Post 4569516)

You will not get any interest since it has matured. Don't waste your money in PPF.. It grows at snails pace not even enough to cancel out inflation.

I think a PPF is an essential part of any portfolio. The returns are higher than an FD. It is very safe. It is the only instrument that is Exempt-Exempt-Exempt when it comes to tax. You also get 80C benefits. I would always advice everyone to max out PPF.

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Originally Posted by ranjitnair77 (Post 4569642)

It is very safe.

That is what I also believed till now. With entities like IL&FS having access to PF monies, nothing is certain. In fact I am skeptical about investing my hard earned money now - never know when the institutions declare themselves as bankrupt.

EPF is yet to deposit my 2017-18 interest :Frustrati

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Originally Posted by AltoLXI (Post 4569645)

That is what I also believed till now. With entities like IL&FS having access to PF monies, nothing is certain.

PPF is fully guaranteed by the Central Government which is as safe as it gets. You cannot get more certain than this. The only other instrument with the same level of safety is sovereign government bonds.

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Originally Posted by AltoLXI (Post 4569645)

nothing is certain. In fact I am skeptical about investing my hard earned money now - never know when the institutions declare themselves as bankrupt

Your skepticism is understandable (I'm concerned they'll try moving PPF to EET status again sometime in the future), but look at it this way. If things get to a point where government-backed financial instruments and institutions are staring at bankruptcy/insolvency, your money is probably not safe anywhere else domestically either, because monetary policy is ultimately the government's domain.

That's a risk none of us have a choice of opting out of.

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Originally Posted by ranjitnair77 (Post 4569676)

PPF is fully guaranteed by the Central Government which is as safe as it gets.

If the push comes to shove, nothing is guaranteed. :)

IL&FS was rated as AAA by the agencies. Today they say its NPA is at 90%.

Quote:

Provident and pension funds of thousands of middle-class salaried people face the spectre of losing thousands of crores of their nest egg as analysts estimate these funds’ investments in Infrastructure Leasing & Financial Services and group companies to be between Rs. 15,000 to Rs 20,000 crore, said three people familiar with the matter.

Link

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Originally Posted by Chetan_Rao (Post 4569697)

your money is probably not safe anywhere else domestically either, because monetary policy is ultimately the government's domain. That's a risk none of us have a choice of opting out of.

True. I started losing confidence on the robustness of the economy when the skeletons kept tumbling out in regular succession. If it so easy to loot and scoot, and the taxpayers have to bail out the banks, where is the trust factor?