Public Provident Fund (PPF) is considered a reliable means of savings in India. There is a government guarantee in this, the returns are fixed and there is no tax. But a misconception still persists. Many people believe that if they open more than one PPF account, they can deposit more money than the annual investment limit and avail more tax benefits.
The rules clearly say that a person can open only one PPF account in his name. According to Public Provident Fund Scheme 2019, any person can open a PPF account by filling Form-1. But it is also clearly written that whether in a bank or a post office, only one account in the name of a person will be valid. There is no permission to open more than one personal PPF account in this scheme. Apart from this, joint account is also not allowed in PPF. All these rules are given on the official website of National Savings Institute under the Finance Ministry.
There is no benefit in opening accounts in different banks
If a person opens PPF accounts in different banks or post offices, he will not get any additional benefit. PPF account is linked to PAN. Therefore, at the time of verification or maturity, it may be revealed that there is more than one account. If more than one account is found, the additional account may be considered false. The amount deposited in such an account can be returned without interest and only one account will be allowed to continue.
PPF account for minor
As per the rules, a person can open a PPF account for his minor child or a mentally handicapped person for whom he is the guardian. But only one PPF account can be opened in the name of a child. That means the other parent cannot open a separate PPF account in the name of the same child.
No change in annual investment limit
As per the rules of the scheme, the minimum deposit is Rs 500 per financial year and the maximum deposit is Rs 1.5 lakh per financial year.
The important thing is that this limit of Rs 1.5 lakh is applicable in aggregate. The objective of the PPF scheme is to promote long-term disciplined savings. Therefore, a fixed limit for investment has been kept in it. Allowing only one account for one person prevents misuse of tax benefits and keeps the scheme simple. If an investor wants to save more than the PPF limit, he will have to invest money in other long-term investment options.
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