Can PPF investors have more than one account? Know what the rules say?
PPF is a government-backed savings scheme designed for long-term investment. It ensures your money is safe, earns fixed interest, and offers tax benefits.
The Public Provident Fund (PPF) is considered a reliable savings instrument in India. It's government-guaranteed, offers fixed returns, and is tax-free.
However, a misconception persists: many people believe that opening multiple PPF accounts allows them to deposit more than the annual investment limit and receive greater tax benefits.
The rules clearly state that an individual can open only one PPF account in their name. According to the Public Provident Fund Scheme 2019, anyone can open a PPF account by filling out Form 1.
However, it is also clearly stated that only one account will be valid in a person's name, whether at a bank or a post office. Opening multiple personal PPF accounts is not permitted under this scheme.
Furthermore, joint accounts are also not permitted under PPF. These rules are provided on the official website of the National Savings Institute, under the Ministry of Finance.
There is no benefit in opening accounts in different banks
Opening PPF accounts at different banks or post offices will not provide additional benefits. PPF accounts are linked to PANs. Therefore, multiple accounts may be detected during verification or maturity.
If multiple accounts are found, the additional accounts may be considered invalid. Deposits in such accounts may be refunded without interest, and only one account will be permitted to continue.
PPF account for minor
According to the rules, an individual can open a PPF account for their minor child or a mentally incapacitated person for whom they are the guardian.
However, only one PPF account can be opened in the name of a child. This means that another guardian cannot open a separate PPF account in the name of the same child.
There is no change in the annual investment limit.
According to the scheme's rules, the minimum deposit is ₹500 per financial year and the maximum deposit is ₹1.5 lakh per financial year. Importantly, this ₹1.5 lakh limit applies overall.
The PPF scheme aims to promote disciplined long-term savings, and therefore, has a fixed investment limit.
Allowing only one account per person prevents misuse of tax benefits and keeps the scheme simple. If an investor wishes to save more than the PPF limit, they will need to invest in other long-term investment options.