The State Bank of India (SBI) Public Provident Fund (PPF) account is a secure, long-term savings scheme backed by the Government of India. It offers attractive interest rates and tax benefits, making it an ideal choice for individuals seeking financial stability and retirement planning.
SBI PPF Account Interest Rate (As of July 2025)
- Current Interest Rate: 7.1% per annum (compounded annually) .
- Interest Calculation: Interest is calculated on the lowest balance between the 5th and the last day of each month and is credited on March 31st every year.
Key Features of SBI PPF Account
- Tenure: 15 years, extendable in blocks of 5 years.
- Minimum Investment: ₹500 per financial year.
- Maximum Investment: ₹1.5 lakh per financial year.
- Deposit Frequency: Up to 12 installments per year or a lump sum.
- Tax Benefits: Investments qualify for tax deduction under Section 80C of the Income Tax Act. Interest earned and maturity proceeds are tax-free.
- Loan Facility: Available from the 3rd to the 6th financial year. Loan amount can be up to 25% of the balance at the end of the second year preceding the loan application year.
- Partial Withdrawals: Permitted from the 7th financial year onwards, subject to certain conditions.
- Nomination Facility: Available at the time of account opening or thereafter.
- Account Transfer: PPF accounts can be transferred between SBI branches or to other banks/post offices.
Eligibility Criteria
- Who Can Open: Resident Indian individuals.
- Minor Accounts: Parents or legal guardians can open an account on behalf of a minor child.
- Restrictions: Hindu Undivided Families (HUFs) and Non-Resident Indians (NRIs) are not eligible to open a new PPF account. However, NRIs who had opened a PPF account while being residents can continue it until maturity but cannot extend it further.
How to Open an SBI PPF Account
Online Method:
- Log in to SBI Internet Banking or YONO SBI App.
- Navigate to ‘Request & Enquiries’ > ‘New PPF Account’.
- Fill in the required details and submit the application.
- Visit your SBI branch within 30 days with KYC documents for verification.
Offline Method:
- Visit the nearest SBI branch authorized to open PPF accounts.
- Fill out Form A (PPF account opening form).
- Submit KYC documents, passport-size photograph, and initial deposit (minimum ₹500).
Deposit and Withdrawal Rules
- Deposit Modes: Cash, cheque, demand draft, or online transfer.
- Missed Deposit Penalty: If the minimum annual deposit of ₹500 is not made, the account becomes inactive. A penalty of ₹50 per inactive year, along with the minimum deposit of ₹500 for each missed year, is required to reactivate the account.
- Premature Closure: Allowed after 5 years for specific reasons such as higher education or medical treatment, subject to a 1% interest rate penalty.
Example: Building a Corpus with SBI PPF
Investing ₹50,000 annually for 15 years at an interest rate of 7.1% can yield approximately ₹13.56 lakh at maturity. This demonstrates the power of compounding and the benefits of disciplined, long-term savings.
Conclusion
The SBI PPF account is a reliable and tax-efficient investment option for individuals aiming for long-term financial security. With government backing, attractive interest rates, and tax benefits, it serves as an excellent tool for retirement planning and wealth accumulation.
For more information or to open an account, visit the SBI PPF page or contact your nearest SBI branch.
