The Public Provident Fund (PPF) is one of India’s most trusted long-term savings options. Backed by the Government of India, it is popular for its tax benefits, steady interest and safety. But many investors often wonder, i.e., can you open more than one PPF account to save more?
Here’s a simple explanation of what the rules allow.
WHY PPF IS SO POPULAR
PPF is a long-term savings scheme with a 15-year lock-in period. You can invest a minimum of Rs 500 and up to Rs 1.5 lakh in a financial year.
The biggest attraction is that the investment, the interest earned, and the maturity amount are all tax-free. After 15 years, you can withdraw the full amount or extend the account in blocks of five years and continue earning interest.
Because of these benefits, some people think of opening more than one account in their name.
CAN YOU OPEN MORE THAN ONE PPF ACCOUNT?
As per the Public Provident Fund Act, 1968, an individual can open only one PPF account in their own name. This rule applies across banks and post offices.
According to the National Savings Institute, “Only one account can be opened in one name. If two accounts are opened by the subscriber in his name by mistake, the second account will be treated as irregular account and will not carry any interest unless the two accounts are amalgamated with the approval of the Ministry of Finance (DEA).”
It further says, “For this purpose the subscriber will have to write to the Under Secretary-NS Branch MOF (DEA), New Delhi-1 through the Accounts Office giving detail of each account.”
WHAT HAPPENS IF YOU DO NOT MERGE THEM?
If the accounts are not merged, the additional account will have to be closed. In that case, only the principal amount deposited in the extra account will be returned. Any interest earned on that second account will not be paid.
Simply put, PPF remains a safe and tax-efficient way to build long-term savings. However, the rule is clear, i.e., one person, one PPF account.
If you wish to invest more, you can use other savings options, but opening multiple PPF accounts in the same name is not allowed under the law.
