Transferring PPF Account: The National Savings Institute of the Ministry of Finance in 1968 introduced a savings and tax savings instrument in India that is called the Public Provident Fund, or the PPF. This article will talk about transferring the PPF account, how this can be done, what it means, and how long it takes. All related issues will be addressed further in the article.
Why Transfer the PPF Account?
There are several reasons why one would need to transfer the PPF account. Here are a few:
- One reason is when there is a change of cities. When our parents or we open a PPF account in one place and then have to shift cities because of a marriage or job opportunities, we would need to either open an entirely new account or update the address that is given in the financial accounts like the Demat account, credit cards, and bank accounts.
- When investment is begun, it is usually done based on the suggestions and advice given by our friends and relatives. And we often do not consider future technological advances, such as how ten years ago or so, net banking wasn’t common, and so it didn’t matter if the PPF account was opened in the bank or the post office. And so, many opened their PPF accounts in the post office. But since banks today offer the convenience of not only viewing the PPF balance but also helps in transferring funds from savings accounts that are linked, and all this done online through net banking, it makes sense to shift from the post office to a bank. This way, the banks enable the online transfer of money to the PPF accounts through net banking, which is a far easier experience.
Process of Transfer of PPF from a Bank or Post Office
The Public Provident Fund of the Government allows subscribers to transfer the PPF account from one post office to another and from one authorized bank to another. There is no difference in the procedure of transferring the account if it is in the post office of the bank. But it is important to note that while transferring, one has to close the existing account and open a new PPF account. The new one will be considered the continuing account, and there is no interest that will be lost.
The process of the transfer is as is given:
- The PPF passbook needs to be updated, and that all the interest accrued till then has all been credited duly.
- Approach the post office or the bank where the PPF account is and make an application for the transfer of the PPF account to the particular bank branch you are looking to transfer. If you’re going to the post office, as that is where the account is, you need to use the SB 10 (b) form instead of the application form that is needed at the bank. Here, the application will need all the details of the account, the transfer location sought, and the names and addresses of the bank branch or the post office where the account is currently.
- After processing the application, the existing post office or bank will send the original documents as the certified copy of the PPF account, along with the specimen signature, nomination form, account opening application, etc. to the address of the bank branch as is given by the customer with the DD or the cheque for any outstanding balance that is in the account.
- After the transfer of documents is done and the bank branch specified has received it, the individual will need to submit
- A fresh set of documents for the KYC as they are for the document and they need to be submitted even in the person already as an account in the bank.
- The original passbook as the new one will be issued with all the past credit that will be seen as balance transfer.
- A new form for opening the PPF account.
- Nomination is important if it hasn’t been done before or the nomination needs to be changed.
Once the transfer is done, it is important to note that the PPF account will not be considered as a new account but as a continuing account. However, a new passbook and a new account number will be issued, with the former showing the balance transfer that would be the past credit. Before submitting the old PPF passbook, it is recommended that you take a copy of it as this can be needed later on to do things like keep track of earlier transactions, claim an income tax deduction, etc.
The entire process may take about two to three weeks which means that it is recommended that you check the status yourself by visiting the bank branch or the post office where the transfer was applied for. The photocopies of the forms and documents needed to be submitted should also be carried.
Is Interest Lost on Transfer?
As already mentioned, the answer is no; no interest is lost on the transfer of the PPF account. The PPF interest, while it may be credit annually, is calculated on a monthly basis. Annually means that once during the financial year. This means that if you have a PPF account in the financial year 2017-2018, that is, 1st April 2017 to 31st March 2014, the interest that is accumulated till the 31st of March in 2018 will be credited to the account by the second week of April 2019. Interest is always added at the closing of the financial year and not in the middle of the financial year.
What is to be done if the Interest is not Credited During Transfer?
The first step of action that needs to be taken in such a scenario is to complain to the bank in writing. Keep a record of all the letters and emails that are sent, and if that doesn’t work:
- File an RTI – Right to Information
- The Banking Ombudsman is to be written to.
Right to Information (RTI)
The purview of the RIT extends to all the institutions of the government. Any citizen can request a public authority, that is, a body of Government or instrumentality of State, for information, under the provisions of this Act. They are required to reply within the time frame of thirty days. The Act would also need every public authority to keep computer records to have wide dissemination and also for specific categories of information so that the citizens have a minimum recourse when it comes to requesting formally for information. This law was passed in 2005, on the 15th of June, and was brought to full force on the 13th of October in the same year. The process for filing is as simple as filing the application on paper and sending a fee of ₹10, which is to be done by money order.
Banking Ombudsman
The Reserve Bank of India is the one who appoints the Banking. This is a senior official that redresses any complaints from customers about deficiencies in banking services; the country has 15 of these offices. The complaints can be made against the deficiencies in the banking services, and this includes internet baking, ATM, and credit cards. This scheme also covers scheduled primary co-operative banks, regional rural banks, and all scheduled commercial banks. Individuals can file complaints to the Banking Ombudsman if the bank doesn’t reply within one month after receiving the representation, or if the complainant isn’t satisfied with the reply, or the complaint is rejected.