FAQs on PPF account transfer

Public provident fund (PPF) has been one of the popular way under small savings scheme to plan for retirement and tax savings. It has been the magical box that spurns up the compounding magic on the nominal annual savings made by an individual over years. However, with the downtrend in Government securities, the PPF rates too have been following the negative trend too. It has been reducing at regular intervals. 

Start Year	End Year	Rate of Interest
2010	2011	9.5%
2011	2012	8.6%
2012	2013	8.8%
2013	2014	8.7%
2014	2015	8.7%
2015	2016	8.7%
2016	2017	8% (As announced in Oct 2016)

However, we still maintain that PPF account that have completed or nearing completion its cycle of 15 years as on date, should not be discouraged to invest their 80C investment in PPF. The compounding effect would be huge on the entire corpus.

Our discussion today surrounds on the operational process to transfer a PPF account from one bank to another or from post office to banks. 

Why do individuals usually transfer PPF accounts?

The main reasons for this transfer are:

a) Convenience of nearby branch.

b) Hassles of depositing funds offline: visiting branch during regular working hours.

c) Managing multiple bank accounts. 

d) Change of Location

Process of transferring the PPF accounts

a) Make a written application to the bank or post office where the investor has his PPF account for transfer.

b) Submit along with it the PPF transfer form. The form would contain details of the account, including the names and addresses of the existing branch/bank/post office where it is held. It would require filling in details about the desired location where the transfer is sought.

c)  On receiving the application, a simple process of detail verification is done along with verifying the signature of the account holder with the existing account papers.

d) If all the details are correct, then the bank or post office closes the PPF account.

e) After that the old bank would send a cheque/ demand draft for the outstanding balance in the account to the new bank/post office. They are also responsible to send along a certified copy of the account statement, original account opening form, nomination details and specimen signature.

This account of PPF account is considered to be a continuing account, not a new one. The new bank may ask the customer to redo his KYC process. Also, it is advised to keep a photocopy of past PPF passbook.

During this transfer, the account holder can change the nomination details, along with the account opening procedure.

The new passbook would be issued and it should reflect the past credit records in the account shown as a balance transfer. You can make a small transaction to ensure that all the procedure is correctly followed.

Our Opinion:

PPF is for long term investment and the small term hiccups should not discourage you to close down your PPF account. It is advised to never miss your investment boat for small changes.