Public provident fund scheme is introduced by government of India so as give benefits to the people as well as banks besides increasing the public funds available to government.
I recently tried to get an ICICI basic savings accont which claims to give a savings account with all the facilities like debit card, internet banking etc with Rs. 0 (zero) minimum deposit.
On contacting a branch manager, he said the basic savings account is available if one opens a PPF i.e Public Provident Fund scheme.
This PPF scheme seems to be quite interesting and also beneficial.
Public Provident Fund account has benefits like
1. It encourages any one to start savings every month with nominal amounts like 1500/month. Then after yearly at-least a minimum of Rs. 1000 has to be paid.
2. It offer higher interest rates. At present, the public provident fund interest rate 2013-14 is 8.5%. So the interest rates are higher than normal savings accounts which is interesting to start one.
3. It also has tax benefits. Any one maintaining a public savings account has a tax wavier for Rs. 1 lakh per annum. So it is a good way to save money by getting exemption from paying taxes.
4. Private banks like ICICI sort of banks provide zero balance account if one maintains a PPF. These banks have better service than government banks like ability to make online payments with their debit card etc.
Presently only ICICI and AXIS bank have debit cards by which one can make purchases online securely through paypal.
Public Provident Fund scheme:
1. This scheme offers one to make savings on monthly basis with minimum of Rs. 1500/ month for 18 months.
2. There after one can pay yearly once of amount Rs. 1000.
3. One can avail tax benefits if one has a public provident fund account by saving money for an amount of not more than Rs. 1,00,000.
Public Provident Fund India is offered by few banks like ICICI, SBI etc.