How to Reactivate an Inactive PPF Account?

The Public Provident Fund (PPF) is a savings-plus-tax-savings mechanism that has become one of the most popular ways to build long-term savings. PPF strives to mobilise small deposits by combining a respectable return on investment with income tax advantages. Since PPF is a government-sponsored programme, it provides a guaranteed return that is higher than that of other low-risk investments. Depositors must make a minimum deposit of Rs 500 in a financial year to keep the account open, and the account has a 15-year term. If the depositor does not make any deposits, the account will become dormant.

How Does an Account Become Inactive?

Your account will become inactive if you do not make at least the minimum deposit amount in any year of your PPF term. If you've invested in a variety of options, it's simple to lose track of a financial instrument. Due to the fact that not paying the deposit in any given year might occur for a variety of reasons, the authorities have made it simple to reactivate a dormant PPF account.

How to Reactivate an Inactive PPF Account?

Here's how to reactivate your dormant PPF account.

• Submit an Application 

For the resurrection of an inactive PPF account, all account holders must submit a written application to the location where the account was opened, which could be a bank or a post office branch. The application for account revival can be submitted at any moment during the account's 15-year lifespan. Along with the written application, a check must be submitted to the branch.

• Pay Penalties 

To reactivate an inactive PPF account, depositors must make a minimum deposit and pay the penalty for late payments. For each financial year during which the account was dormant, account holders must deposit a minimum of Rs 500. In addition, for each financial year in which the account was inactive, a penalty of Rs 50 will be applied.

• Verification 

The bank or post office will examine the application to see if the PPF account is still active or if the 15-year term has expired since the written application was submitted. On successful verification, the PPF account will be reinstated if it is within the term.

What Happens if the Term Expires Before Revival?

If the 15-year term has expired, the account will no longer be revived, but the account holder can obtain the maturity proceeds by paying a penalty of Rs 50 for each financial year the account was dormant. Moreover, a discontinued account holder will not be allowed to open a new account until the discontinued account has been closed upon maturity.

Endnotes 

After reactivating a public provident fund (PPF) account, a depositor can continue to make deposits and withdraw once every fiscal year, up to a maximum of 60% of the balance at maturity in a 5-year period. Hence, it is always recommended to revive your inactive PPF account without any delay to enjoy maximum benefits. 

Also read: 

Understanding PPF And Its Benefits

Are Mutual Funds A Good Choice Of Investment?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.