Public Provident Fund (PPF) is among India’s most common funds and is used for long-term savings accumulation. PPF deposits have a term of 15 years and the depositor is allowed to make a minimum Rs 500 deposit in a financial year in order to keep the account operating. The failure to make the deposits on time allows the account to be deemed dormant. Studies indicate that many persons struggle to keep depositing the minimum necessary amount for such a long tenure, because of which many accounts have been made dormant. PPF scheme backed by the government, but it provides assured returns that are better than most low-risk products’ returns.
Through PPF, an individual can deposit up to Rs 1.50 lakh in their financial year account and claim income tax deductions under Section 80C of the 1961 Income Tax Act. The grab with PPF investment, though, is that it always receives interest even if the account holder fails to make the annual deposit and the account remains inactive. For depositors with dormant accounts, they will not be able to take advantage of such advantages, such as a loan from their PPF account, even if they still continue to gain interest.
How To Activate PPF Account?
Malfunction to deposit the required amount of Rs 500 per fiscal year results in the ‘inactive’ status of the PPF account. By following the steps described below, one can reactivate the account.
File written request: The account holder has to submit a written application to the bank or post office branch where he or she has opened the account to restore the dormant PPF account. During the 15 year duration of the account, the application can be made at any time.
Deposit the minimum amount with penalty: For each financial year, the investor will be allowed to deposit a minimum of Rs 500 for the duration wherein the account was dormant. With this, for each financial year in which the account was dormant, you must pay a penalty of Rs 50. It is necessary to submit the cheque along with the application to the branch.
Process to submit the application: Your bank or post office will assess the application after you submit your application to see if the 15 year period has expired. Your PPF account will be restored following successful verification. The account will not be reopened, however, if the 15-year tenure has expired. Although in such a situation, by paying the penalty listed above, the account holder can take the maturity proceeds.
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