Public Provident Fund: How To Retrieve A Dormant PPF Account?
Looking to retrieve your inactive PPF account? Read on to know the steps to reactivate your PPF account.
Government-guaranteed saving schemes include Public Provident Fund (PPF) accounts. It provides a fixed rate of return, which is released every quarter and is currently 7.1%. Under Section 80C of the Income Tax Act, investments up to Rs 1.5 lakh per year are tax-exempt. Additionally, both the annual interest and the maturity sum are tax-free.
Your PPF account usually has a 15-year lock-in term. You may, however, remove money from the account for things like a sudden medical need, purchasing a home, etc. You may also apply for a loan secured by your PPF account. However, these services are only accessible for active accounts with at least yearly deposits.
Also read: Public Provident Fund: Features And Benefits
As per the rules, an inactive account will continue to earn you interest until it matures, but there are drawbacks to such accounts as well. One drawback is that you can no longer claim loans against your PPF account, which could be problematic if you anticipate needing money soon. Additionally, you won't be able to make an early withdrawal until you reactivate the account.
When Does Your PPF Account Become Inactive?
Your PPF account will be deemed inactive if the required minimum deposit of Rs. 500 is not made each financial year. Therefore, to take full advantage of the benefits of an active PPF account, you must activate it first.
Let's examine the procedure in further detail –
How To Retrieve A Dormant PPF Account?
The process to retrieve a dormant PPF account entail:
You must first submit a written request to the bank or post office branch where the account is located.
The application may be submitted at any moment during the account's 15-year lifespan.
For each fiscal year the account remained dormant, make a minimum deposit of Rs. 500.
For every financial year that the account was inactive, the bank or post office will also levy a penalty of Rs. 50. These deposits must be made at the post office or bank branch along with the written application.
Following submission, the bank or post office examines the application using its records.
The account cannot be reopened after the time of deposit (15 years) has passed. However, by paying the penalty, one can obtain the maturity proceeds.
Note: Keep in mind that if your current PPF account is inactive, you are not permitted to open another one in your name.
To Put It Simply
Your account will be enabled as soon as the necessary procedures have been completed. By following the steps outlined above, you can also reactivate an account that has matured while being inactive. The account's earnings will be frozen until the account is reactivated.