Investors are required to deposit a minimum of ₹500 in a financial year to keep their PPF account active. In failing to do so, investors get restricted from making further deposits and lose access to all the account benefits.
If your PPF account has lapsed due to non-compliance, it can be reactivated easily without losing the long-term benefits of this popular savings scheme.
What happens when your PPF account becomes inactive?
While an inactive PPF account continues to earn the government-declared interest, your tax-free withdrawal and loan rights are frozen until you revive the PPF account. You will not be able to make any fresh deposit, which makes you miss out on earning interest on additional contributions and ultimately lose the long-term benefits of compounding that regular investments would have generated.
How to reactivate a dormant PPF account?
The good news is you can easily revive your PPF account by paying the required minimum contribution and applicable penalties and submitting a simple request. Here’s a step-by-step guide on how to revive a dormant PPF account:
Step 1: Go to the branch from where you operate your PPF account; it can be a bank or a post office.
Step 2: Submit a written request for reactivation, stating you want to revive the PPF account.
Step 3: Pay the penalty amount, which is ₹50 for every year of inactivity.
Step 4: Deposit the minimum yearly deposit amount of ₹500 every year.
Step 5: In some cases investors are required to visit the branch of the PPF account once more to complete the verification process.
After completing all the formalities, your account will get activated at the earliest. You are also required to reactivate an account that has matured while being inactive by completing the process detailed above. The proceeds of the account will be blocked until the account gets reinstated.
(Edited by : Sudarsanan Mani)
