PPF Account- How to Activate a Dormant PPF Account?

The Public Provident Fund (PPF) is a traditional method of saving that is especially popular among the salaried class. The PPF scheme is extremely beneficial to the general public. It currently pays 7.1% per year in interest, which is significantly higher than fixed deposits at banks. PPF pays a higher interest rate than 5 year FD, National Saving Certificate, and Time Deposit Scheme. In such a case, investing in it allows you to save taxes while also earning higher returns. So, if your PPF account has been closed for any reason, reopening it is a simple process.

What is a PPF account?

The Public Provident Fund (PPF) account is a popular long-term investment option for people seeking low risk, high returns, and tax advantages. PPFs are used by investors to build a retirement corpus by putting money aside on a regular basis over long periods of time (PPF has a 15-year maturity, and the facility to extend the tenure).

Features-

• The minimum term for a PPF is 15 years. Investors who wish to continue their PPF investment can do so for another five years.
• Individuals can begin contributing to the PPF scheme with a minimum investment of Rs 500 and a maximum investment of Rs 1,50,000 per fiscal year.
• Investments in the Public Provident Fund can be made in either a lump sum or in instalments. You must pay at least once per year or in monthly instalments. Payment is made for 15 years or as long as the PPF investment is maintained.
• You can deposit money in a variety of ways, including cash, check, DD (Demand Draft), or money/fund transfer.
• You can name a nominee for your Public Provident Fund account, but only one person can do so. A PPF account cannot be held jointly, and HUFs cannot hold a PPF account.

How to reactivate you PPF account?

• The account holder must make a written request to the bank or post office branch where the account is located to have an inactive PPF account revived. The application can be made at any time during the account's 15-year lifespan.
• The investor must deposit a minimum of Rs 500 for each fiscal year during which the account was inactive. Along with the application, the cheque must be delivered to the branch.
• To reactivate the account, the bank or post office charges a penalty of Rs 50 for each fiscal year the account was inactive. The penalty must be deposited along with the arrears payment.
• Once the application is submitted, the bank or post office checks it against their records. The account cannot be revived if the deposit period (15 years) has expired. However, the maturity proceeds can be accessed by paying the penalty.