Inactive PPF account: Here's how you can revive it

Public Provident Fund (PPF) is one of the most popular saving schemes by the central government that guarantees stable returns. A PPF account allows individuals to invest up to Rs 1.5 lakh each year and also provides a tax deduction under Section 80C of the Income Tax Act. Currently, it is the highest yielding small saving scheme with a 7.1% interest rate per annum.

The account has a validity of 15 years and the account holder is supposed to deposit a minimum of Rs 500 every financial year or the account can become inactive. And, you would not be able to get the benefits associated with it. Even the partial withdrawal facility that one can use after 5 years of account opening needs an active account. However, the amount in a PPF account continues to earn interest even while it is inactive.

Here are the steps to reactivate the account by following the steps mentioned below:

Written application

To revive the inactive PPF account, the account holder has to submit a written request to the bank or the post office branch where he has his PPF account. You can give the application any time during the 15-year tenure of the account.

Amount to be deposited:

The investor or account holder will need to deposit a minimum of Rs 500 for each financial year of the period when the account was inactive. You have to submit the cheque with the pending amount every year along with the application letter to the branch where you have your PPF account.

Penalty to be paid:

If you want to revive the account, then you will have to pay the fine to the bank or post office charges as the penalty of Rs 50 for each financial year in which the account was in an inactive state. The penalty needs to be deposited along with the payment of the above-mentioned arrears.

Approval of request:

Once the application is submitted, the bank or post office scrutinizes the application with their records, and if everything is clear then your account will get activated once again at the earliest. But, if the period of deposit (15 years) has passed, the account can’t be revived. However, you can get the maturity proceeds by paying the penalty at that time.