PPF account earns interest even if it becomes inactive. Here’s how to revive it

PPF account matures in 15 years and the account holder is required to deposit a minimum of Rs 500 every financial year to keep the account active.

New Delhi: Public Provident Fund (PPF) is one of the most popular investments in India which is used for creating long term savings. One can invest up to Rs 1.50 lakh in a PPF account per annum and get income tax deduction under Section 80C of the Income Tax Act 1961. Being a central government scheme it offers guaranteed return which is higher than the return on other comparable products. The account matures in 15 years and the account holder is required to deposit a minimum of Rs 500 every financial year to keep the account active. Failure to deposit this amount leads to the account being designated as inactive. It may be noted that even if a PPF account becomes inactive it continues to earn interest but you can not avail other benefits like loan if your PPF account becomes inactive.

If your PPF account has become inactive you can reactivate the account by following the below-mentioned procedure.

1) Submit written application

For revival of the inactive PPF account, the account holder needs to submit a written request to the bank or the post office branch where you have opened the account. The application can be made any time during the 15 year period of the account.

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2) Make minimum deposit along with penalty

The investor will be required to deposit a minimum of Rs 500 for each financial year of the period when the account was inactive. Along with this, you have to pay a penalty of Rs 50 for each financial year in which the account was inactive. The cheque needs to be submitted to the branch along with the application.

3) Process

After you submit your application, your bank or post office will scrutinise the application to see if the 15 year period has elapsed. On successful verification your PPF account will be reinstated. However, if the 15-year tenure has elapsed, the account cannot be revived. But in such a case, the account holder can take the maturity proceeds by paying the penalty mentioned above.