Public Provident Fund (PPF) account is one of the most popular small saving schemes by the Government of India. Currently, it is holding an interest rate of 7.1 percent per annum making it one of the highest yielding schemes. Although the maturity period of this account is 15 years, an account holder can still withdraw money after five years (subject to terms and conditions). For depositing and withdrawing money, it is important that your PPF account remains active.
When does a PPF account become inactive?
An account holder can deposit a minimum of Rs 500 and a maximum of Rs 1.5 lakhs in his PPF account per year. If the account holder is not able to pay the minimum amount of Rs 500 every year, the account becomes inactive.
How to make a PPF account active again?
SEBI registered tax and investment expert Jitendra Solanki spoke about how to activate an inoperative PPF account and told Mint, "To activate an inoperative PPF account, one needs to deposit ₹500 for each non-deposit years and a penalty of ₹50 for each such years".
It is possible that due to unforeseen circumstances, an account holder is not able to deposit money in his PPF account. It is also possible that the account holder forgot to deposit the money. Since these circumstances will make the account inoperative, it is necessary to follow these steps to make it active again:
- Submit a written application to the Bank requesting them to make your dormant PPF account as active again
- Rs 500 is to be paid for each inactive year
- For every inactive year, a penalty of Rs 50 is charged
- To complete the process, visit the PPF account branch once again
Even if your PPF account remains inactive, it will continue to generate interest till its maturity but you will not be able to claim loans against such dormant accounts. Also, premature withdrawal (before 15 years) will not be allowed.
from Firstpost India Latest News https://ift.tt/32XaJlC
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