PPF Account Frozen? Here Are The Steps To Reactivate Your Account
There is a difference between inactive accounts and deactivated accounts. The procedure to revive these accounts is also different.
If you have forgotten to deposit into your Public Provident Fund, you could be missing out on the interest soon. A PPF account can get frozen or become inactive if one fails to pay minimum subscription of Rs 500 per year.
One can check the status of the account if they have missed the payments into the PPF accounts. However, there is a difference between inactive accounts and deactivated accounts. The procedure to revive these accounts is also different.
Inactive Account
An account becomes inactive when no deposit has been made for up to one year. These accounts will continue to gain interest for this period if deposits are made again.
The procedure to revive an inactive account is simple. The account holder will have to resume making deposits into their PPF account again. A deposit between Rs 500 and Rs 1.5 lakh can be made into the account, to activate the account again.
The account will remain active if the yearly deposits are continued.
Dormant Account
An account becomes dormant if the minimum amount is not paid for two consecutive years. In this case, these accounts will not be given interest and the procedure to reactivate the account is also different.
The account holder will have to write a letter to the bank branch or post office where they have the PPF, requesting for the reactivation of the account.
After this, they will need to deposit Rs 500 for every year the account had remained inactive, including the current financial year. There is also a fine of Rs 50, that is charged on every year that the account was inactive.
The payment of deposits and the fine can be done along with the filing of the application at the bank or the post office. This application is reviewed and the frozen account is made active again after the payment is processed.
More Details
Other conditions are that if one has an inactive PPF account, they are not permitted to open another PPF account.
The interest rate of 7.1% that is earned on PPF deposit, is fully exempt from tax, under Section 80C. This interest will be withheld from accounts that have not paid the minimum subscription amount.
A PPF account has a 15-year lock-in period but withdrawals can be made for certain exceptions like medical emergencies, children's education, along with a few others.
