Has your PPF account been inactive for years? What happens to the money in the account—will it stop earning interest?

The Public Provident Fund (PPF) is currently one of the country's most popular small savings schemes. People invest heavily in it due to the assurance of safe returns and tax benefits. A key feature of this government scheme is that you can keep it active with a minimum annual investment of just ₹500.

However, amidst the hustle and bustle of life, we sometimes forget to deposit money on time, causing the account to become inactive (dormant). If this has happened to you, there is no need to worry; reactivating it is very easy.

Do you earn interest on a dormant account?
If your PPF account has become inactive for any reason, do not panic. You will continue to earn the government-mandated interest on the amount already deposited in your account. However, there are other downsides to the account becoming inactive—for instance, you cannot take a loan against it or make partial withdrawals.

How can you reactivate your PPF account?
To revive your dormant PPF account, you need to follow the steps below:

Visit the bank or post office where you originally opened your PPF account.
Submit a written application to reactivate the account.
To reactivate the account, you must make the minimum investment for each year the account remained inactive (the minimum investment for PPF is ₹500).
Pay the penalty fee for each year of inactivity along with the investment amount (₹50 per year).

Once this is done, your account will be reactivated, and you will be able to continue investing in it.

For example: If your account has been inactive for 4 years, you will need to deposit the minimum investment for 4 years (₹2,000) plus the penalty (₹200, calculated at ₹50 per year), making a total deposit of ₹2,200. After this, your account will become active again.

Can a PPF account be closed before the 15-year tenure ends? Although the standard maturity period for a PPF account is 15 years, under certain specific circumstances, you can close the account prematurely after the completion of 5 years and withdraw the entire amount:

1. Treatment of a serious illness
In the unfortunate event of a medical emergency requiring urgent funds for the treatment of yourself, your spouse, or your children, the account can be closed after 5 years.

2. Children's higher education
The account holder can close the account and withdraw the funds after 5 years to finance their own higher education or the college/higher education of their children.

3. Relocation abroad
If you are permanently relocating from India to another country, you can close your PPF account and withdraw the entire accumulated amount.

4. Death of the account holder
If the account holder passes away, the account is closed before maturity. In such cases, the nominee or legal heir is not permitted to continue the account; instead, the funds—including interest accrued up to the end of the month preceding the closure—are handed over to them.

Disclaimer: This content has been sourced and edited from Dainik Jagran. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.