PPF Account: How do you reactivate a dormant PPF account? Understand the process..

Public Provident Fund (PPF) is a popular long-term savings and investment option. It not only provides good returns over the long term but also offers tax benefits. You can invest a minimum of ₹500 and a maximum of ₹100,000 annually in PPF. A minimum balance is required to maintain the account for 15 years. However, if you fail to make the minimum annual deposit of ₹500, the PPF account is discontinued. However, it's a good thing that a discontinued PPF account can be reactivated at any time.

Why is revival necessary?

1. Loans and partial withdrawals are discontinued

After discontinuation, you can neither take out loans nor make partial withdrawals. These benefits are available only when the account is reactivated.

2. Maturity benefits are not fully received.
If the account is closed, you receive only the deposit amount and simple interest upon maturity. Upon revival, you receive the full benefit.

3. Loss of Tax Benefits
Only an active PPF provides Section 80C tax benefits.

How to revive a closed PPF account?
The revival process is quite simple. Follow these steps:

Step 1: Visit your bank/post office branch - you must go to the branch where the account was opened and request revival.

Step 2: Fill out the revival form - A PPF revival form is available at the branch. You must enter the account details and outstanding deposits.

Step 3: Deposit the outstanding minimum deposit - you must deposit ₹500 for each year the account was closed.

Example: If the account has been closed for 3 years - 3 × 500 = ₹1500

Step 4: Pay the penalty - A penalty of ₹50 is also required for each closed year. Therefore, a penalty of ₹150 is required for 3 years. This means a total deposit of ₹1650.

Step 5: Submit documents - Along with the application form and payment slip, you may also need to submit other necessary documents, such as a copy of your PPF passbook, identity proof, and address proof. However, in most cases, just the passbook and form are sufficient.

Step 6: Update the passbook - After revival, it is important to update the new status and entries.

Important points regarding revival
There is no time limit for reviving a PPF. You can do so at any time before maturity.

If a PPF has matured and has not been revived, it cannot be extended.

Even on a discontinued account, interest continues to accrue at the PPF rate.

This can only be done by visiting a branch.

What happens after PPF maturity?
If the account is active, you can extend it after maturity in two ways:

Without contributions (Silent Mode)

With annual contributions (Continuation Mode)

However, if the account is closed, no extension is available.