4 MinsOct 11, 2021
A Public Provident Fund (PPF) account is a Small Savings Scheme that is guaranteed by the government. It offers a fixed rate of return (currently at 7.1%), which is announced quarterly. It offers tax exemption on investments up to Rs 1.5 lakh
annually under Section 80C of the Income Tax Act. Besides, the interest earned annually as well as the maturity amount is tax-free.
The PPF account has a lock-in period of 15 years. However, you can withdraw from the account for reasons such as medical emergency, your children's education, constructing or buying a house, etc. You can also avail of a loan against the PPF account.
But these facilities are available only for active accounts, where a deposit is made at least once a year.
What happens if you have missed making the mandatory PPF deposit? Your account will become inactive, though it will continue
to earn thePPF rate of interest. But if you want to enjoy the other benefits, as mentioned above, you need to active it. Let us see how to do it
When does a PPF account become inactive?
The minimum amount to deposit in their PPF account is Rs 500 every financial year. If you fail to do that, the account becomes inactive.
[Also Read: 5 Lesser-Known Rules for PPF Accounts]
How to revive an inactive PPF account?
- You have to send a written request to your bank or the post office branch where you have the PPF account.
- Once that is done, you have to deposit Rs 500 for every year that the account has been inactive, plus Rs 500 for the current financial year.
- You also have to pay a penalty of Rs 50 for every lapsed year. These deposits have to be made at the bank or the post office branch along with the application.
- After the application and cheque deposit is complete, the bank or post office branch will review your records. If the lock-in period of 15 years is complete the account can’t be reactivated.
Also, keep in mind that you cannot open another PPF account in your name if your current one is inactive.
PPF is one of the best investment avenues for long-term goals, such as saving for your children’s education or building a corpus
for your retirement. Invest in the PPF regularly and utilise the maximum tax exemption limit of Rs 1.5 lakh to maximise your benefits.
The Government of India has authorised Axis Bank to offer PPF account services to customers.
The advantage of opening a PPF account with Axis Bank is that you can invest online by linking your Axis Bank savings account and the PPF account. You can also view the balance as well as print statements. If you want to withdraw some funds
from your PPF account prematurely, speak to your Relationship Manager, who will help you with the process.
Know more about with Axis Bank PPF Accounts by visiting us online.
Disclaimer: The Source, a content creation and curation firm has authored this article. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.