What happens if I don't deposit money in PPF account? (2024)

What happens if I don't deposit money in PPF account?

Once the account is continued without deposits for more than a year, the account holder shall not have the option again to continue the account with deposits. This option has to continue the account with balance has to be exercised within one year from completion of five years.

What happens if minimum amount is not deposited in PPF?

500 altogether it will lead to account deactivation. In such cases, you can reactivate the account by paying a penalty of Rs. 50 plus Rs. 500 for each year you have missed the minimum PPF payment amount requirement.

What happens if I stop putting money in PPF?

When you fail to pay the minimum subscription amount of Rs.500 in a financial year, the account will be treated as discontinued, but it will not be closed. In such cases, you cannot obtain a loan or withdraw the PPF amount unless the PPF account is revived.

What happens if I don't extend my PPF account?

Deposits placed into PPF accounts after the 15-year window has passed without exercising the option to keep the account open will not be eligible for the tax benefits provided by Section 80 C of the Income Tax Act.

Is it mandatory to deposit money in PPF account every year?

Deposit frequency: There is no limit on deposit frequency. You can make any number of installments. However, making at least one contribution per year is mandatory to keep your PPF active. Opening balance: You can open a PPF account with a minimum opening balance of Rs 100.

What is the penalty for PPF account in SBI?

Step 1: Submit a written letter requesting to reactivate PPF account to the SBI bank branch where you have opened your PPF account. Step 2: Pay a minimum amount of Rs. 500 for each year you have not made any contributions along with the penalty of Rs. 50 per inactive year.

How can I know my PPF account is active or not?

Offline method: Visit the nearest bank branch at which you have opened PPF account. Online method: By logging in to your bank account you will have access to all the details. The present balance, the interest that has been earned, and the deposits that have been made can be checked by using net banking.

What are the disadvantages of PPF account?

Lack of liquidity: While the PPF provides security, it lacks liquidity. Partial withdrawals are only allowed after completion of the sixth year, and the maximum amount that can be withdrawn is subject to specific rules. In situations where you require immediate access to your funds, the PPF may not be the ideal option.

What will happen if I deposit more than 1.5 lakh in PPF?

The current income tax laws allow maximum tax break of Rs 1.5 lakh per individual per financial year under section 80C of the Income Tax Act. What happens if you invest more than Rs 1.5 lakh? "Amount beyond Rs 1.5 lakh cannot be deposited in the PPF account as the transaction will be rejected at the time of transfer.

How can I exit PPF early?

So, technically, premature withdrawals are possible only from the 7th year of making the investment. For example, if you make your first PPF investment in August 2023, you can make a premature withdrawal only after April 1, 2029. There are some other requisites as well.

Can NRI continue investing in PPF?

As an NRI: You can continue to invest in the existing PPF Account, i.e., the account opened when you were a Resident Indian. You cannot open a new PPF Account after becoming a Non-Resident Indian. You must close the account after the 15 years maturity period.

What happens after 15 years of PPF?

Public provident fund: After the 15-year maturity period, an investor can extend their PPF account in five-year blocks for an infinite number of times. Public provident fund or PPF account is a Government of India or GoI-backed small saving scheme, which is hundred per cent risk-free.

Can an NRI open a PPF account?

Yes, an NRI can have a PPF account in India. However, the PPF account must have been opened while the person was still a resident of India. An NRI can only have a PPF account if they opened it as an Indian resident and prior to becoming an NRI.

Which is better LIC or PPF?

Tenure: PPF has a minimum tenure of 15 years. LIC policies have a flexible tenure, which can be chosen by the customer. Returns: LIC policy offers lower returns of about 4 to 6 per cent. On the other hand, the PPF interest rate is 7.1 per cent annually right now.

Can a person have 2 PPF accounts?

No. Only one PPF account can be maintained by an individual, except for an account that is opened on behalf of a minor.

What is the best month to invest in PPF?

Therefore April is the best month to invest in PPF since that will always give the highest interest. However, over a 15-year period, the difference between investing ₹1.5 lakhs/year and investing ₹12,500/month is only ₹40.68 lakhs minus ₹39.45 lakhs or just ₹1.23 lakhs.

What happens if I deposit 1 lakh in PPF account?

Public Provident Fund Calculation Formula

Assuming you deposit an annual amount of Rs. 1 lakh in your PPF account for a period of 15 years at an interest rate of 7%, then the maturity amount on completion of PPF tenure will be equal to Rs. 28.82 lakh.

What happens to SBI PPF after 15 years?

As the rate of interest on PPF is 7.10% which is quarterly reviewed, it allows the person to have certain allocation on Fixed Income investment. After 15 years, a person can extend for a block of 5 years with fresh deposits or without fresh deposits. The extension allows an early withdrawal option but with limits.

Which bank is best for PPF?

When can I stop my PPF account?

As mentioned above, the PPF account matures after a term of 15 years. On maturity, you can withdraw the entire corpus. For this, you will have to submit a duly filled Form C at the bank branch or post office where you have your PPF account.

How can I unfreeze my PPF account?

When can a PPF account be closed?

How risky is PPF?

Risk-free, guaranteed returns: The Public Provident Fund is backed by the Government of India. So, one of the most significant PPF account benefits is that it is entirely risk-free. The returns, too, are guaranteed by the government.

Which is better PPF or FD?

While PPF scores high on long-term wealth accumulation, FD brings flexibility and liquidity to the table, catering to short-term needs. This is because PPF has a minimum investment duration of 15 years while FDs offer far more flexible options.

Is it worth putting money in PPF?

The current interest rate for Q4 (January-March) FY 2023-24 for PPF accounts has been fixed at 7.1%, compounded annually. As compared to the corresponding fixed deposit (FD) rates in many banks, Public Provident Fund gives higher interest benefits to its subscribers.