In India, risk-averse investors-looking to build retirement corpus or to accumulate for financial goals like daughter’s higher education-still prefer investing in schemes like Public Provident Fund (PPF), post office recurring deposit or Sukanya Samriddhi Account (SSY). According to recent data, under National Savings Scheme (NSS) gross collection grew from Rs 5.16 crore in FY17 to Rs 5.92 crore in FY18, 15 per cent year-on-year (y-o-y).
In a PPF account, an investor needs to invest at least Rs 500 in a financial year, and Rs 250 in Sukanya Samriddhi Account to keep the account activated. If that is not maintained, the account becomes dormant. This happens mostly when an investor forgets to deposit the minimum amount.
If your account has also become dormant, here are the rules you need to follow to revive your small savings accounts:
Sukanya Samriddhi Account
Sukanya Samriddhi Account was launched by the government in 2015, catering to only girl child. This scheme comes with a minimum yearly deposit of Rs 250. The maximum amount, however, can go up to Rs 1.5 lakh in a financial year. Other than parents, a guardian can also open this for a girl child. Note that a parent or guardian can open only one account for a girl child and a maximum of 2 accounts in case of two different girl children. SSY account can be opened for a girl child till she attains the age of 10 years.
Deposits can be made in this account up to 14 years from the date of opening of the account. The account can be closed after the girl reaches 21 years of age. After the account holder attains the age of 18, partial withdrawal up to 50 per cent of the balance at the end of the preceding financial year can be made. One can also make premature closure of the account after completion of 18 years or if the girl is married.
In a financial year, if the minimum amount of Rs 250 is not maintained, the account becomes dormant. It can, however, be revived with a penalty of Rs 50 charged in a year. Also with the penalty you also need to make the minimum deposit for all the dormant years. Hence, to keep your account active remember to contribute at least the minimum amount every financial year, which most generally forget.
Public Provident Fund
The PPF account can be opened by any Indian, along with a second account in the name of a minor. The maximum limit, however, is set at Rs 1.5 lakh for all accounts taken together. The maturity of a PPF account is after 15 years, which can be renewed every five years. The minimum amount of investment that can be made in a financial year is Rs 500, and if one fails to contribute that amount in their PPF account in a year, it then becomes dormant.
You can also make the dormant account active, by giving a written request to your nearby post office branch or bank from where the account has been opened. You will be charged a penalty of Rs 50 and along with the minimum amounts of Rs 500, for every dormant year. Then the account will get reactivated after verification, and further contributions can be made.
Note that there are certain limitations with a dormant PPF account. Subscribers do not get elected for certain benefits. For instance, a subscriber with an active account will be eligible to avail a loan from the 3rd to the 6th financial year after opening the account. Subscribers with a dormant account are not eligible for the loan, or partial withdrawal.