Things to do if you have two PPF accounts
A Public Provident Fund (PPF) account is a tax-saving option which yields good returns over a longtime.
Yet, a 15-year lock period is there which may have certain complications in times of your relocation.
In such situation, users tend to open another account with a different bank to deposit money in the account. But, it is not correct because an individual can have only one PPF account in his or her name. And any second account is invalid.
However, due to lack of awareness, most PPF users open a second account in their names.
In this scenario, you have to follow certain steps to deal with your two PPF accounts.
- You should note that even if your second PPF account is with another bank, it is treated as invalid.
- But, you cannot close it due to its 15-year lock period. So, the best thing you can do is to deposit the minimum amount of ₹500 to keep it active. This will enable you to not lose the money you already have in your account until you combine your two PPF accounts.
- As your second PPF account is an invalid account, you will not earn any interest on it. You have to remember that you are depositing the minimum amount in that account only to keep it active.
- You have to get the approval from the Department of Economic Affairs to merge your two PPF accounts by writing a letter to them. Furnish all your account details in that letter and request them to merge these accounts.
- Your accounts will be merged after your request has been approved.
In order to avoid this worrisome situation, request your branch for a transfer of your PPF account to the location where you are relocating.
For this, you have to submit an application with your current branch. Get your passbook updated with your latest entries like deposits and any pending interest.
Your PPF account will be transferred to your desired bank and place after the successful verification of your account details and relevant documents.
Your new branch opens a new PPF account as continuation of the old account after receiving your application and documents. Your account balance and the number of years would not go to waste and you can continue depositing in it.
Image Credit: PPF / CC BY-SA 4.0
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Image Reference: https://commons.wikimedia.org/wiki/File:PPF_logo.jpg
5 Responses to Things to do if you have two PPF accounts
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I had by mistaken open two ppf accounts in different banks, the 2nd ppf account opened recently, I went to the bank to close 2nd my account but they are saying that they will close it after 5 years only.
Is there is any why to close it before that period?
I don’t think there is a chance of foreclosure of such account. So, follow the suggestions of your bank authorities.
I was having two ppf account in same branch. Opened in year 2009 & 2011 respectively. (second account was open by mistake). in 1st account 15k balance and in 2nd account 1 lac balance including interest of these years. Without knowing I was depositing amount on 2nd account. Bank also continued to auto debit instruction from saving account to these ppf account. On notice I asked bank to merge these account as it was opened by mistake.
Bank has closed my second account & I lost the total interest on it of these many year.
Is there any way to get back lost interest or merging the second account. so that i can save my insterest amount.
Please advise. thanks in advance.
thanks for reply.
Both the ppf account in same branch. I have requested to merge account by a request letter to bank. But bank has closed my 2nd ppf account & transfer only the principal amount to my saving account. all interest gone(lost). In this scenario what will you suggest to get back my interest amount.
There is no option to recover interest. Having two PPF accounts is a violation of the law. Not just in the same bank, but nowhere you should have two PPF accounts as the amount deposited in this account can be claimed for tax exemption. That’s why your bank closed one account.