PPF account turns dormant if you invest less than ₹500 a year: What you lose and how to revive it

Public Provident Fund (PPF) is a long-term savings scheme with a 15-year lock-in period and attractive features such as tax advantages on investments, interest earnings, maturity proceeds, and a decent interest rate of 7.1% per annum. However, account holders are required to make at least one contribution every financial year to keep the account active.

Many investors may be unaware that failing to deposit the minimum required amount of ₹500 in a year can make the account inactive, restricting further deposits and access to all the above mentioned account benefits. If your PPF account has lapsed due to non-compliance, it can be reactivated by following a simple prescribed process.

An inactive PPF account continues to earn interest on the existing balance but the account gets restricted, meaning you won't allowed to perform certain tasks against it unless you reactivate it.

No fresh deposits can be made while your account remains inactive which makes you miss out on earning interest on additional contributions and lose the long-term benefit of compounding that regular investments would have generated.

Account holders are also not allowed to get loans against the PPF balance or make partial withdrawals during this period.

Although the account continues to earn interest and matures after the prescribed 15-year tenure, access to certain account facilities remains restricted unless the account is revived, according to a Paisabazaar report.

Reactivating an inactive PPF account is feasible, but specific steps must be followed along with the payment of a penalty. Follow the steps provided below to reactivate your PPF account:

The reinstated account will resume earning interest from the date of reactivation and to ensure that it does not lapse again, investors should uphold the minimum annual contribution of ₹500 after reactivating the account.

Any resident Indian individual can open a PPF account. Additionally, parents or legal guardians can open a PPF account on behalf of a minor child.

Like we discussed, investors must deposit at least ₹500 in a financial year to keep a PPF account active. The maximum amount that can be invested across all PPF accounts in a year is capped at ₹1.5 lakh.

A PPF account matures after 15 complete financial years from the end of the financial year in which it was opened. Upon maturity, investors can extend the account in blocks of five years as many times as they want.

Though PPF comes with a 15-year lock-in period, investors can make partial withdrawals from the 7th financial year onward. Premature closure is allowed only after five years under certain circumstances such as higher education or serious medical treatment, but a 1% penalty on interest rate will be applicable for such withdrawals.

PPF also offers tax benefits under the EEE (Exempt-Exempt-Exempt) regime, meaning you can save taxes at three distinct stages: investment, interest accrual, and maturity, which makes it a popular savings scheme for long-term and conservative investors.

Eshita Gain is a digital journalist at Mint, where she joined in May 2025. She writes on corporate developments, personal finance, markets, and business trends, with a focus on delivering timely and relevant stories to a broad audience. <br><br> While her core beat lies in business and finance, she is not confined to a single niche and frequently explores stories across domains, including international relations and policy developments. <br><br> She holds a postgraduate diploma in business and financial journalism by Bloomberg from the Asian College of Journalism (ACJ), Chennai. During her time there, she received rigorous training in tracking financial data, interpreting corporate filings, and reporting on business developments. She has pursued her graduation from St. Joseph’s University, Bengaluru in a multi-disciplinary course. Her majors included Journalism, International Relations, peace and conflict studies. <br><br> Eshita has previously wo...