What To Do If You Have Two PPF Accounts?

The Public Provident Fund or PPF is a very popular investment for conservative investors. PPF enjoys a sovereign guarantee on both the principal and interest earned. PPF currently offers an interest of 7.9% for the October to December quarter.

PPF has a 15-year lock-in and enjoys Section 80C tax benefits up to Rs 1.5 Lakhs a year. PPF also enjoys the EEE tax benefit. Your investment enjoys the Section 80C benefit, while the interest earned and the amount withdrawn at maturity are tax-free.

What if you have more than one PPF account in your name? Problems could arise with more than 1 PPF account as you are allowed to have just a single PPF account. Some people have multiple PPF accounts in their names. They could have one PPF account in the bank and one at the post office. So, what should you do if you have two PPF accounts?

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What To Do If You Have Two PPF Accounts?​

Make a declaration when opening the PPF account

You must make a declaration when opening a PPF account saying you don’t have any other PPF account. However, you can open a PPF account in the name of your minor child. If you have two children, one of the parents can open a PPF account in one child’s name while the other parent can open a PPF account in the second child’s name.

See Also: How To Open PPF Account Online?

Treatment of the second PPF account

If you have more than one PPF account in your name, you must get rid of the others. Otherwise, the second account becomes an irregular account. You will not get any interest on the balance lying in the second account. You have to regularize the PPF account. Do note that you cannot close the second PPF account until maturity of 15 years. You must keep the PPF account active by making a deposit of just Rs 500 a year, which is the minimum amount.

What to do if you have two PPF accounts?

If you have two PPF accounts you must amalgamate both of them. This is a must to avoid loss of interest on the irregular account.

• You must approach the Department of Economic Affairs of the Ministry of Finance. You must also write to the Under Secretary-NS Branch MOF (DEA).
• While writing to the DEA, make sure to disclose details of the two accounts and route them through the post office.
• After the amalgamation process is done, if the total contribution crosses the maximum limit of Rs 1.5 Lakhs in the year, the excess amount is refunded to your bank account without interest.
• The deposits in excess of Rs 1.5 Lakhs are treated as irregular subscriptions. They don’t enjoy the Section 80C benefit.

See Also: PPF Account Rules

How to transfer the PPF account?

If you are relocating to another place, transfer the PPF account from one bank branch to another.

• Just submit an application with your current branch requesting a transfer to a bank branch in your new location. (Don’t open a new PPF account at this branch).
• Get the passbook updated before the transfer. This is to check if it shows details of the last deposit and interest earned on it.
• After you submit the application, the account details and related documents are verified.
• When verification is successful, the balance in the PPF account gets transferred to the new bank branch.
• After the new bank branch gets your application and documents, the procedure for opening the new PPF account commences. (This is just an extension of your old PPF account so that the years you have already stayed invested are not wasted).
• You must submit personal identification documents at the new bank branch for KYC. This is just like opening a new bank account.
• After opening the new account and it’s in the active status, you get a new passbook which shows the accumulated balance as the opening balance.

See Also: Why PPF is a Great Investment?

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