personal finance

No penalty, revival fees for PPF, RD and other small savings schemes

The Department of Post has waived penalty/revival fees for not investing the minimum amount due for financial year 2019-20 and for April 2020 in various small savings schemes. The penalty/revival fees has been waived till June 30, 2020 on schemes like Public Provident Fund (PPF), recurring deposits (RD) etc.

As per the circular issued by the department on March 31, “The subscribers of RD/PPF/SSA Accounts may deposit the mandated due amount, if any of current F.Y. (2019-20) and April, 2020 (as the case may be) in their respective accounts till 30th June, 2020 and no penalty/revival fee shall be charged.”

The decision has been taken by the Ministry of Finance as many investors have not been able to deposit money into their accounts on time due to the nationwide lockdown.

However, if you are some who has not yet invested the minimum amount required, do keep in mind that though the penalty will not be charged for FY 2019-20 for which the last date is March 31 and for April 2020. If you do not invest the amount due for the month of May on time, then you will be charged a penalty.

Penalty for not depositing minimum amount

In a PPF, if you do not invest a minimum amount of Rs 500 in a single financial year, your account will become inactive. You can revive the account by paying a penalty of Rs 50 (for every financial year your account has been inactive) and minimum deposit amount of Rs 500.

Similarly, missing an instalment of an RD account can lead to default fees. As per the India Post website, default fee of Rs 1 for every Rs 100 is charged. Therefore, for an RD account with monthly instalment of Rs 10,000 will lead to default fee of Rs 100. Further, after four regular defaults, the account becomes discontinued.

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Like PPF, girl child saving scheme, Sukanya Samriddhi Yojana (SSY) also requires minimum deposit in a single financial year.


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