Don't keep two PPF accounts: You can face a penalty, implications and what to do

Don't keep two PPF accounts: You can face a penalty, implications and what to do


While only one PPF account is allowed to be opened in one's name, there could be a possibility that one ends up holding multiple PPF accounts. It does not matter whether you have one such account in a post office and another in a bank.

One person-one account

The application to be used while opening the PPF account gets a declaration from the account holder that no other PPF account is being held by the individual. However, remember that the rules allow the same individual to open another account in the name of a minor. Still, it does not allow to hold more than one PPF account in the self-name. As a parent, one can open in one minor child name while the other parent can open in second child name. Both parents cannot open in the name of the same child.

Second PPF account

Once you have realised that there are more than one account in your own name, steps need to be taken to remove this irregularity. The second account will anyhow become the irregular account and you will not get any interest on the balance lying in the second account until it is regularised. Closing the second account is not an option because as per the rules, the PPF account has to run till its maturity.

What's the way out

You need to amalgamate both the accounts so that there is no loss on interest on the irregular account ( second account). For this, you need to approach the Department of Economic Affairs (DEA) of the Ministry of Finance by writing to the Under Secretary-NS Branch MOF (DEA), New Delhi-1. This communication with disclosing all the details of the two accounts may be routed to the DEA through the post office. In case, after amalgamation, the total contributions during the year crosses the limit of Rs 1.5 lakh, the excess amount will be refunded without interest.

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