The Indian government has recently introduced an important rule that may affect your small savings and Public Provident Fund (PPF) accounts. If you have a PPF or any small savings account such as Sukanya Samriddhi Yojana, National Savings Certificate (NSC), or Post Office Savings Scheme, you must be aware of this new change. The rule says that if these accounts remain inactive or silent for 3 years, they may be closed by the government. Let’s understand this update in simple words.
What Are Small Savings and PPF Accounts?
Small savings schemes are government-backed saving schemes meant for the common people. These include:
- Public Provident Fund (PPF)
- Sukanya Samriddhi Yojana
- National Savings Certificate (NSC)
- Kisan Vikas Patra (KVP)
- Post Office Monthly Income Scheme
- Senior Citizen Savings Scheme
People invest in these schemes for safe returns, tax benefits, and long-term savings. PPF, for example, is popular because it gives tax-free interest and is ideal for retirement savings.
What Is the New Government Rule?
According to the Finance Ministry’s new rule, if any small savings account remains inactive for 3 continuous years, it can be declared as an “inactive” or “dormant account.”
Here’s what the rule says in simple terms:
- If no deposits or no withdrawals happen in your account for 3 years, it becomes dormant.
- The government or post office may close such accounts after the 3-year period.
- You may need to take special permission to reactivate the account or claim the money later.
- The rule applies to all small savings accounts, including PPF.
Why Has This Rule Been Made?
The government has made this rule to:
- Reduce the burden of maintaining unused accounts.
- Avoid misuse of dormant accounts.
- Keep the system clean and transparent.
- Ensure that only active users benefit from the schemes.
There are thousands of accounts where no transaction has been made for years. This creates confusion and increases paperwork for banks and post offices.
What You Should Do Now
If you have any small savings or PPF account, here’s what you must do:
Check your account status – Make sure you are using your account at least once in 3 years.
Deposit a small amount – Even depositing ₹500 is enough to keep the account active.
Set reminders – You can set yearly reminders to deposit in your PPF or Sukanya accounts.
Keep your documents updated – Update your KYC regularly to avoid any issues later.
Nominate someone – Add a nominee to your account so your savings are safe even if something happens to you.
What Will Happen If Your Account Is Closed?
If your account is closed due to inactivity:
- You may not earn interest after 3 years of inactivity.
- You will need to give proof of identity and apply to get your money back.
- It may take time and paperwork to recover your funds.
So it’s better to keep the account active and avoid any trouble later.
Example Case
Let’s say Ramesh opened a PPF account in 2020 and deposited money that year. But after that, he didn’t make any deposit in 2021, 2022, or 2023. That means for 3 years, no activity happened. As per the new rule, his account will be marked inactive and may get closed in 2024 or 2025. Ramesh will have to apply and request reactivation or refund.
To avoid this, Ramesh could have simply deposited even ₹500 every year.
Table: Active vs Inactive Account Summary
| Feature | Active Account | Inactive Account (3 Years) |
| Interest Earning | Yes | May Stop |
| Withdrawal Allowed | Yes | No (until reactivation) |
| Additional Deposits | Yes | Not Allowed |
| Government Status | Active | May Get Closed |
| Reactivation Process | Not Needed | Application Required |
Final Words
This new rule is important for everyone who uses small savings or PPF accounts. Your money is safe, but only if you keep the account active. By making small yearly deposits, you can avoid closure and keep enjoying tax-free returns and interest. Don’t ignore this rule. Check your accounts today, make a small deposit if needed, and stay worry-free.
