Why you need to deposit money in PPF, SSY, NPS every year

As you approach the end of the financial year, you may want to check whether you have made the minimum investment required to keep certain savings and retirement plans active. The Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY) and the National Pension Scheme (NPS) impose a minimum investment in each financial year. Mint tells you what you stand to lose if you default and how to reactivate an inactive account.

PPF: The mandatory minimum investment required in the PPF is 500 to keep it active. You must send a request to the bank or post office where the account was opened to relaunch it.

With the app you have to pay 50 for each default year, 500 for all years the account has been in default, and 500 as a renewal fee for the year in which you relaunch the account.

Although there is no maximum contribution limit to the PPF, you benefit from a refund of tax and interest only up to 1.5 lakh per exercise.

Until you relaunch the account, you cannot borrow or make partial withdrawals from the PPF balance, permitted after three and five years, respectively. An unpaid balance in an abandoned account earns interest until maturity. Default accounts cannot be reactivated after expiration and if your account is terminated upon expiration, you cannot extend the account for the next five years.

NPS: NPS Tier I accounts require a minimum contribution of 1,000 per fiscal year, with no cap. There is no required minimum contribution for Level II accounts. Default will cause your Level 1 account to be frozen. Account holders who transact online can straighten them out directly by paying a penalty of 100 with 1,000 as arrears for each year in default. Offline account holders must write to their Point of Presence (POP) to initiate the unlock process.

SSY: The parent/legal guardian must pay at least 250 to keep the SSY account active. Default staves 50 penalty per year of default.

Failure to regularize the account will have no impact on interest and the balance will earn interest until the 21-year maturity. Note that since deposits in SSY are only allowed up to 15 years, the account can only be reactivated before then.

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