For those who have the Public Provident Fund (PPF) or any small savings scheme with the post office, this piece of news is really important. The Department of Posts has instituted a new, more stringent policy: accounts that have remained inactive for three years post-maturity will now be frozen twice a year. While this policy is aimed at enhancing security and protecting the funds of investors and the hard earned money , it is still important for account holders to take action within a specified time frame.What Changes Have Been Made Under the New PolicyAs per the latest policies, any post office small savings account that is not closed or does not have a formal extension within the three years of its maturity will be considered inactive and subsequently frozen. The previous policy stating that this freezing action was done annually has now changed to a bi-annual schedule where it will happen on the 1st of January and July. All such accounts that are marked as inactive and matured will be frozen within a 15 day timeframe after the freezing dates.What Happens If An Account Is Frozen?An account that is frozen will not be able to be accessed for any transactions including deposit, withdrawal, or any online services. It is important to note that if an account that is inactive accounts that do not earn interest will keep increasing if the period of inactivity is longer. The policy is intended to ensure that unattended and older accounts are not misused and to safeguard the funds lying idle in those accounts.What Schemes Are Impacted?The effects are noticeable in several popular post office schemes. These are:Steps to Follow in Order to Reactivate a Suspended Account:In case your account is frozen, recovering access to it requires a trip to your post office branch. Here, you would surrender your passbook, provide KYC documents like Aadhaar and PAN, and fill in a prescribed account closure/reactivation form SB-7A. Additionally, a penalty of ₹50 for each year of inactivity will be levied for the frozen period of the account.Investor's Main Focus:In order to prevent this form of inconvenience and the possibility of losing access to their funds, it is advisable to either close the matured accounts, or request for extensions within the three years post maturity period. Also, it must be noted that accounts can turn “inactive” after they cease to meet a certain bare minimum in annual contributions, hence putting an auto-contribution on investment accounts will greatly enhance their accessibility and add to their value.
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