PPF account rules: How to combine multiple PPF accounts into one account?

The Government has now simplified the procedure of amalgamating multiple PPF accounts into a single account. You can choose which account to retain.

Own multiple PPFs

As per the PPF rules, an individual cannot hold multiple PPF accounts. But many people unknowingly end up opening multiple PPF accounts. In October 2021, the Government issued guidelines for amalgamating multiple PPF accounts into one. In this article, we shall find out how to merge multiple PPF accounts.

Amalgamating multiple PPF accounts

In the case of an individual with multiple PPF accounts, as per the PPF account rules, the second and subsequent PPF accounts opened are treated as irregular. For regularising such irregular accounts, the Government issued a Standard Operating Procedure (SOP) for amalgamating multiple PPF accounts into one.

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a) Option to retain a PPF account of choice
The individual has the option to retain the account that they want. For example, if an individual has one PPF account with a bank and another with a post office, they can decide whether to retain the PPF account with the bank or the post office.

b) Payment of outstanding loan
If there is any outstanding loan in any of your PPF accounts, the entire outstanding loan amount has to be repaid with interest before amalgamation can be effected.

c) Application for amalgamation of accounts
The account holder has to make an application at the branch where the account is to be retained. For example, let’s assume you have a PPF account with a post office and also a bank. If you wish to retain the PPF account with the bank, you need to submit an amalgamation application at the bank.

The bank will contact the post office for details of the deposits made there and check if the total deposits made in both accounts in a financial year are within the prescribed limits. For example, for FY 2020-21 the prescribed limit is Rs 1,50,000. If the deposits are within limits, the bank will ask the post office to transfer the balance to the bank and close the post office PPF account.

The account opening date of the retained PPF account will be considered as the actual PPF account opening date for calculating the maturity date and other purposes. 

If the deposits made in both accounts in a particular financial year are above the prescribed limit, the excess amount will be refunded to the account holder from the account to be amalgamated without any interest.

Also Read: 4 Benefits Of Investing In Your Child's Name

Table: PPF minimum and maximum subscription limits

PPF minimum and maximum subscription limits

The above table shows the history of revising subscription limits for the PPF scheme. From 2014, the limit was revised to Rs 1,50,000, and remains the same to date (December 2021).

Fresh AOF and passbook for the amalgamated account

The branch where the account is to be retained will prepare a fresh calculation sheet with the transactions from both the PPF accounts to be amalgamated. They will manually calculate the interest earned for each financial year. They will add the interest amount entry with the date as 31/3/[year] for all financial years.

Both the existing PPF accounts will be closed. The customer will have to submit a fresh, duly filled Account Opening Form (AOF). A new PPF account will be opened as an amalgamated account with the account opening date of the retained account. The new account will be updated with the transactions of both the existing PPF accounts. A fresh passbook with the details of the amalgamated PPF account will be issued to the customer. 

Related: Important Points You Should Know Before Opening A PPF Account For Your Children

Last words

In the fixed income category, PPF is one of the best investment products. It is an excellent means to accumulate money for various financial goals, such as investment for a child's higher education or building a retirement fund. A parent can open a separate PPF account for a minor child. But, you can deposit a maximum of Rs. 1,50,000/year in your PPF account and your child's PPF account, collectively. So, while investing in PPF, make sure you follow all the rules, such as maintaining only one PPF account. If by mistake you have opened multiple PPF accounts, make sure you amalgamate them into a single account as per the procedure explained above. 



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