Quick Summary
In the operation of Senior Citizens’ Savings Scheme (SCSS), it has been noticed in few cases on the death of the account holder, operating agencies are closing the SCSS account by treating it as premature closure.
In this context, attention is drawn to Rule 7(2) of SCSS, and the following is clarified:
- in cases where the SCSS account holder/s passes away and the account is being closed on request of the nominee/legal heir, the rate of interest as applicable on SCSS scheme shall be paid till the date of demise the account holder. Thereafter, the interest rate applicable on Post Office Savings Account shall be paid from the date of demise of the account holder till the date of final closure of the account.
- Premature closure clause does not trigger on account of demise of the SCSS account holder. The premature closure of the account is applicable only when the SCSS account holder requests for closure of own SCSS account before the maturity period. In such cases of premature closure of the account, a penalty shall be levied as mentioned in the rule 6 of the SCSS.
FAQ :
Upon the death of an SCSS account holder, the account should not be treated as a premature closure. Interest is paid at the SCSS rate until the date of demise, and then at the Post Office Savings Account rate until final closure.
From the date of the account holder's demise until the final closure of the account, the interest rate applicable to the Post Office Savings Account will be paid.
No, the premature closure clause does not apply when an SCSS account holder passes away. This clause is only for when the account holder requests closure before maturity.
Penalties for premature closure are levied only when the SCSS account holder themselves requests to close their account before its maturity period, as per rule 6 of the SCSS.
The nominee or legal heir can request the closure of the SCSS account after the account holder's death.
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