Senior Citizen Savings Scheme (SCSS) account can be closed at any time by making an application in Form-2
Senior Citizen Savings Scheme (SCSS) account can be closed at any time by making an application in Form-2. However, the premature closure form has to be duly signed and submitted only by the SCSS account holder, as per SCSS rules. This means anyone cannot close your SCSS account without permission at any time. But what happens in case of the death of the SCSS account holder?
Read More: SBI increases MCLR by 10 bps; home loan concessions ending January 31
In case of the death of the SCSS accountholder, the premature closure clause doesn’t trigger automatically. The Ministry of Finance clarified this issue in detail last year. Before getting into what the Finance Ministry said, you should first understand how and when the premature closure of the SCSS account is allowed.
As per SCSS rules, account holders can apply for premature closure of the SCSS account at any time in Form-2. If you want to close your account within one year of opening, then the interest paid on the deposit will be recovered from the sum payable to you. However, if you go for closing the account after a year then a recovery of 1% to 1.5% of the deposit will be made from the account holder.
What happens in case of death
Last year, the Finance Ministry noted that operating agencies were treating some SCSS accounts for premature closure following the death of the account holder. However, the Ministry clarified that the premature closure clause of SCSS doesn’t trigger on account of the death of the account holder.
Read More: Meta, Microsoft Vacating Offices in Seattle Amid Remote Work, Layoffs
The Finance Ministry said that premature closure will be applicable only when the SCSS account holder requests for the closure of his/her account before the maturity period.
In case of the death of the account holder, the SCSS account can be closed on the request of the nominee/legal heir and the interest rate applicable till the demise of the account holder will be paid. For days after the demise of the account holder, Post Office Savings Account interest will be paid to the nominee/legal heir.
The SCSS account matures in 5 years but the accountholders have the option to extend it by another 3 years.
