No premature closure of Senior Citizens' Savings Scheme account on death: Govt

NEW DELHI: The Finance Ministry on Thursday clarified that premature closure of an account under the Senior Citizens' Savings Scheme (SCSS) does not get triggered due to the death of the account holder, but is applicable only when the account holder requests for the account's closure before the maturity period.

In such cases of premature closure of an account, a penalty is levied as per rule 6 of the SCSS, the ministry said in a statement.

The clarification came as it has been noticed in some cases that on the death of the account holder, operating agencies are closing the SCSS account by treating it as premature closure.

The ministry said that in cases where the SCSS account holder(s) passes away and the account is being closed on request of the nominee or legal heir, the rate of interest as applicable on SCSS scheme shall be paid till the date of demise of the account holder.

Thereafter, the interest rate applicable on post office savings accounts shall be paid from the date of demise of the account holder till the date of final closure of the account, it added.