Explained: Senior Citizens Savings Scheme (SCSS) Current Withdrawal Rules
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Planning
oi-Vipul Das
Senior Citizens Savings Scheme is a prominent small savings scheme for senior citizens, with a current interest rate of 7.4 percent per year. SCSS, which has a five-year maturity period, allows them to gain a steady income during their retirement age. An individual must be at least 60 years old to open a Senior Citizens Savings Scheme account. An individual aged 55 years or over but less than 60 years who have retired on superannuation or under VRS can also open the account. Multiple accounts, subject to a cumulative investment cap of Rs15 lakh, can be opened in any post office. The account can be extended for a block of three years after it reaches maturity by submitting a predefined form along with the passbook to the relevant post office. However, within one year of maturity, the account can be extended. Any time after the account’s opening date, it can be closed prematurely. Read the following facts to learn more about the withdrawal rules of SCSS.
1. A Senior Citizens Savings Scheme account can be closed early if it has been open for more than one year. However, the deposit’s interest will be recovered, and the remaining balance will be returned to the individual.
2. If the Senior Citizens Savings Scheme account is closed within one and two years after it was opened, 1.5 percent of the deposit will be withheld and the remaining balance will be credited to the individual.
3. If the account is closed after two years but within five years from the date of opening, 1% of the principal will be withheld and the amount will be credited to the account holder.
4. In case a Senior Citizens Savings Scheme account has been extended once, the account holder can close the account without penalty after one year from the date of extension.
5. If a Senior Citizens Savings Scheme depositor dies before the account matures, the account will be terminated, and the balance will be refunded, including the interest at the SCSS rate before the date of demise and at the savings account interest rate (currently 4%) before the account is finally closed.
6. If the spouse is the sole nominee in case of a joint account, the spouse can continue the account if the spouse fulfills the scheme’s eligibility requirements on the date of the primary account holder’s demise.
7. If one of the spouses has opened a new account or accounts under this scheme and one of the spouses dies when the account or accounts is active, the name of the account or accounts maintained by the late account holder will be terminated.
8. In the event the depositor does not close or extend the account (i.e. within 1 year of account opening date but before the maturity period of 5 years) by requesting for a period of three years, the account will be classified as matured, and post maturity interest amount at the prevailing rate to a post office saving deposit will be payable only for the period beyond the maturity date but before the closure of the account.
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