Govt. Clarification on Premature Closure due to death of SCSS Account holder

Considering reports of frequent violations of SCSS Rules, the government has clarified certain concerns, relating to the premature closure of SCSS Accounts by banks/post offices, upon death of the SCSS Account holder(s).

Premature closure of an SCSS Account is permitted under SCSS Rules. This can be done during the account holder’s lifetime, at his/her own request. Alternately, this can be done at the request of the nominee/legal heir in the event of the SCSS Account Holder’s death. SCSS Accounts can’t be closed prematurely by the banks/post offices upon death of the SCSS Account holder.

The Govt. has warned such defaulter banks/post offices (Operating Agencies) not adhering to the SCSS Rules to be ready for the levy of prescribed penalty.

It may be noted that the Govt. has recently notified increased rate of 7.6% on SCSS, w.e.f. 01/04/2023.

Govt. Clarification on Premature Closure due to death of SCSS Account holder

GOI Press Release dt. 29/09/2022 (PIB): Operational Clarification on ‘Premature Closure due to demise of SCSS Account holder’

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:

i) 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.

ii) 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.


  1. Smt Geetanjali Govind Kekade
  2. Kishore
  3. Ashok Guha
  4. Ravishankar

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