What happens if the SCSS account holder passes away?

If a person dies during the SCSS period, is any penalty applicable? What are the rules? - Anonymous

In the unfortunate event of the death of the SCSS account holder, no penalty will be applied to the account. However, the rules state that the SCSS account must be closed. The deposited amount, along with applicable interest, will be paid to the nominee or the legal heir.

To close the SCSS account, an application in Form 3 must be submitted along with the death certificate of the SCSS account holder. The application form can be obtained from the bank or post office where the account was opened.

It is important to note that the nominee or legal heir will receive interest as per SCSS until the date of the account holder's death. After that, the interest on deposits will be paid as per the rate applicable to the post office savings account.

Cases where SCSS account can be continued

• If the SCSS account was opened jointly with someone or if the spouse is the sole nominee, the account can be continued if the spouse meets the SCSS eligibility criteria, i.e., if the spouse is a senior citizen.
• However, if both spouses opened separate SCSS accounts and one of them dies, the SCSS account of the deceased spouse will not be continued.

Suggested read: Is partial withdrawal from SCSS permitted?

This article was originally published on April 14, 2023.