Does SCSS allow premature withdrawals?

Published: 01 Feb 2024

The SCSS has a tenure of five years

However, you can withdraw earlier, albeit at a cost. We walk you through all the penalty clauses applicable to premature withdrawals.

If you withdraw before a year

You’ll get back all your money invested, but the interest accumulated will be deducted.

Penalty on withdrawing after a year but before two years

There is a deduction of 1.5 per cent on the principal.

When you withdraw after two years

You are liable to pay a penalty of 1 per cent of the principal.

What are the extension rules?

The SCSS can be extended for indefinite blocks of three years now.

Withdrawing on the sixth year

A penalty of 1 per cent is applicable. This is the new rule. Earlier, you weren’t allowed to withdraw your SCSS amount in the sixth year.

Withdrawal penalty on the seventh and eighth year

It carries no penalty.

Extension beyond eight years

Since SCSS can be extended further than eight (5+3) years, the same principles apply in your 9th, 10th and 11th year.

Rules for premature withdrawal upon an extension

While withdrawal in the first year of extension will have a penalty of 1 per cent, the second and third years will have no such conditions.