SCSS: How to close Senior Citizen Saving Scheme account? Know rules and penalties for withdrawals

The Senior Citizen Savings Scheme, a savings initiative tailored to cater to the needs of senior citizens after retirement, is presently under the auspices of the Central Government. Eligible individuals aged 60 years and above can invest in this scheme and reap the benefits of an exceedingly secure investment option. It's worth mentioning that there's a relaxation in age criteria for security forces employees who seek to invest in this program.

As per the guidelines of the program, the maximum deposit limit is capped at Rs. 30 lakh. Investors can avail themselves of the facility of closing their SCSS account or withdrawing funds before the maturity period. However, there's a penalty that applies when this is done. It's worth noting that the government reviews the interest rates quarterly, and under the Senior Citizen Savings Scheme, the interest rate is taxable and paid on a quarterly basis. From April 1, 2023 to June 30, 2023, investors stand to gain up to 8.2 percent interest on deposits made within the program.

When can an SCSS account be closed? The Senior Citizen Savings Scheme has a maturity period of five years. However, investors can extend it for another three years after maturity. The account can be closed at any time by submitting Form No. 2, but there are conditions attached to it.

If an investor wants to terminate their Senior Citizen Savings Scheme account before the first year's completion, they will not receive any interest on the deposited amount. The remaining amount will be returned to the investor. In case of closure after the first year but before the second year, an amount equal to one and a half (1.5) percent of the deposit amount will be withheld, and the remaining amount will be paid to the investor. Upon the closure of this account after two years, one percent of the deposit amount will be withdrawn, and the remaining amount will be returned to the investor.

It's worth noting that the investment limit is fixed under the Senior Citizen Savings Scheme. The minimum deposit amount is Rs. 1000, while the maximum amount is Rs. 30 lakh, and the account matures for the next five years from the date of opening.

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