The government has increased the interest rates of some small savings schemes for the third quarter (October-December) of the current financial year. The interest rates for these post office schemes have been increased by up to 30 basis points for the quarter starting October 1, 2022.

For the quarter ended 31st December 2022, the government has raised Rate of interest On Senior Citizen Savings Scheme (scss) up 20 bps to 7.6% from 7.4% p.a.

features of senior citizen savings plan

according to State Bank Of India Website, these are the main features of SCSS

• The account shall be opened with a minimum deposit of one thousand rupees or any amount in multiples of one thousand rupees which shall not exceed fifteen lakh rupees.
• The depositor can extend the account for a further period of three years after the maturity period of five years.
• Deposits made under these rules shall attract interest as per quarterly instructions by the Government of India from time to time. At present it is 7.40% p.a. from 01.04.2020.
• If the interest payable every quarter is not claimed by the account holder, then no additional interest will be available on such interest.
• The entire amount deposited in the joint account will be payable to the first account holder only.
• Both the husband and wife can open single account and joint account with each other.
• The depositor can nominate one person or more than one person.
• Nomination made by the depositor can be canceled or changed.
• The deposit made at the time of opening of the account shall be paid on or after the expiry of five years or after the expiry of eight years where the account was extended from the date of opening of the account.
• Multiple withdrawals will not be allowed from one account.

Can an account be transferred from one deposit office to another deposit office?

SCSS accounts can be transferred from one deposit office to another deposit office. If the deposit amount is one lakh or more, then a transfer fee of Rs.5 per lakh on deposit for first transfer and Rs.10 per lakh on deposit for subsequent transfer will be applicable.

premature closure

As per the government notification on SCSS, these are the rules for premature closure.

– (1) The account holder may at any time on an application in Form-2 withdraw the deposit and close the account subject to the following conditions, namely:-

(i) If the account is closed before one year from the date of opening of the account, the interest paid on the amount standing to the credit of the account shall be recovered from the deposit amount and the balance amount shall be paid to the account holder.

(ii) If the account is closed after the expiry of one year but before the expiry of two years from the date of its opening, the amount equal to one and a half percent. The deposit will be deducted and the balance amount will be paid to the account holder.

(iii) an amount equal to one per cent, if the account is closed on or after the expiry of two years from the date of opening of the account. Deposit will be deducted and balance will be paid to the account holder

(2) The account holder availing the facility of extension of account can withdraw the deposit and close the account at any time after the expiry of one year from the date of extension of the account without any deduction.

(3) In case of premature closure, interest on the deposit shall be payable up to the date preceding the date of premature closure after deduction of penalty.

(4) Multiple withdrawals will not be allowed from an account.