The Central Government made ‘Senior Citizens Savings Scheme Rules, 2004’, in exercise of the powers conferred on it by section 15 of the Government Savings Banks Act, 1873. These Rules came into effect from 02.08.2004. This scheme is meant for savings the retirement benefit of the senior citizens whether they retired on superannuation or on voluntary retirement. The interest rate is higher than the normal savings schemes and fixed deposit interest rates.
Who can deposit?
who has attained the age of 60 years or above on the date of opening of the account; or
who has attained the age of 55 years or more but less than 60 years
and who has retired on superannuation or otherwise on the date of opening of an account.
The retired personnel of Defence services (excluding Civilian Defence Employees) shall be eligible to subscribe irrespective of the age limit subject to the fulfillment of other conditions.
The following are not eligible to open this account-
Non residents; and
Hindu Undivided family.
If a depositor who subsequently becomes a non resident Indian during the currency of the account, the account may continue till its maturity as a non repatriation basis and the account shall be marked as a Non resident account. The account continued shall not be extended for further period.
Condition for investment
The condition for opening this account is the account should be opened within one month of the date of receipt of retirement benefits and proof of date of disbursal of such retirement benefits along with a certificate from the employer indicating the fact of retirement on superannuation or otherwise, retirement benefits, employment held and period of such employment with the employer is to be attached along with the application.
Where to deposit?
This deposit may be deposited in a post office or an office or branch of a banking company or any other institution, authorized by the Central Government to receive subscriptions under the Public Provident Fund Scheme.
Opening of account
Any depositor may open an account at any deposit office by making an application in Form A along with the amount of deposit as per the pay in slip in Form D duly filed in along with age proof.
A depositor may operate more than one account subject to the condition that the deposits in all accounts taken together shall not exceed the maximum limit.
A depositor may open the account in individual capacity or jointly with spouse.
The deposits shall be restricted to the retirement benefits received by them or 15 lakhs whichever is lower. A deposit office shall, as soon as it comes to the notice that a deposit exceeds the ceiling request the depositor in writing, to withdraw the excess deposit immediately.
The expression ‘retirement benefit’ means any payment due to the depositor on account of retirement whether on superannuation or otherwise and includes-
Public Provident Fund dues;
Commuted value of pension;
Cash equivalent of leave;
Savings element of Group Savings linked Insurance Scheme payable by employer to the employee on retirement;
Retirement-cum-withdrawal benefit under the Employees’ Pension Scheme; and
Ex-gratia payments under a voluntary retirement or a special voluntary retirement scheme.
Mode of deposit
The deposit may be made in cash, if the amount of deposit is less than Re.1 lakh; by cheque or demand draft drawn in favor of the depositor and endorsed in favor of the deposit office or in favor of the deposit office.
If the deposit is made by cheque or demand draft, the date of deposit shall be the date of encashment of the cheque or demand draft. If the deposit is made by means of an outstation cheque or demand draft, collection charges at the prescribed rate shall be payable along with the deposit and the date of realization of the cheque or demand draft shall be the date of deposit.
The tenure of the deposit is five years. The depositor may extend the account for a further period of three years by making an application in Form B to the deposit within a period of one year after the maturity period of five years. The extension of account shall be deemed to have been made from the date of maturity irrespective of the date of application.
The deposit shall bear the interest at the rate of 8.3% by the post offices from the date of deposit. Interest is payable from the deposit to 31st March/30th June/30th September/31st December in the first instance and thereafter it shall be payable on 31st March/30th June/30th September/31stDecember.
If the due date falls on a Sunday or a holiday, the previous working day shall be deemed to be the due date. The interest shall be credited to the depositor’s savings account in the deposit office if authorized. This is subject to the condition that by so credit of the interest amount, the maximum limit of balance, if any, in the savings account, is not exceeded.
Interest shall be rounded off to the nearest rupee. Any amount of 50 paise or more shall be treated as one rupee and any less than 50 paise shall be ignored. The excess amount shall carry interest at the rate applicable from time to time to the Post Office Savings Account. Such interest shall be payable from the date of deposit of excess amount to the end of the month preceding the month in which the deposit office requests the depositor to withdraw the excess amount; the amount of excess interest, if any, already paid to the depositor, shall be deducted.
In case an account, continued after maturity, the deposit in such accounts shall earn interest at the rate applicable to the new accounts opened or to be opened. In case of an account which is not extended on maturity and closed at any time, post maturity interest at the rate, as applicable to the deposits under the Post Office Savings Account from time to time, shall be payable on such matured deposits, up to the end of the month preceding the month of closure of the account.
No withdrawal shall be permitted before the expiry of a period of five years from the date of opening of an account unless the same is closed before the period of maturity.
The following are the points to be observed in case of nomination-
The depositor may nominate a person or persons, at the time of opening of the account, in the event of the death of depositor, who shall be entitled to payment due on the account.
If such nomination is not made at the time of opening of the account, it may be made by the depositor at any time after the opening of the account but before its closure, by an application in Form C to the deposit office where the account is opened;
The nomination may be cancelled or varied by a fresh nomination.
Nomination facility is also available in case of joint accounts.In such case, the joint holder will be the first person entitledto receive the amount in the event of death of the depositor and the nominee’s claim.
Closure of account
The deposit office shall pay the deposit on or after the expiry of five years from the date of opening of the account on production of the pass book accompanied by a written application in Form E. If the depositor does not close the account or extend the account the account shall be treated as matured. The depositor is entitled to close the account at any time subject to the condition that post maturity interest shall only be admissible for the period beyond maturity.
In case of death of a depositor before maturity, the account shall be closed and deposit refunded on an application in Form F along with the interest till the end of the month preceding the month in which refund is made, to the nominee or legal heirs in case the nominee has also expired or nomination was not made.
In case of a joint account or where the spouse is the sole nominee, the spouse may continue the account on the same terms and conditions as specified. In case the spouse does not continue the joint account, the account shall be closed on application in Form F and the deposit refunded along with interest.
Where both the spouses have opened separate accounts and either of the spouses dies during the currency of the account (s) under the scheme, the account(s) standing in the name of the deceased/spouse shall not be continued and such accounts shall be closed.
If there is no nomination at the time of death of the depositor, the amount standing to the credit of the deceased depositor shall be paid by the deposit office to the legal heirs of the deceased depositor on receipt of an application along with a certificate of death of the depositor and a succession certificate or Letter of Administration with attested copy of probated will of the deceased depositor issued under the provisions of the Indian Succession Act, 1925.
The total amount including interest payable up to Re.1 lakh may be paid to the legal heirs on production of-
a letter of indemnity;
a letter of disclaimer on affidavit; and
a certificate of death of the depositor on stamped paper
in the forms as in Annexure to Form F. No deduction shall be made in case of premature closure of an account at any time due to the death of a depositor.
Premature closure of account
The depositor may be permitted to withdraw the deposit and close the account at any time after the expiry of one year from the date of opening subject to the following conditions-
if the account is closed after the expiry of one year but before the expiry of two years, an amount equal to 1.5% of the deposit shall be deducted and the balance paid to the depositor;
if the account is closed on or after the expiry of two years an amount equal to 1% of the deposit shall be deducted and the balance paid to the depositor.
The depositor availing the facility of extension may be permitted to 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.
A pass book shall be provided to the depositor by the deposit office. The pass book shall bear-
the date of opening of the account,
the number of the account,
the depositor’s name,
the amount deposited,
the quarterly interest payable along with the due dates of payment,
the date on which the deposit will be due for final payment,
the name of the nominee; and
the agent’s name, agency code number, date and validity, in case the account has been introduced through an agent.
The depositor availing the facility of credit of interest in savings account shall present the pass book to the deposit office at least once in a year for completion of entries. If the depositor does not avail the facility of credit of interest, shall present the pass book at the time of collecting interest every quarter.
Duplicate pass book may be obtained in case of lost or mutilation or damage, on payment of a fee of 10/- in case of first instance and 20/- in case of subsequent issue. If the lost pass book is found after issue of a duplicate pass book it shall not be treated as valid and it should be surrendered immediately to the deposit office who shall destroy the same immediately in the presence of the depositor.
Transfer of account
A depositor may transfer his account from one deposit office to another in case of change of residence in form G. If the deposit is Re.1 lakh or above a transfer fee of 5/- per lakh of deposit shall be payable.
Account opened in contravention of rules
If it comes to notice that the account has been opened in contravention of the rules, the account shall be closed immediately and the deposit in the account after deduction of interest, if any, paid on such deposit, shall be refunded to the depositor.