SCSS 2004: Interest Rate for Nominees on Depositor's Death
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2006-2007/360 · issued 30 Apr 2007 · ~2 min read
Quick answerRBI clarifies that for SCSS 2004 accounts, if a depositor dies before maturity, the nominee or legal heir gets Savings Bank interest from the date of death until account closure. This applies to all authorized banks handling SCSS accounts.
What changed
RBI issued a clarification on the interest rate applicable when an SCSS 2004 depositor dies before maturity. The nominee or legal heir is entitled to the Savings Bank rate of interest for the period from the depositor's death to the account closure date. This aligns with Rule 8(3) of the SCSS 2004 framework.
What it means for you
Banks must ensure that for deceased depositors' SCSS accounts, interest is calculated at the Savings Bank rate for the interim period between death and closure. This prevents disputes and ensures consistent treatment across all designated branches. It also impacts the payout amount to nominees, potentially reducing returns compared to the original SCSS rate.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Update internal SOPs to apply Savings Bank rate on SCSS accounts from date of depositor's death to closure by nominee.
Train branch staff on this clarification to handle death claims accurately.
Communicate this rule to all designated SCSS branches for compliance.
Ensure system changes to automatically calculate interest at SB rate for such cases.
Who it affects
All banks authorized to operate SCSS accounts (public sector banks, ICICI Bank, etc.), Nominees and legal heirs of deceased SCSS depositors, Branch staff handling SCSS death claims
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-19 17:05 IST
Status change: withdrawn05 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What interest rate applies if an SCSS depositor dies before maturity?
The nominee or legal heir gets the Savings Bank rate of interest from the date of death until the account is closed, as per RBI's clarification on Rule 8(3) of SCSS 2004.
Does this clarification affect all SCSS accounts?
Yes, it applies to all SCSS 2004 accounts where the depositor dies before maturity, regardless of the bank handling the account.
When was this clarification issued?
RBI issued this circular on April 30, 2007, referencing Government of India's clarification on the matter.
📜 Read the original circular — full text as issued by RBI
RBI/2006-2007/360
DGBA.CDD. H-15824/15.15.001/2006-07
April 30, 2007
The General Manager
Government Accounts Department, Head Office
State Bank of India / State Bank of Indore / State Bank of Patiala
State Bank of Bikaner & Jaipur / State Bank of Saurashtra
State Bank of Travancore / State Bank of Hyderabad / State Bank of Mysore
Allahabad Bank / Bank of Baroda / Bank of India / Bank of Maharashtra/
Canara Bank / Central Bank of India / Corporation Bank / Dena Bank / Indian Bank/
Indian Overseas Bank / Punjab National Bank / Syndicate Bank /UCO Bank /
Union Bank of India / United Bank of India / ICICI Bank Ltd / Vijaya Bank
Dear Sir,
Senior Citizens Savings Scheme, 2004 -
Clarification in respect of rate of interest in death cases.
Please refer to rule 8 (3) of Senior Citizens Savings Scheme, 2004 (SCSS) framed by Government of India, Ministry of Finance, vide Notification G.S.R. 490 (E) dated August 2, 2004, in respect of closure of SCSS account in case of death of a depositor before maturity.
2. In this connection, Government of India, Ministry of Finance has, further, clarified that in cases where the depositor has expired before the maturity of the deposits and the nominee / legal heir approach the banker for closure of the deposit account, the nominee / legal heir in such cases is entitled to the benefit of Saving Bank rate of interest for the period commencing the date of death of the depositor to the date of closure of the account under SCSS, 2004.
4. The contents of this circular may be brought to the notice of designated branches of your bank for information and compliance.
5. Please acknowledge receipt.
Yours faithfully,
(Imtiyaz Ahmad)
Assistant General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2006-2007/360 · issued 30 Apr 2007. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=3466&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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