In the event of death of the account holder, the account shall be closed immediately  on application in Account Closure Form SB-7B on production of death certificate issued by the competent authority and the balance at the credit of the account and interest due thereon till the date of death shall be paid to the guardian.

(2). Interest for the period between the date of death of the account holder and date of closure of the account shall be paid at the rate applicable on Post Office Savings Account for the balance held in the account.

(3). If it is satisfied that in case of extreme compassionate grounds such as medical support in life threatening diseases of the account holder or death of the guardian that the operation or continuation of the account is causing undue hardship to the account holder, after complete documentation establishing the grounds for such closure, by order and for reasons to be recorded in writing, premature closure of the account may be allowed. Outstanding balance in the account with interest due as applicable to the Scheme shall be paid to the account holder or guardian, as the case may be. Such closure shall be sanctioned by Head of the Division for the accounts standing in SOs and their BOs / Sr. Postmaster or Chief Post Master or Director for the accounts standing in Gazetted HOs/GPOs.

(4). No premature closure of an account under above sub rule (3) shall be made before completion of five years from the date of opening of the account

Please click here for  the details of lock up periods of various POSB schemes and the impact of Premature Closure