Mahila Samman Savings Certificate Scheme -(MSSC)?

Introduced during the Union Budget 2023, this scheme comes with a lot of benefits for women. As more women enter the workforce every year,

it makes it important for them to become financially independent and achieve their financial goals. In this blog, we will learn about what Mahila Samman Savings Certificate Scheme is, what its interest rate is, its benefits, and who is eligible for it.

What Is The Mahila Samman Savings Certificate Scheme (MSSC)?

In her budget, the Union Finance Minister, Smt. Nirmala Sitharaman announced the Mahila Samman Saving Certificate Scheme in her Budget Speech 2023-24.

The scheme was introduced for women and girls and it was announced to commemorate the Azadi ka Amrit Mahotsav. The Mahila Samman Savings Certificate is a one-time scheme available for two years, from April 2023 – March 2025. 

Accounts opened under this scheme will be single-holder accounts and they can be opened at the Post Office or any registered bank. Any woman can open a Mahila Samman account can be opened for herself or on behalf of a little girl.

What Is The Interest Rate Of The Mahila Samman Savings Certificate Scheme?

At present, the scheme offers a 7.5% interest annually. The interest will be compounded quarterly and credited to the account but it is payable at maturity.

How Does The Mahila Samman Savings Certificate Scheme Work?

The Mahila Samman Savings Certificate Scheme works like a fixed deposit, where interest gets calculated quarterly and accumulates along with the invested principal. For example, if you make an investment of ₹2 lakhs, the interest for the first quarter would be ₹3,750. 

For the second quarter, it will be calculated at ₹2,03,750 (₹2,00,000 + ₹3,750) since it is compounded quarterly. Hence, the maturity value at the end would be ₹2,32,000.

What Are The Features Of The Mahila Samman Savings Certificate Scheme?

The Mahila Samman Savings Certificate Scheme is a government-supported scheme that offers you a guaranteed rate of return. Hence, you do not have to worry about market fluctuations.

You can start investing in this scheme with a minimum amount of ₹1000 or any other amount in multiples of ₹100. However, you cannot make additional deposits after that. 

You can open multiple accounts, but the maximum total investment should be ₹2 lakhs. Each account that you open should have a three-month gap between the opening date of the existing account and the new account.

The Mahila Samman Savings Certificate Scheme comes with a lock-in period of two years. It means you will get your maturity amount after two years from the account-opening date.

However, you can partially withdraw your balance before maturity. You can withdraw up to 40% of the account balance after one year from the account opening date. 

You can close your investment in Mahila Samman Savings Certificate Scheme after six months of account opening without giving any reason.

However, the rate at which interest would be paid will get reduced by 2 percentage points. In the current scenario, it would be 5.5%.

You can also prematurely close your investment in the scheme without penalty in case of the account holder’s death or extreme compassionate grounds (life-threatening disease and/or death of the guardian). 

What Are The Tax Benefits Of The Mahila Samman Savings Certificate Scheme?

Generally, most small-savings schemes offer tax benefits. Meanwhile, no information has been provided by the government related to MSSC’s taxability.

So, this means that there may not be any tax benefit under Section 80C of the Income Tax Act. On top of that, the interest earned will be added to taxable income every year (on an accrual basis) and will get taxed at the applicable slab.

How To Open A Mahila Samman Savings Certificate Scheme?

You can follow the below steps to open a Mahila Samman Savings Scheme.

1. Download the application form either by downloading it from the official Indian Post website or by visiting the nearest Post Office branch.

2. Fill out the account opening form (Form I) and submit it on or before March 31, 2025.

3. Fill out the Post Office address under the ‘To The Postmaster’ section.

4. If you are a new account holder in Indian Post, you must also submit the KYC form.

5. Give all the necessary information, and indicate the account as ‘Mahila Samman Savings Certificate’.

6. Fill out the account type, payment, and personal details.

7. Fill out the declaration and nomination details.

8. Submit the completed form along with any required documentation.

9. Deposit the funds in the Post Office via cash or cheque.

10. Get the certificate as proof of your investment in the Mahila Samman Savings Certificate scheme.

What Are The Documents Required For Mahila Samman Savings Certificate Scheme?

Below are the documents required to open a Mahila Samman Savings Scheme account.

  • Account opening form
  • KYC documents, such as an Aadhaar card, voter ID, driving license, and PAN card
  • KYC form for new investors
  • Pay-in-slip

Comparing Mahila Samman Savings Certificate With Other Schemes

When compared to the other post office schemes, Mahila Samman Savings Certificate has the lowest tenure i.e. two years. The other options with such a tenure are only a bank fixed deposit or a two-year post office time deposit. However, Mahila Samman Savings Certificate helps you earn higher returns than both.

The two-year post office time deposit gets you 6.90% in 2 years and a fixed deposit may earn you around 7% while the Mahila Samman Savings Certificate helps you earn 7.50% per annum. So, the Mahila Samman Savings Certificate is the clear winner here.

When we look at the other schemes offered by the post office, the National Savings Certificate helps you earn 7.70% per annum for a tenure of five years.

Meanwhile, Public Provident Fund earns you 7.10% per annum for 15 years while Sukanya Samriddhi Yojana gives you 8% per annum for 21 years.

However, if you are a senior citizen, you can consider putting your money in Senior Citizen Savings Scheme, as you will be able to earn 8.20% per annum for 5 years. This scheme also offers tax benefits under Section 80C.

In The End…

The Mahila Samman Savings Certificate Scheme is a great scheme announced by the government for women and girls. It has a low tenure i.e. two years and helps you earn high interest.

You have time until March 2025 to open the scheme, so you can go to your nearest post office or any registered bank as soon as you can. Even though the lock-in period is two years, you can still withdraw your money prematurely in case of emergencies. 

We hope this blog helped you understand all about the Mahila Samman Savings Certificate Scheme, how you can start investing in it, its features, and how it fares against other post office schemes. 

If you wish to learn about other personal finance topics or investment instruments, you can check out our other blogs in our Blogs section or explore our Offerings section.

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