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Abhibyakti Singh

Abhibyakti Singh

Executive Assistant, LXME

We can all agree that women are good savers! For years, they have been saving in nooks and corners of their homes and secretly setting aside money for their dreams & goals. In 2023, the Government of India introduced the post office mahila scheme i.e. Mahila Samman Savings Scheme a woman-oriented savings scheme to encourage savings among women while giving them an opportunity to earn fixed interest. Let’s discuss what are the features and offerings of this scheme!

What is Mahila Samman Savings Certificate Scheme (MSSC)?

Mahila Samman Saving Certificate scheme is a one-time small savings scheme for women and girls announced in Budget 2023. It will be available for 2 years i.e. from April 2023 – March 2025.

What are the features of MSSC:

  • Backed by Government: This scheme is offered by the Government of India with little credit risk.
  • Minimum amount: ₹1000 and in multiples of 100.
  • Maximum amount: ₹2,00,000
  • Interest Rate: 7.5% p.a. compounded quarterly and credited to the account.
  • Maturity period: 2 years from the account opening date.
  • No. of accounts: Any number of accounts can be opened subject to a maximum deposit limit of ₹2,00,000 and a time gap of 3 months shall be maintained between the existing account and the opening of another account.
  • Taxation: No deductions/exemptions are applicable as per Sec 80C. However, TDS is not deducted from the interest amount under the MSSC scheme.
  • Nomination: Facility available for a maximum of 4 nominees per account.

An example of MSSC Returns:

Gita is a 25-year-old IT employee, who wants to invest in Mahila Samman Savings Certificate. She decides to invest Rs. 2,00,000. As the Mahila Samman Saving Scheme interest rate is 7.5% p.a., her interest amount for the two years is Rs. 32,044. At the end of the two years, Gita’s maturity amount will be Rs. 2,32,044 (2,00,000+32,044).

Who is eligible for the scheme?

  • Women above the age of 18 years
  • In the case of a minor girl, the guardian can open an account on her behalf

How to open a Mahila Samman Saving Certificate Scheme (MSSC)?

Where can you open an account?

You can open an account at post offices and certain qualified banks. Banks offering MSSC include Bank of India, Bank of Baroda, Canara Bank, Punjab National Bank, Union Bank of India and Central Bank of India.

What are the documents required?

  • Know Your Customer (KYC)
  • Aadhar Card
  • Pan Card
  • Address Proof – Driver’s License, Electricity bill, etc.
  • Pay-in-slip

What are the options for Premature Closure or Withdrawal?

A partial withdrawal facility is available where 40% of the eligible balance can be withdrawn after 1 year from the date of account opening.

Premature closure is possible in the following cases –

  1. After 6 months of account opening without giving any reason. In such a case, an interest of 5.5% p.a. will be paid.
  2. Death of the account holder
  3. On extreme compassionate grounds like life-threatening disease or death of guardian upon production of relevant documents. In such a case, interest will be paid on the principal amount.

Mahila Samman Saving Scheme Benefits

Safe Option for Investment –

MSSC is a scheme offered by the government, meaning that it is a safe investment option with little to no credit risk.

Fixed Rate of Return –

MSSC offers an interest rate of 7.5% p.a.  

Promotes welfare:

The scheme aims to empower women to start savings and gives them an opportunity to earn fixed returns on their savings.

To conclude, MSSC is one of the options that a woman can consider for getting fixed interest on their savings. This investment becomes a part of their debt/fixed income component, therefore, in order to diversify, women should add equity and gold to their portfolio as per their goals, time horizon, and risk appetite.

Check out LXME’s Rs 100 Equity and Gold Funds to diversify your portfolio across different asset classes.

FAQ’s

Is Mahila Samman certificate tax free?

There’s no TDS deducted in this scheme because one is required to pay TDS only if the interest income exceeds Rs. 40,000 in a year. Since the maximum deposit amount for MSSC is only Rs. 2,00,000, it is not possible for the interest income to exceed Rs. 40,000. As a result, TDS is not deducted but the interest income gets added to the total income.

Is it good to invest in Mahila Samman savings certificate?

MSSC is backed by the government and offers an interest rate of 7.5%. However, it will not beat inflation rates and as such if a woman decides to invest in MSSC, she should ensure that she also invests in other asset classes such as equity, debt, gold etc. to diversify her portfolio.

What is Mahila Samman Post Office Scheme?

Post Office Mahila Scheme is simply the Mahila Samman Savings Certificate scheme opened through post offices.

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