Mahila Samman Saving Certificate Scheme

You must have heard about the Azadi ka Amrit Mahotsav, which commemorated the 75th anniversary of Indian independence. The occasion surely called for celebrations. In these 75 years, India has achieved extraordinary feats in every field. But this success was not possible without the supreme work of women.

The government thus launched the Mahila Samman Saving Certificate Scheme (MSSC Scheme) to acknowledge the immense contribution of women towards national development and to empower them further. The scheme was announced under the Union Budget 2023-24 to help in financial inclusion and security for women.

This small savings scheme allows women (or guardians of a girl child) to open accounts in post offices and eligible banks to earn attractive returns. A maximum of ₹2,00,000 can be deposited in the MSSC account for a maturity period of 2 years. If you, as a woman, have been looking for an investment avenue that offers attractive returns while ensuring the safety of your money, the MSSC Scheme might be the perfect fit for you.

Features of the Mahila Samman Savings Certificate

The Mahila Samman Saving Scheme has been quite a success. As per the latest data, in just the first nine months of its launch, 22.5 lakh accounts were opened under the scheme with a deposit of over ₹14,500 crore. Now, you must be wondering what are the reasons behind it. The answer lies in the features of this scheme that make it inclusive and accessible to all.

• Eligibility: This scheme is open to all women and girls of all ages. A legal guardian can also open an account on behalf of a minor girl child.
• Investment Amount: The minimum amount of investment is ₹1,000, and the maximum investment amount is ₹2 lakh per account..
• Interest rate: The current interest rate offered by the MSSC Scheme is 7.5% per annum, compounded quarterly.
• Maturity period: The maturity period of the MSSC Scheme is 2 years.
• Tax benefits: No TDS is deducted from the interest received under this scheme. You must note here that investments under MSSC are not eligible for deductions under Section 80C.
• Investment options: This scheme can be purchased through authorized post offices and commercial banks.

Benefits of the Mahila Samman Saving Certificate Scheme

Okay, so now you have the basics of this scheme sorted out. Still not sure whether you should invest your hard-earned money in it? It will become easier to decide once you look at what this scheme can allow you to do.

Earn an Attractive Interest Rate

The interest rate of 7.5% per annum is higher than many other savings options available in the market. Moreover, as the interest is compounded quarterly under the Mahila Samman Yojana, your money will grow faster over time.

Don’t Worry about Investment Risk

It often happens that worries about market fluctuations stop you from investing in a high-return instrument. But, with the MSSC Scheme, you can avoid such worries. As it is a government-backed savings program, you can enjoy a high level of security for your investment.

Withdraw the Money if Required

While the scheme encourages long-term savings, it also offers flexibility. You can make a premature withdrawal of up to 40% after one year from the date of opening the account. It also allows you to access your funds in case of unforeseen financial needs or emergencies.

Become Financially Independent

The primary intent of the scheme is to promote financial inclusion and independence for women. Thus, it allows you to control your finances, build a substantial savings corpus, and work towards your financial goals.

Tax Benefits of Mahila Samman Saving Certificate Scheme

It is now established that the MSSC Scheme is a safe and rewarding investment option. But there’s more! It also comes with a tax advantage.

Though TDS provisions apply to the MSSC Scheme, no TDS is deducted from the interest received under this scheme. Confusing, right?

The clue lies in the Section 194A of the Income Tax Act, 1961 . According to this section, TDS is not deducted in cases where interest paid by banks or post offices does not exceed ₹40,000 (₹50,000 for senior citizens).

Now, you already know that you can only invest up to ₹2,00,000 under this scheme, on which you will earn an interest at a rate of 7.5%. Thus, your interest will always lie below the TDS threshold level. The result? Tax-free interest!

Premature Closure of Mahila Samman Savings Certificate

We all know that life is uncertain. It may happen that you invest in the scheme with the intention of receiving the money after 2 years. But even before that, an unexpected event occurs, and you need to close the account. Do you have a recourse in this case?

Yes, you do. The government designed the scheme with such emergencies in mind.

• You can close the account after six months of opening it without specifying any reason. In this case, you will have to bear a penalty of 2% and will receive an interest of 5.5%.
• The scheme also allows for account closure on compassionate grounds such as life-threatening disease or unfortunate demise of the account holder. The total interest is calculated on the principal amount in such cases. Penalty is also waived in case of unfortunate demise of the guardian.

Institutions Offering Mahila Samman Savings Certificate Scheme

The Mahila Samman Saving Certificate Scheme was previously only available at post offices. Now, following the approval from the Department of Economic Affairs, Ministry of Finance, it is also available at select branches of all public sector banks and qualified private sector banks.

• Bank of Baroda: Both existing customers and non-customers can open an MSSC account, either individually or on behalf of a minor girl, under the guardianship of a female or male.
• Canara Bank: Canara Bank proudly offers the MSSC scheme across all branches in India, demonstrating its commitment to women’s financial growth.
• Bank of India: Taking a pioneering role, Bank of India became the first bank in the public sector to launch the MSSC Scheme at all its branches nationwide.
• Punjab National Bank: PNB has also included the MSSC certificate as an investment option for its customers.
• Union Bank of India: Union Bank successfully launched the MSSC scheme across its branches across India on June 30, 2023.

This collaborative effort by major banks ensures wider accessibility and convenience for women seeking to participate in the MSSC Scheme and benefit from its attractive features.

How to Apply for Mahila Samman Savings Certificate?

Features, benefits, institutions: all this information has made a strong case in favor of investing in the MSSC Scheme. However, you can only avail yourself of these benefits when you have clarity on the application process. Thankfully, the government has kept the process pretty simple and provided you with two avenues to open an MSSC account: banks and post offices.

Process to Open Mahila Samman Savings Certificate at Banks

• Obtain the Mahila Samman Savings Certificate application from the bank branch.
• Carefully fill out the application form with personal details, payment information, declaration, and nomination details.
• Submit the form and prescribed documents, and deposit the amount to the bank’s branch office.
• Receive the Mahila Samman Savings Certificate that will serve as proof of investment in the Scheme and is relevant for all future communication.

Process to Open Mahila Samman Savings Certificate at Post Office

• Get the ‘Application for purchasing the certificate’ from the official Indian Post website or by visiting a branch.
• Fill details like post office address, name, account type (Mahila Samman Savings Certificate), payment, nominee.
• Submit the form with the prescribed documents.
• Deposit the amount through cheque or cash.
• Get the certificate as investment proof.

Documents Required for Mahila Samman Savings Certificate Account

• Application form
• Your passport-size photo
• Your identity proof or KYC documents (Aadhaar card, driving license, Voter ID, PAN card, or Passport)
• KYC form for new account holders
• Pay-in-slip along with deposit amount or cheque

Mahila Samman Savings Certificate Calculation

When you invest money, you would naturally want to know how much return you can expect at the end of the maturity period. It can help you plan your finances in advance and prepare for the future. The same is the case with the MSSC Scheme.

As the scheme offers a compound interest, you can calculate the total amount to be received on maturity using the following formula:

M = P * (1 + r / n) ^ nt

Where:

M represents the sum received on maturity,

P represents the principal sum,

r is the annual rate of return,

n is the number of times interest is compounded in a year,

t is the total duration in terms of years.

Suppose you invest ₹10,000 for a period of 2 years. The maturity amount would be:

Maturity amount = 10000 * (1 + 0.075 / 4) ^ 4*2

Maturity amount = ₹11,602.22 (approx.)

Note: Under the MSSC Scheme, the interest is compounded quarterly. This means that there will be a total of 4 compounding periods in a year. Thus, in the above example, the value of n=4

Way Forward

The Mahila Samman Saving Certificate Scheme is not just a financial instrument; it is a powerful step towards empowering women and girls across India. With this safe, accessible, and rewarding platform for building financial security, you, as a woman, can take control of your economic destiny and contribute meaningfully to society.

As more women like you invest in their future through the Mahila Samman Scheme, the positive impact will spread far and wide. Increased financial security will lead to greater investment in education, healthcare, and entrepreneurship, ultimately contributing to a more vibrant and equitable India.

Key Takeaways

• Open to all women and girls (even minors), this scheme promotes financial inclusion and security.
• It is now available at select banks & post offices (since June 2023) for more convenient investment.
• It offers attractive interest of 7.5%, 2-year maturity, tax-free returns, and flexible deposit options.
• Guardians can open accounts for minor girls, further promoting financial inclusion within families.

FAQs on Mahila Samman Saving Certificate Scheme