Mahila Samman Savings Certificate: A Detailed Overview
- Dipali Waghmode
- Apr 21
- 10 min read
Updated: 7 days ago
The Indian government has taken a significant step to empower women and ensure their financial stability through the Mahila Samman Savings Certificate Scheme, also called Mahila Samman Nidhi. This modest savings plan, introduced in April 2023 as a part of the Azadi ka Amrit Mahotsav festivities, offers women from all walks of life a chance Women (or the guardians of a girl child) can open accounts in post offices and qualifying banks under this small savings plan and receive enticing rewards. The maximum amount placed into the MSSC account over a two-year maturity term is Rs. 2,00,000. The MSSC Scheme may be the ideal option for you as a woman seeking an investment route that provides alluring profits while guaranteeing the security of your funds. This article will cover the Mahila Samman Savings Certificates tax benefits, eligibility, necessary documentation, features, and more.
Table of Content
Features of Mahila Samman Savings Certificate
The key features of the Mahila Samman Savings Certificate are listed as follows:
Program Supported by the Government: The Mahila Samman Savings Certificate program is a modest savings plan supported by the government. There is no credit risk related to it.
Eligibility: A woman or the legal guardian of a minor female child may open a Mahila Samman Saving Certificate scheme, but only in the name of a girl child or a woman.
Limits on Deposits: The Mahila Samman Savings Certificate requires a minimum deposit of one thousand rupees, expressed in multiples of one hundred. An account user may deposit up to Rs. 2 lakh into any or all of their Mahila Samman Savings Certificate accounts. After at least three months have passed since the opening of the first Mahila Samman Savings Certificate account, a woman or the guardian of a girl child may open a second one.
Maturity: The maturity period of this account is two years. After two years from the date of account opening, the account holder will receive the maturity amount.
Retraction: The Mahila Samman Saving Certificate program offers a partial withdrawal option. A year after the account opening date, the holder can withdraw up to 40% of the account amount.
Interest Rate: A fixed interest rate of 7.5% per annum is applicable to this account. This rate is significantly greater than bank fixed deposits (FDs) and other acclaimed small savings plans. The interest is credited quarterly and gets paid when the account is closed.
Mahila Samman Savings Certificate Scheme Eligibility
The requirements that have to be met to qualify for the MSSC scheme are listed below:
Both women and girls' children are permitted to participate and profit from it.
The Mahila Samman Nidhi Scheme is open to all Indian women residing in the country.
Any girl child ten years or older may also apply for the program and have an MSSC account made in her name.
Benefits of Mahila Samman Savings Certificate
Besides understanding the basics of any investment scheme, one must know the potential benefits it offers. When you see what this plan can accomplish for you, making a decision will be easy. Here are the benefits you can obtain by investing in Mahila Samman Savings Certificates:
This scheme enables you to obtain a competitive interest rate. Compared to many other savings choices, the interest rate of 7.5% annually is higher. Additionally, your money will grow quickly because the Mahila Samman Yojana compounds interest every quarter.
You don't need to stress over the risk of your investments. Concerns about market swings prevent you from investing in a high-yield asset. However, you can steer clear of these concerns using the MSSC Scheme. Being a government-backed savings program, you can ensure that money is well-protected.
If necessary, you have an easy way to withdraw the funds. The plan provides flexibility in addition to long-term savings. One year from the account opening date, you can withdraw up to 40%. It enables you to access your money in crises or unanticipated financial requirements.
The scheme has the objective to foster women's financial independence and inclusion. As such, it enables you to manage your money, accumulate a sizable savings account, and strive toward your financial objectives.
Mahila Samman Saving Certificate Scheme Tax Benefits
The MSSC Scheme is recognized as a secure and profitable investment choice. And there's more! There is a tax benefit also. Even though the MSSC Scheme is subject to TDS regulations, no TDS gets subtracted from interest earned under this plan. Section 194A of the Income Tax Act of 1961 contains the hint. This provision states that TDS does not get withheld when banks or post offices pay interest less than Rs. 40,000 (Rs. 50,000 for senior citizens). As you are already aware, this scheme allows you to invest up to Rs. 2,00,000, and you will receive interest at a rate of 7.5%. Your interest will be below the TDS threshold. The outcome is tax-free interest, which is a major benefit.
Banks Offering Mahila Samman Savings Certificate
Previously, the Mahila Samman Saving Certificate Scheme was provided only by the post office. After receiving clearance from the Ministry of Finance's Department of Economic Affairs, it is now accessible at a few branches of all state and eligible private sector banks.
Bank of Baroda: Current and new clients may open an MSSC account on their behalf or on behalf of a juvenile girl under the supervision of a female or male guardian.
Canara Bank: To support women's financial development, Canara Bank is pleased to provide the MSSC plan in all of its Indian branches.
Punjab National Bank: PNB has made the MSSC certificate available to its clients as an investment choice.
Bank of India: The MSSC Scheme has been introduced at all branches of Bank of India across the country. This is the first bank in the public sector to take this innovative step.
Union Bank of India: On June 30, 2023, Union Bank effectively introduced the MSSC program throughout all its branches in India.
Major banks guarantee greater accessibility and simplicity for women who want to take advantage of the MSSC Scheme's alluring characteristics.
Steps to Apply for Mahila Samman Savings Certificate
The MSSC Scheme offers a compelling argument for investment based on its features, benefits, and institutions. You can only take benefits if you understand the application procedure. Fortunately, the government has made the process straightforward and given you two options for opening an MSSC account: post offices and banks.
How to Open a Bank Mahila Samman Savings Certificate
Get the application for the Mahila Samman Savings Certificate at the bank location.
Complete the application form carefully, including the statement, nomination, money, and personal information.
After submitting the form and the required paperwork, deposit the money at the bank's branch office.
Obtain the Mahila Samman Savings Certificate, which is necessary for any upcoming correspondence and will act as evidence of investment in the scheme.
Mahila Samman Savings Certificate Opening Procedure at the Post Office
Visit a branch or obtain the "Application for purchasing the certificate" on the official Indian Post website.
Enter information such as name, payment, nominee, account type (Mahila Samman Savings Certificate), and post office address.
Send in the form along with the necessary documents.
Deposit the money in cash or by check.
Obtain the certificate as evidence of your investment.
Documents Required for Mahila Samman Savings Certificate Application
The following documents are required to apply for the Mahila Samman Savings Certificate:
Application form
Your passport-sized photo
Your proof of identity or KYC documents (passport, voter ID, PAN card, driver's license, or Aadhaar card)
KYC form for newly opened accounts
Pay-in slip and check or deposit amount
Premature Closure of Mahila Samman Savings Certificate
The following circumstances allow for the closure of a Mahila Samman Savings Certificate account before two years:
Six months after the account was opened without a valid reason. In this situation, a 5.5% interest rate will be applied.
When the account holder passes away, the interest gets paid on the principal amount.
When there is a grave humanitarian need, like
When the account holder has a serious illness.
Guardian's passing after presenting the necessary paperwork. In this scenario, the principal amount is used to pay the interest.
Mahila Samman Savings Certificate Calculation
The process of calculation of the Mahila Samman Savings Certificate is simple. We will explain it with an example. If you invest Rs. 2,00,000 under the scheme, you will receive interest set at 7.5% per year. Therefore, you will receive Rs. 15,000 in interest on the principal amount in the first year and Rs. 16,125 in interest in the second. Eventually, you will get Rs. 2,31,125 after the two years (2,00,000 for the initial investment plus 31,125 for interest). Thus, you would receive Rs. 2,31,125 as your maturity amount after two years.
Mahila Samman Savings Certificate Vs Other Small Savings Schemes
The following tables highlight the difference between the Mahila Samman Savings Certificate and other popular small savings schemes in India:
Mahila Samman Savings Certificate vs. NSC
Mahila Samman Savings Certificate | NSC |
Women and girl children are eligible | Any individual, including NRIs, are eligible |
7.5% interest rate | 7.7% interest rate |
2 years tenure | 5 years tenure |
Minimum deposit- Rs.1,000 Maximum deposit - Rs.2 lakh | Minimum deposit- Rs.100 Maximum deposit - No limit |
Allows 40% withdrawal after one year | Allows withdrawal in certain circumstances |
No tax deduction u/s 80C | Deductions of up to Rs.1.5 lakh u/s 80C |
Mahila Samman Savings Certificate vs. PPF
Mahila Samman Savings Certificate | PPF |
Women and girl children are eligible | Any individual Indian citizen is eligible |
7.5% interest rate | 7.1% interest rate |
2 years tenure | 15 years tenure |
Minimum deposit - Rs.1,000 Maximum deposit- Rs.2 lakh | Minimum deposit - Rs.500 Maximum deposit - Rs 1.5 lakh |
Allows 40% withdrawal after one year | Allows partial withdrawal after 7 years |
No tax deduction u/s 80C | Exempt-Exempt-Exempt (EEE) category u/s 80C |
Mahila Samman Savings Certificate vs. Sukanya Samriddhi Yojana
Mahila Samman Savings Certificate | SSY |
Women and girl children are eligible | Only a girl child before she attains 10 years is eligible |
7.5% interest rate | 8.2% interest rate |
2 years tenure | 21 years from opening the account/when the girl child turns 18 |
Minimum deposit - Rs.1,000 Maximum deposit- Rs.2 lakh | Minimum deposit- Rs.250 Maximum deposit - Rs.1.5 lakh |
Allows 40% withdrawal after one year | Allows withdrawal under certain circumstances |
No tax deduction u/s 80C | Exempt-Exempt-Exempt (EEE) category u/s 80C |
Mahila Samman Savings Certificate vs. Senior Citizen Savings Scheme
Mahila Samman Savings Certificate | SCSS |
Women and girl children are eligible | Senior citizens aged above 60 years are eligible |
7.5% interest rate | 8.2% interest rate |
2 years tenure | 5 years tenure |
Minimum deposit - Rs.1,000 Maximum deposit- Rs.2 lakh | Minimum deposit - Rs.1,000 Maximum deposit- Rs.30 lakh |
Allows 40% withdrawal after one year | Can be closed at any time |
No tax deduction u/s 80C | Deductions of up to Rs.1.5 lakh u/s 80C |
Conclusion
A significant step towards empowering women and girls throughout India, the Mahila Samman Saving Certificate Scheme is more than just a financial tool. As a woman, you may take charge of your financial future and contribute to society with this secure, easily accessible, and lucrative platform for achieving financial security. The beneficial effects will grow as more women like you invest in their futures through the Mahila Samman Scheme. Higher investment in healthcare, education, and entrepreneurship will result from improved financial security, making India more dynamic and just.
FAQ
Q1. What is the Mahila Samman Savings Certificate scheme?
The government introduced the one-time small savings plan for women, known as the Mahila Samman Savings Certificate scheme. The scheme has a two-year maturity period. This account can be opened with a maximum deposit of Rs. 2 lakh by a woman or the guardian of a girl child. The scheme has an annual interest rate of 7.5%.
Q2. Can a minor girl invest in the Mahila Samman Saving Certificate scheme?
Indeed, the MSSC Scheme's design encourages financial inclusion. As a result, the legal guardian of a juvenile girl can open an MSSC account and begin investing in the beneficiary's name.
Q3. What is the interest rate offered under the Mahila Samman Saving Certificate scheme?
The program provides a competitive annual interest rate of 7.5%. The interest is essentially tax-free and compounded weekly.
Q4. What is the minimum and maximum investment limit for the Mahila Samman Saving Certificate scheme?
Under the MSSC Scheme, you can open an account with as little as Rs. 1,000 and as much as Rs. 2,00,000.
Q5. Is Mahila Samman tax-free?
No, there is no tax deduction available for investments made with Mahila Samman Saving Certificates under Section 80C. However, since the interest earned under this scheme is less than Rs. 40,000, no TDS is deducted from the interest amount.
Q6. What is the primary benefit of the Mahila Samman Saving Certificate?
After two years, women will get a 7.5% annual interest rate on their one-time deposit. This plan offers a greater interest rate than many banks' two-year fixed deposit interest rates.
Q7. How can I open an account under the Mahila Samman Saving Certificate Scheme?
You have two options for opening an MSSC account: certain banks or the post office. The application form must be completed with your name, account type, nominee, payment information, and other details. This form is available online at the Indian Post website or in person at some banks' or post office branches. After that, you can send the form, the necessary paperwork, and the appropriate deposit. You will receive a certificate from the organization attesting to your investment in the plan.
Q8. How long is the investment tenure for the Mahila Samman Saving Certificate scheme?
You can invest for two years under the MSSC Scheme. It's crucial to remember that you have up to 40% of your money back after a year of account opening.
Q9. Are there any tax benefits associated with the Mahila Samman Saving Certificate scheme?
TDS is not subtracted from interest received under the MSSC Scheme because it is less than the Rs. 40,000 threshold. As a result, you can benefit from tax-free returns.
Q10. Can I open the Mahila Samman Savings Certificate online?
On the websites of the Post Office and the banks that provide this program, you can obtain the Mahila Samman Savings Certificate application online. You must print the application, complete it, and send it to the bank branch or post office closest to you.
Q11. Is the Mahila Samman Savings Certificate better than FD?
Compared to bank FDs, the Mahila Samman Savings Certificate has a higher interest rate of 7.5% annually. You can withdraw bank FDs whenever required, but the Mahila Samman Savings Certificate has a two-year lock-in term. One must choose their investment option based on their requirements and goals.
Q12. Can a parent open a Mahila Samman Savings Account for their minor child?
Parents can open a Mahila Samman Saving Account for their offspring. If the guardian or parent passes away, the account can be closed too soon.
Q13. How much corpus can be withdrawn from the Mahila Samman Saving account?
You can only remove 40% of your eligible sum within a year of creating your account.
Q14. When is the interest on the Mahila Samman Savings account credited?
Interest is credited to your account, compounded every three months, and paid to you when your account is closed.
Q15. What happens if you close your Mahila Samman Savings account after 6 months from opening?
When a Mahila Samman Savings account is closed early—that is, before six months have passed and without a reason—interest is given to you 2% less than the regular interest rate (7.5% - 2% = 5.5%).
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