- Date : 26/04/2023
- Read: 3 mins
The Mahila Samman Savings Certificate (MSSC) is a government scheme to encourage investment among women and provide them with a safe and secure option.
Ladies, have you heard of the Mahila Samman Savings Certificate, the latest scheme designed exclusively for women investors? The government introduced this scheme in the Union Budget 2023 to encourage investment among women and provide them with a safe and secure option to invest their money. With an interest rate of 7.5% per annum, compounded quarterly, and a maximum investment limit of Rs. 2 lakhs, the Mahila Samman Savings Certificate is becoming the preferred option for Indian women. Keep reading to understand the features of this scheme.
The MSSC scheme: Who it's for
The Mahila Samman Savings scheme allows women and female minors to open an account. Families can open a maximum of two accounts, but if female twins or triplets are born, more than two accounts can be opened.
Comparing MSSC returns with other small-saving schemes and Bank FD
The MSSC scheme has a short tenure of two years, which can be compared with two years of bank fixed deposits (FDs) (7% for SBI) and a two-year time deposit with a post office (6.9%). In the current scenario, the MSSC interest rate of 7.5% is better than both.
Comparison of various small-savings schemes (including MSCC) on various parameters
As is evident from the above table, MSSC offers better interest rate than other comparable small-savings schemes. It is worth mentioning here that although Senior Savings Scheme offers better interest rate (8.2%) but has not been included above because of its limited eligibility criteria.
Also Read- Detailed articles on returns from various small-saving schemes.
Accounts under the MSSC scheme
Under the MSSC scheme, only single accounts and not joint accounts are allowed.
According to a notification in the government's gazette, while the Mahila Samman Savings scheme does allow for multiple accounts, a time gap of three months must be observed between the opening of each account.
Understanding the withdrawal and closure rules of the MSSC scheme
The holder of an account that has been open for a year but has yet to mature may withdraw up to 40% of the balance by submitting a Form-3 application. A small penalty fee will be charged for this withdrawal.
Under the Mahila Samman Savings scheme, an account can't be closed prematurely except in cases of death of the account holder or extreme humane grounds such as life-threatening illnesses or the death of a guardian. Premature closure may be permitted after documentation and written reasoning. Interest on the principal amount will be payable at the rate applicable to the scheme.
Premature closure for any other reason (other than those mentioned above) is permitted after six months after opening the account. Still, the MSSC interest rate will be 2% lower than specified.
Tax rebates under Section 80C for investments in the MSSC scheme
On April 5, 2023, the Ministry of Finance announced that investments made under the MSSC scheme are not eligible for tax deductions under section 80C of the Income Tax Act. This change means that any interest earned on the investment will be taxable. You won't be charged TDS if you have invested in only one account, the interest rate is 7.5%, and the account balance is less than Rs. 2 lakhs.
Also Read: Know more about 80C tax benefits
The Mahila Samman Savings Certificate is a new small-savings scheme for women and minors. Families can open two accounts or more if twins/triplets are born. It has a short tenure of two years, with an interest rate of 7.5%. Premature closure is only allowed in certain cases, with a penalty for early withdrawal. The scheme is not eligible for tax rebates under section 80C.
Related Article: Budget 2023 and investments: what's the good news?
Ladies, have you heard of the Mahila Samman Savings Certificate, the latest scheme designed exclusively for women investors? The government introduced this scheme in the Union Budget 2023 to encourage investment among women and provide them with a safe and secure option to invest their money. With an interest rate of 7.5% per annum, compounded quarterly, and a maximum investment limit of Rs. 2 lakhs, the Mahila Samman Savings Certificate is becoming the preferred option for Indian women. Keep reading to understand the features of this scheme.
The MSSC scheme: Who it's for
The Mahila Samman Savings scheme allows women and female minors to open an account. Families can open a maximum of two accounts, but if female twins or triplets are born, more than two accounts can be opened.
Comparing MSSC returns with other small-saving schemes and Bank FD
The MSSC scheme has a short tenure of two years, which can be compared with two years of bank fixed deposits (FDs) (7% for SBI) and a two-year time deposit with a post office (6.9%). In the current scenario, the MSSC interest rate of 7.5% is better than both.
Comparison of various small-savings schemes (including MSCC) on various parameters
As is evident from the above table, MSSC offers better interest rate than other comparable small-savings schemes. It is worth mentioning here that although Senior Savings Scheme offers better interest rate (8.2%) but has not been included above because of its limited eligibility criteria.
Also Read- Detailed articles on returns from various small-saving schemes.
Accounts under the MSSC scheme
Under the MSSC scheme, only single accounts and not joint accounts are allowed.
According to a notification in the government's gazette, while the Mahila Samman Savings scheme does allow for multiple accounts, a time gap of three months must be observed between the opening of each account.
Understanding the withdrawal and closure rules of the MSSC scheme
The holder of an account that has been open for a year but has yet to mature may withdraw up to 40% of the balance by submitting a Form-3 application. A small penalty fee will be charged for this withdrawal.
Under the Mahila Samman Savings scheme, an account can't be closed prematurely except in cases of death of the account holder or extreme humane grounds such as life-threatening illnesses or the death of a guardian. Premature closure may be permitted after documentation and written reasoning. Interest on the principal amount will be payable at the rate applicable to the scheme.
Premature closure for any other reason (other than those mentioned above) is permitted after six months after opening the account. Still, the MSSC interest rate will be 2% lower than specified.
Tax rebates under Section 80C for investments in the MSSC scheme
On April 5, 2023, the Ministry of Finance announced that investments made under the MSSC scheme are not eligible for tax deductions under section 80C of the Income Tax Act. This change means that any interest earned on the investment will be taxable. You won't be charged TDS if you have invested in only one account, the interest rate is 7.5%, and the account balance is less than Rs. 2 lakhs.
Also Read: Know more about 80C tax benefits
The Mahila Samman Savings Certificate is a new small-savings scheme for women and minors. Families can open two accounts or more if twins/triplets are born. It has a short tenure of two years, with an interest rate of 7.5%. Premature closure is only allowed in certain cases, with a penalty for early withdrawal. The scheme is not eligible for tax rebates under section 80C.
Related Article: Budget 2023 and investments: what's the good news?
