TomorrowMakers

Mahila Samman Saving Certificate Announced in Budget 2023: A Complete Guide!

Finance Minister of India Nirmala Sitharaman announced a new scheme for women investors during her budget speech on February 1, 2023. The name of this one-time small savings scheme is Mahila Samman Saving Certificate (MSSC).

What is a Mahila Samman Saving Certificate (MSSC)? What does it Offer?

The Union Budget 2023-24 has declared Mahila Samman Saving Certificate to make women financially aware.

Basics of the Scheme

• Who should Invest: MSSC enables any individual to invest in the name of a girl child or a woman.
• Amount to Invest: Rs. 2 lakhs can be invested in the name of a girl child or a woman.
• Tenure: The investment can be made for 2 years.
• Interest Rate: This scheme will help you earn a 7.5% p.a. interest rate for two years.
• Partial Withdrawal: You can avail partial withdrawal facility in this scheme.
• Offer Availability: You can start investing in the MSSC scheme from April 1, 2023. This one-time scheme will be available for two years. This means it will be available till March 2025.
• Tax Exemption: This scheme does not offer tax deductions. Also, the returns from investing in Mahila Samman Saving Certificate (MSSC) are not tax free.

What are the Aims of the Scheme?

• With the vision for Amrit Kaal, Union Budget 2023-24 will help draw girls and women into the financial planning of Indian families. The conversation regarding this Mahila Samman Saving Certificate scheme within the family will likely bring women to a household's financial discussion.
• With the offered interest rate of 7.5%, Mahila Samman Saving Certificate will incentivise savings.
• This scheme will help low-income families create their financial reserves.
• MSSC is likely to help women from all social and financial strata to become more financially aware.

Mahila Samman Saving Certificate (MSSC) Calculation: How much would you Earn?

The calculation of your earning from the MSSC scheme is given below:

• You can earn Rs. 15,427 each year as interest income in the first and second years.
• At the end of two years, you'll earn Rs. 32,044 as interest income (at 7.5% per annum).
• Therefore, your investment of Rs. 2 lahks in the Mahila Samman Saving Certificate will become Rs. 2,32,044 at the end of two years.

MSSC Scheme vs Bank FDs vs Post Office Schemes: Comparison

• Investing in Mahila Samman Saving Certificate will provide you with an interest rate that is better than the average rates provided by most banks.
• The average interest rates given by a one-time small savings scheme of major public or private sector banks usually hover in the 5-7% range.
  
  The annual interest rate on a 2-year deposit in:
  • Axis Bank FD is 7.26%
  • ICICI Bank FD is 7%
  • Kotak Bank is 6.75%
  • SBI FD is 6.75%
• MSSC is offering a 7.5% p.a. interest rate on a two-year investment.
• The interest rate of 7.5% offered by the small savings scheme Mahila Samman Saving Certificate is better than most of the one-time small savings schemes of the post office. Let’s take a look:
  
  The interest rate of:
  • Kisan Vikas Patra (KVP) is 7.2%
  • NSC (National Savings Certificate) is 7%
  • PPF (Public Provident Fund) is 7.1%
  • However, certain post office small savings schemes offer better rates than MSSC, such as:
  • Sukanya Samriddhi Yojana (SSY): 7.6%

You should keep in mind that most of the small savings schemes of the post office have longer tenures. Tenure of PPF, NSC, and KVP are 15-years, 5-years, and 10-years respectively. SSY's tenure is at least 15 years.  

Mahila Samman Saving Certificate: How to Open an Account?

You can open an MSSC account at any post office or bank. The process of opening a Mahila Samman Saving Certificate account is given below:

• Visit your nearest post office or bank
• Ask for the form of Mahila Samman Bachat Patra Yojana
• Fill up the following details:
  • Personal details
  • Financial details
  • Nominee details
  • Identity proof
  • Address proof

You can deposit the money either in cheque or cash.