Why Choose Mahila Samman Savings Certificate over FD, NSC, PPF, and Senior Citizen Scheme? Top 5 FAQs Answered

Mahila Samman Savings Certificate (MSSC) is a one-time small-savings scheme. This government-backed scheme aims to empower women. Nirmala Sitharaman, the Union Finance Minister of India, announced its launch while presenting the Union Budget 2023–24.

Top 5 FAQs on the Mahila Samman Savings Certificate

FAQ #1: What are the top 10 major features of the Mahila Samman Certificate?

Mahila Samman Savings Certificate has seven major features:

1. Interest Rate: You can earn a 7.5% per annum fixed interest rate on your deposit by opening a Mahila Samman Certificate account.
    
2. Opening Date: Start investing in MSSC from April 1, 2023.
    
3. Tenure:
   • You can invest in this one-time scheme for two years. 
   • You can open an account of Mahila Samman Savings Certificate anytime from April 1, 2023 to March 31, 2025. 
      
4. Maturity Date: You'll receive your maturity amount two-years from the date of opening your MSSC account. If you open your account on October 10, 2023, your account will mature on Oct 10, 2025.
    
5. Maximum Deposit Amount: The upper deposit limit is Rs. 2 lakhs.
    
6. Number of MSSC Accounts an Individual can Open: You can open multiple MSSC account over the period of 2-years (April 1, 2023 to March 31, 2025). However, you can open a new account only after a gap of three months from the date of opening of your last MSSC account. During these two years, you can open one or multiple MSSC accounts. The total amount of money you can invest through multiple Mahila Samman Savings Certificate account is Rs. 2,00,000. Suppose, you opened an account of Mahila Samman Savings Certificate on April 5, 2023 and invested Rs. 25,000. You can open your next MSSC account on July 5, 2023 of an amount of Rs. 1,75,000 or less. You can open as many such accounts as you wish.
    
7. Eligibility: You can open an account in the name of your minor girl child (as a guardian) or any woman under this small-savings scheme and make payments on their behalf. Any woman can open MSSC accounts on or before March 31, 2025.
    
8. Account Type: Single Holder Type Account
    
9. Withdrawal Facility: You can partially withdraw funds from this scheme after one year from the tenure completion date. The maximum amount of money you can withdraw is 40% of your eligible balance.
    
10. Credit Risk: The Mahila Samman Savings Certificate scheme has no credit risk because it is government-backed.

Also Read: New MSSC Scheme Announced In The Budget 2023

FAQ #2: How to open a Mahila Samman Savings Certificate account?

You can invest in the MSSC and earn a fixed interest rate of 7.5% p.a. by creating an account at any one of the 1.59-lakh post offices or branches of an authorised-bank in India.

Step #1: Mahila-Samman Bachat-Patra-Yojana Form

Visit the nearest post office or bank branch and ask for the form "Mahila-Samman Bachat-Patra-Yojana."

Step #2: Fill Up the Details

Fill up the form by providing your personal, nominee, and financial details.

Step #3: Submit Documents with the Form

You must submit multiple documents with the filled-up Mahila-Samman Bachat-Patra-Yojana form, such as Identity/address proof, etc.

Step #4: Amount Deposit

You have to choose an amount you are willing to invest. Pay through cheque or cash.

Step #5: Receive Certificate

Once all the steps mentioned above are completed and submitted, you'll receive a certificate. It is a proof that you invested a certain amount of money (up to Rs. 2 lakhs) in this one-time small-savings scheme for women.

FAQ #3: How much can you earn by investing in Mahila Samman Savings Certificate?

By investing Rs. 2 lakhs in MSSC, you can earn a fixed interest rate of 7.5% for 2 years (April 1, 2023 to March 31, 2025).  

• 1st-Year Interest Earning: You'll earn Rs. 15,000 on the principal amount (say, Rs. 2,00,000).
• 2nd-Year Interest Earning: You’ll receive Rs. 16,125 as interest income.
• Total Interest Earning: Your total interest earning will be Rs. 31,125.
• Total: At the end of two years, you’ll receive Rs. 2,31,125.

FAQ #4: What is the impact of the Mahila Samman Certificate on FDs and other small-saving schemes?

• MSSC versus FDs: MSSC will have minimal effect on investments in fixed deposits. This is mainly because most leading banks in India already offer competitive rates for a tenure similar to MSSC.
   
• MSSC versus NSC/PPF: You may witness a shift in investment towards Mahila Samman Certificate over Public Provident Fund (PPF) and National Savings Certificate (NSC) among woman investors. 

1. While MSSC offers a 7.5% yearly interest rate, PPF and NSC offer 7.1% and 7.0% p.a., respectively.
2. While the tenure of MSSC is just 2 years, the tenures of PPF and NSC are 15 and 5 years, respectively. 

• MSSC vs SCSS: MSSC is unlikely to significantly affect investment in the Senior Citizen Savings Scheme (SCSS). This is because the yearly interest rate provided under SCSS is 8%. However, some women above 60 years may divert some of their investment under MSSC because it offers a partial withdrawal option.

Also Read: Senior Citizen Can Earn Rs. 70K a Month Through These Investments

FAQ #5: Does the Mahila Samman Certificate have any tax benefits?

MSSC's tax structure still needs to be clarified. Small-saving schemes generally provide tax benefits under the Income Tax Act's Section 80C.