Mahila Samman Savings Certificate: Is it really beneficial for Indian Women?

According to a survey conducted by SEBI in 2017, it was found that 95% of the population prefers bank deposits over any other investment option. This goes to show that whenever we look into the various avenues to invest our hard-earned money, we generally prefer investing in safer options. Government schemes are one of those options, as it comes with extremely low risk.

With 3.25 crore accounts opened under the Sukanya Samriddhi Yojana and deposits worth ₹1.62 lakh crore having been made as of December 2022 under this scheme, it seems that government schemes have a greater favour among the various investors. For a little context on how much government savings schemes contribute, according to the data from the Reserve Bank of India - in March 2022, the total bank deposits reached an all-time high of ₹184 lakh crore. This is just from one scheme, by the way!

However, for all these saving schemes, there is a severe disparity when it comes to gender equality. The Statistics Ministry's report reveals that women own just 1/3 of deposit accounts and 1/5 of total deposits in scheduled commercial banks.

From the facts above, we can consider that the participation of women in investment decisions has been uneven all over India. So, to promote investing among female investors, the Indian government has come up with a great initiative.

Today, I’ve got you covered with another central government scheme especially announced for women in India. The primary vision of this scheme is to empower women and girls financially. Read the article below to get more insightful details about the scheme. 

Mahila Samman Savings Certificate: Everything you need to know

Mahila Samman Savings Certificate (MSSC) is a government-backed small savings scheme available for women & girls in India. The Union finance minister, Smt. Nirmala Sitharaman, while addressing her union budget speech 2023-24 announced this scheme to honor the “Azaadi ka Amrit Mahotsav”.

The Mahila Samman Savings Certificate is a one-time investment scheme for Indian females available for a tenure of 2 years. The scheme will also run for a duration of 2 years starting from April 2023 to March 2025. A female investor can earn a fixed interest of 7.5% under this scheme.

“Does that mean, I will not be able to invest in the scheme anymore because the date has already passed?”, you might ask. The answer is no, there is still some time before that door closes. 

The government will accept deposits starting from 1st April 2023 till 31st March 2025. After March 2025, the government may choose to extend the dates, if necessary. But, as of now, this scheme is available for only 2 years.

Features of Mahila Samman Savings Certificate

Here are the salient features of MSSC that set it apart from other government saving schemes:

1. Eligibility: The MSSC certificate can be opened under the name of a girl or a woman. In case, any parents want to open an MSSC account for their girl child, the name of her mother should be mentioned while opening an account, since she is under 18 years of age.

2. Government Backed Scheme: This scheme was announced by the Central Government of India during the Union Budget 2023-24 address. This reduces the risk of fraud or misappropriation of funds.

3. Deposit Limits: The Mahila Samman Savings Certificate (MSSC) scheme can accept a minimum deposit of ₹1000 and more in multiples of ₹100. The maximum deposit allowed under the scheme is ₹2,00,000 on all accounts held by a single account holder. A girl or a woman can open a new account under the MSSC scheme after a minimum gap of 3 months, considering the previous account opening date.

4. Maturity: The maturity period of a Mahila Samman Savings Certificate scheme will be two years. The interest amount along with the principal will be paid after 2 years of maturity to the account holder.

5. Withdrawal: The account holder may request a partial withdrawal of up to 40% of the invested amount after one year from the date of account opening.

6. Account Closure: After six months from the account opening date, the account holder may ask for the closure of the scheme with a penalty of up to 2%. The approximate interest rate will be 5.5% (instead of 7.5%)

The MSSC scheme has been made available to all the 1.59 lakh post offices present in the country and is operational since April 01, 2023, through the Department of Post. Interested female investors can start investing money under the scheme by submitting an account opening form, KYC documents (Aadhar & PAN card), and a Pay-in-Slip along with the deposit amount at the nearest post office located.

Now you might wonder, “Can I apply under the MSSC scheme in a bank? Or which banks are providing the Mahila Samman Savings Certificate?”

Here’s the list of the banks that have started offering this scheme to the general public:-

• Punjab National Bank
• Union Bank of India
• Canara Bank
• Bank of  Baroda
• Bank of India

Now, you must be wondering if this scheme is the same as any other investment scheme by the government. Here comes the exciting part of this story.

This investment scheme primarily focuses on giving financial stability to adult girls and women. The interest accrued on the scheme compounds on an annual basis, which is the best part of the scheme. If you compare the returns under the scheme with the returns of an FD, this scheme is performing really well.

Given below are different cases for the various amounts you can refer to if you are interested in the MSSC scheme:-

Pre-mature closure of MSSC

The government has also allowed the pre-mature closure of an account under the MSSC scheme under the following conditions:

• On the death of the account holder
• If the account holder is suffering from a life-threatening disease
• On the death of the guardian (relevant documents required)
• Note: The interest shall be payable on the principal amount.
• After completion of 6 months, without any proper reason - there will be a penalty charge of 2% on the scheme interest.

Drawbacks of the scheme

Every investment instrument has its positive and negative aspects, and so does this scheme. The potential drawbacks of the scheme are:

• There are no tax benefits available under the scheme.
• The penalty after the closure of the account under the scheme is 2%
• Only 40% of the corpus is eligible to be withdrawn, after the completion of the first year.

How is the scheme doing right now?

The scheme has been getting a strong response from the general public. According to a senior government official’s  report to Deccan Herald- the scheme has been operational since 1st April 2023 and so far has seen deposits of ₹6,000 crore with 10.2 lakh accounts that have been opened under the scheme.

The Bottom Line

The government of India is continuously supporting women in order to expose them in the areas of education, work, and so on. The Indian government has launched various schemes and policies like SWADHAR Greh, Beti Bachao Beti Padhao, STEP, and Working Women Hostel Scheme, etc. for women in India over the past few years.

The Mahila Samman Savings Certificate scheme is one such scheme that will make the lives of women better by providing them the economic stability. Apart from this scheme, the women also require support from their families to grow in the field of their choice. To uplift the social status of women, we need to jointly support them as and wherever needed. 

We are curious to know if you have opened an account under the scheme, plan to do so, or not. Hope this article helps you in making an informed decision.