Now, get Mahila Samman Savings Certificate at your bank

One can deposit up to Rs 2 lakh in the scheme for a period of two years at a fixed rate of 7.5 percent per annum, which will be compounded quarterly.

The Ministry of Finance on June 30 notified that now all scheduled banks are eligible to issue the Mahila Samman Savings Certificate, 2023. Now, the Mahila Samman Savings Certificate (MSSC) scheme will be available for subscription in post offices and all banks. The move aims to enable enhanced access to the scheme for women.

On July 4, Bank of India has launched MSSC, 2023.  It is the first bank to operationalize this scheme across all its branches, making them authorized to open accounts under the MSSC, 2023.

In order to encourage women to save, the Budget 2023 announced a new small savings scheme exclusively for women (and girl children), called MSSC. The scheme has been in operation since April 1, 2023, through the Department of Post.

This is the second female-only small savings scheme after Sukanya Samriddhi Yojana which was launched in 2015 as part of the ‘Beti Bachao Beti Padhao’ campaign to encourage parents to invest in their daughters’ education and marriage-related goals and expenses.

What’s the offer?

The scheme allows deposits under the name of a woman or a girl child. You can deposit up to Rs 2 lakh for a period of two years at a fixed rate of 7.5 percent per annum, which will be compounded quarterly. Therefore, the effective interest rate will be approximately 7.7 percent.

There are no tax benefits, but partial withdrawal is allowed during the investment tenor. The account holder is eligible to withdraw a maximum of up to 40 percent of the eligible balance in the scheme account.

The Mahila Samman Savings Scheme is a one-time scheme available for a tenure of two years. One can apply for the scheme on or before March 31, 2025.

“Mahila Samman Savings Certificate with a higher rate of interest will encourage more women to adopt formal financial saving instruments,” said Deepak Amin, Founder and Managing Director of Light Microfinance.

Fixed deposits Vs MSSC

The Mahila Samman Savings Certificate is a suitable alternative to fixed deposits (FDs) for the short term. “The returns are higher than bank FDs and partial withdrawal makes liquidity less of a concern,” said Adhil Shetty, Chief Executive Officer, Bankbazaar.com.

Also read | Is Mahila Samman Savings Certificate a hit or miss?

Should you invest?

“Given the tenure of two years, this short-term savings product is at best at par with bank FDs and Post Office time deposits of similar tenure. And, as per the latest rates, both these offer lower rates than the MSSC,” said Dev Ashish, Founder, StableInvestor.

So, for women looking to park money for just two years, the Mahila Samman Certificate can be looked at as a 1-2 year FD alternative.

“But given the upper cap of Rs 2 lakh, that, too, as a one-time investment, this scheme appears to be targeted at women, who generally do not park money in formal small savings instruments,” said Ashish adding, in that sense, this is a well-intentioned product that may push such women to adopt this as well as other formal saving and investment instruments in future.