Introduced in the Union Budget 2023-24, the Mahila Samman Savings Certificate (MSSC) is aimed at empowering women by offering them a unique savings scheme. It was officially launched on April 1, 2023, and it’s open till March 2025.
The Union Finance Ministry has authorised all public sector banks and participating private sector banks to open MSSC accounts. The facility is also available at post offices across the country.
The scheme has been tailored for women to encourage savings and to increase financial inclusion. The MSSC accounts can be opened by women or a minor girl by a legal guardian.
It currently offers better returns than most bank fixed deposits (FDs) and the post office term deposit of two years. However, senior citizens might find better returns in the Senior Citizens’ Savings Scheme (SCSS) that provides 8.2 per cent return, but with a five-year maturity period.
Key Features of MSSC
1. Investment Window:
MSSC is open for investment between April 1, 2023, and March 31, 2025.
2. Investment Limits:
You can invest in the MSSC scheme with just Rs 1,000 and in multiples of Rs 100 thereafter. A lump sum investment of Rs 2 lakh can also be made, which is the maximum limit.
3. Tenure and Interest rate
The tenure of an MSSC investment is two years. Currently, MSSC offers an interest rate of 7.5 per cent per annum that is compounded quarterly and paid upon maturity.
5. Partial Withdrawal
You may withdraw up to 40 per cent of the balance after one year of investment.
6. Premature Closure
• In case of death of the account holder before maturity or in extreme compassionate cases like death of the guardian, life threatening diseases or other severe reasons the account is allowed to be closed without penalty.
• Alternatively, you may close the account after six months without any reason, but the interest rate will be lowered to 5.5 per cent.
The official announcement does not explicitly mention the taxation structure for MSSC. Therefore, it remains uncertain whether there would be any special tax benefits under Section 80C of the Income Tax Act, 1961.
Every year your bank will convert the interest earned and add it to your taxable income that will be taxed according to your income slab.
How much will you get after investing Rs 2 lakh in MSSC?
The MSSC scheme operates as a fixed or time deposit in terms of interest calculations. The interest accrual is calculated with the principal quarterly. For instance, if you invest Rs 2 lakh, the interest for the first quarter will be Rs 3,750. After the second quarter, the interest would be calculated on the total amount that would include the principal amount and the interest earned. This process would be repeated every quarter, resulting in a maturity value of Rs 2.32 lakh at the end of two-year period.
How to invest in MSSC?
To invest in the MSSC scheme, take a copy of your PAN card and Aadhaar card to the nearest post office or any public sector bank and fill a deposit amount cheque and ask for an account opening form. Submit the form along with the required documents and deposit the amount.