Mahila Samman Savings Certificate Scheme: Details, Features

What is Mahila Samman Savings Certificate?

The Mahila Samman Savings Certificate, or Mahila Samman Nidhi, is a one-time small savings scheme that the Indian government launched in April 2023 to celebrate the Azadi ka Amrit Mahotsav. All women, including widows, married women, and women with disabilities, can participate in this scheme. In this scheme, people can deposit money upto Rs.2 lakhs in the name of a girl or a woman for herself for a period of 2 years at a fixed rate of interest.

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What are the Eligibility Criteria for Mahila Samman Savings Certificate Scheme?

Given below are the conditions that one has to fulfill to be eligible for the MSSC scheme -

• It allows participation from both women and girl children and lets them avail its benefits.
• All women who are residents of India are eligible to apply for the Mahila Samman Nidhi Scheme.
• Any girl child who is 10 years or older can also get an MSSC account opened in her name and apply for the scheme.

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What are the Benefits of Mahila Samman Savings Certificate?

There are various benefits of the MSSC scheme for women. Given Below are its main features and benefits -

• Eligibility: The Mahila Samman Savings Certificate can only be issued in the name of a girl child or a woman. Any woman or legal guardian of a minor girl can open an MSSC account in the beneficiary’s name.
• Government-Backed Scheme: MSSC is a one-time small savings scheme backed by the government. Therefore, it does not consist of any credit risk.
• Maturity Period: The maturity period of an MSSC account is 2 years. In other words, the maturity amount will be paid to the account holder 2 years after the date of opening the account.
• Deposit Amount: The minimum amount of deposit under the MSSC is Rs.1000, and the maximum deposit amount is Rs.2 lakhs.
• Partial Withdrawal: The account holder can make a partial withdrawal from the MSSC scheme after the completion of one year from the date of opening the account. However, the account holder cannot withdraw more than 40% of the account balance at a time.
• Interest Rate: This scheme provides an interest of 7.5% p.a., which is higher than what most banks and FDs provide. The interest is compounded quarterly and paid at the end of the tenure.
• Premature Closure: The MSSC scheme allows premature closure in certain cases, such as the death or marriage of the account holder, for medical reasons. However, you have to pay a penalty for the premature withdrawal amount.

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Mahila Samman Savings Scheme Calculation

The Mahila Samman Savings Certificate (MSSC) offers an attractive interest rate of 7.5% per annum, compounded quarterly. This means your investment grows not only on the initial amount but also on the accumulated interest from previous quarters. To calculate the maturity amount for your MSSC investment, you can use the following formula:

M = P * (1 + r / n) ^ n

where:

• M is the maturity amount,
• P is the principal amount,
• r is the interest rate per compounding period,
• n is the number of compounding periods.

Example: If you invest Rs. 10,000 for a period of 2 years (8 quarters), the maturity amount would be:
Maturity amount = 10000 * (1 + 0.075 / 4)^8
Maturity amount = Rs. 11,602.22 (approx.)

Note:- When calculating the maturity value, any fractional amount less than a rupee shall be rounded off to the nearest rupee. Specifically, any amount of fifty paisa or more will be considered as one rupee, while any amount less than fifty paisa shall be disregarded in the rounding-off process.

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What are the Documents Required for the Mahila Samman Savings Certificate?

In order to apply for the Mahila Samman Nidhi Scheme, you need the following documents -

• The applicant’s identity proof (passport, voter ID card, PAN card)
• The applicant’s proof of residence (water bill, electricity bill, rent agreement, etc.)
• Passport size photo
• Email address and a valid phone number.

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How to Apply Online for Mahila Samman Savings Certificate 2024

To apply for this scheme online, you must follow the below-mentioned steps -

1. Download the ‘Application for purchasing the certificate’ from the official website of the country’s post.
2. Complete the form and fill it with the necessary information
   • In the ‘To the Postmaster' section’, mention the address of the post office.
   • Write your name and select the account type as ‘Mahila Samman Savings Certificate.’
   • Provide other personal details and also the payment information.
3. Fill out the form of declaration and nomination as required.
4. Submit the completely filled form and attach the required documents along with it.
5. You can deposit the amount at a post office using either a cheque or cash, as per your preference.
6. Next, you will receive a certificate that confirms your investment in the Mahila Samman Savings Certificate.

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Banks offering Mahila Samman Saving Certificates

The government of India authorized public-sector banks and a few private-sector banks to offer Mahila Samman Saving Certificate; here is the list of banks offering MSSC as follows:

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

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Premature Closing of Mahila Samman Savings Certificate

After 6 months from the account opening date, the account holder can initiate its premature closure by agreeing to pay a 2% penalty. You can initiate an early closure of the MSSC account only if -

• You close it after 6 months without giving any reason: An interest of 5.5% will be given.
• Closure in case of the death of the account holder.
• If you are closing the account on compassionate grounds (life-threatening disease of the account holder), then it is allowed.
• If you are closing the account due to the death of the account holder’s guardian. In such a case, 7.5% interest will be paid on the principal amount.
• If you are closing the account due to some difficulty in operating the MSSC account.

The Mahila Samman Savings Certificate Scheme is not just a financial instrument; it symbolizes the government's commitment to women's economic empowerment. With its high-interest rate, flexibility, and minimal documentation requirements, it's a welcome addition to the landscape of women's financial planning.

If you are still confused and don’t know if you should go for the Mahila Samman Savings Certificate or any other small savings scheme, then the best option is to seek professional help. Consult our tax experts using our Tax Advisory Service at Tax2win, who are here to help you with your tax-related queries.

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