Encouraging saving and investment among women is crucial for the country’s economic empowerment The Indian government has undertaken multiple initiatives to advance the financial empowerment of women. One such initiative is the Mahila Samman Savings Certificate scheme. This offers a deposit facility of up to INR 2 lakh in the name of women or girls. The scheme provides a fixed interest rate of 7.5 per cent for a tenure of 2 years with a partial withdrawal option.
- Mahila Samman Saving Scheme
- Features of Mahila Samman Savings Certificate
- Premature closure of account
- Tax Benefits
- How to Open a Mahila Samman Savings Scheme Account
- Documents Required to Open Mahila Samman Saving Certificate Account
- Banks Offering Mahila Samman Savings Certificate
- Mahila Samman Savings Certificate Calculation
- FAQ’s
Mahila Samman Saving Scheme
Mahila Samman Saving Scheme is a small risk-free saving scheme backed by the government of India for women and girls. The Mahila Samman Saving scheme is available from 1 April 2023 for 2 years. An individual can open an account on or before 31 March 2025. The scheme has a fixed interest rate of 7.5 per cent per annum compounded quarterly. Therefore, bringing the effective interest rate to approximately 7.7 per cent. The scheme will credit the interest quarterly and will pay it at the time of the account closure.
Features of Mahila Samman Savings Certificate
Below are the features of the Mahila Samman Savings Certificate, 2023:
| Features | Particulars |
| Eligibility Criteria | An application to open the account can be made by: 1) by a woman for herself; or 2) by the guardian(male/female) on behalf of a minor girl. An account opened under this Scheme shall be a single-holder type account. |
| Limit of Deposit | 1) An individual can open any number of accounts under the scheme. 2) Individuals can deposit a minimum of INR 1,000 and any sum in multiples of INR 100. 3) An individual can deposit a maximum total of INR 2 lakh cumulatively in all the accounts. 4) An individual however must maintain a minimum time gap of 3 months between opening an existing account and opening another account. |
| Interest | 1) The deposits will yield an interest rate of 7.5 per cent per annum, compounded quarterly. Thereby producing an effective interest rate of approximately 7.7 per cent. 2) The scheme will credit the interest quarterly and will pay it at the time of the account maturity. |
| Maturity | 1) The maturity period of this savings scheme is 2 years from the date of account opening. 2) The account holder will receive the eligible amount upon maturity after submitting Form-2. |
| Withdrawal from account | 1) The maturity period of this savings scheme is 2 years from the date of account opening. 2) The account holder will receive the eligible amount upon maturity after submitting Form 2. |
Premature closure of account
An individual cannot close the account before maturity except in the following cases:
- On the death of the account holder. In this case, interest will be calculated on the principal amount,
- In exceptional compassionate cases, such as:
1) the death of the Guardian upon submission of relevant documents, or
2) in the event of a life-threatening disease of the account holder. - After six months of opening the account without giving any reason. However, in a such case, interest will be 5.5 per cent only.
Tax Benefits
The CBDT notified that TDS will apply to the Mahila Samman Savings Certificate Scheme. However, As per Section 194A of the Income Tax Act, TDS will apply only when the interest received from the post office savings scheme in a financial year is more than Rs.40,000 or Rs.50,000 (in the case of senior citizens). The interest amount of this scheme for a maximum investment of INR 2 lakh is INR 32,044. Therefore, under this scheme, TDS is not deductible.
How to Open a Mahila Samman Savings Scheme Account
An individual can open a Mahila Samman Savings Certificate scheme at post offices and qualified scheduled banks.
Process to Open Mahila Samman Savings Certificate at Banks
- Download the Application
Download the ‘Mahila Samman Saving Certificate Application’ from the qualified bank’s official website, or else visit the bank and ask for a hard copy of the form.
- Fill out the application with accurate information.
Fill out the declaration and nomination details.
- Submit the application form
Submit the application form, the deposit amount and the required documents to the bank’s executive by visiting the branch office.
- Receive the Certificate
Upon successful submission, you will receive the certificate that verifies your investment in the scheme.
Process to Open Mahila Samman Savings Certificate at Post Office
- Download the ‘Application for Purchasing the Certificate’ from the Indian Post’s official website. Alternatively, you can visit the nearest Post Office branch and request the form.
- Fill in the required details in the form with the post office address, account type, payment, personal details, declaration and nomination details, etc.
- Submit the application form with the required documents.
- Make the required deposit in the post office, either in cash or cheque.
- After the process completion, you will receive a certificate acknowledging your investment in the scheme.
Documents Required to Open Mahila Samman Saving Certificate Account
- Duly-filled Application Form
- KYC form for new account holders
- Aadhaar Card, Voter ID, Driving License and PAN card (any KYC document)
- Pay-in-Slip with the deposit amount/cheque
Banks Offering Mahila Samman Savings Certificate
The scheme was first introduced through the Post Office. To increase the reach and accessibility of the Mahila Samman Savings Scheme, On June 27th, 2023 the Ministry of Finance and Department of Economic Affairs announced through an e-gazette that all public sector banks and qualified private sector banks are authorized to operate this scheme. The list of qualified banks offering this scheme is as follows:
- Canara Bank
- Punjab National Bank
- Union Bank of India
- Central Bank of India
- Bank of Baroda
- Bank of India
Mahila Samman Savings Certificate Calculation
If you invest INR 2 lakh in the scheme, the scheme will provide an interest of ₹3,750 for the first quarter. Subsequently, the interest will compound quarterly, with each quarter’s interest calculated on the total amount (principal and interest accrued from the previous quarters). This process will continue for all 8 quarters, and upon maturity, you will receive a total of ₹2,32,044. This implies an interest of ₹32,044 on your invested amount.
FAQ’s
No, there is no tax benefit for investments made in Mahila Samman Saving Certificate. Any deduction under Section 80C is also not eligible under MSSC.
You can obtain the Mahila Samman Saving Patra from the Post office or Bank Branch office where you have opened your account.
The tenure for this scheme is 2 years spanning from April 2023 to March 2025.
Yes, partial withdrawal is allowed under this scheme. You can withdraw 40% of the amount invested after one year from the account opening date.