On July 19, 2023, Punjab National Bank (PNB) introduced the Mahila Samman Savings Certificate (MSSC) scheme for 2023, a small savings initiative aimed at encouraging women to save money. This scheme offers an attractive annual interest rate of 7.5 per cent. Please share your thoughts in comment section below.
The government recently permitted all public sector banks and qualified private banks to participate in the scheme, and PNB became the fifth bank to offer it. Previously, the scheme was exclusively available through post offices until June 27, 2023, when it was extended to include public sector and qualified private banks.
Only women are eligible to invest in the MSSC scheme, either for themselves or on behalf of a minor girl. The scheme remains open for investments until March 31, 2025.
Features of MSSC
- Who can invest in MSSC?
Only women can invest under this scheme, either for themselves or on behalf of a minor girl.
- When can I invest in MSSC?
The scheme is open till March 31, 2025.
- What is the minimum investment amount?
The minimum investment amount is Rs. 1,000.
- What is the maximum investment amount?
The maximum investment amount is Rs. 2 lakh.
- What is the interest rate on MSSC?
The interest rate on MSSC is 7.5 per cent per annum, compounded quarterly.
- What are the tax implications of MSSC?
Interest earned on MSSC is taxable as per the income tax slabs.
- What are the withdrawal rules for MSSC?
You can withdraw your entire investment from MSSC after the maturity period of two years. You can also withdraw up to 40 per cent of the eligible balance after the first year, before maturity.
Premature account closure is allowed only in special cases, such as the accountholder’s death, compassionate grounds like medical emergencies, or the guardian’s demise.
- What are the other features of MSSC?
- MSSC is a safe investment as it is backed by the government of India.
- MSSC offers a higher interest rate than many other small savings schemes.
- MSSC can be opened at any post office or bank.
The maturity period for MSSC is two years from the date of deposit. Nonetheless, account holders can withdraw up to 40 per cent of the eligible balance after the first year, before maturity, by submitting Form-3. Premature account closure is permitted only in specific cases, such as the accountholder’s demise, compassionate grounds like medical emergencies, or the guardian’s passing.
MSSC vs FD
Bank fixed deposits (FDs) and Mahila Samman Savings Certificates (MSSC) are both popular investment options for women. Here is a comparison of the two schemes:
| Feature | Bank FD | Mahila Samman Savings Certificate |
|---|---|---|
| Who can invest | Anyone | Only women, either for themselves or on behalf of a minor girl |
| Minimum investment | Varies from bank to bank | Rs. 1,000 |
| Maximum investment | Varies from bank to bank | Rs. 2 lakh |
| Interest rate | Varies from bank to bank | 7.5% per annum, compounded quarterly |
| Maturity period | Varies from bank to bank | 2 years |
| Withdrawal rules | Can be withdrawn before maturity, but may have to pay a penalty | Can withdraw up to 40% of the eligible balance after the first year, before maturity |
| Tax implications | Interest earned is taxable as per the income tax slabs | Interest earned is taxable as per the income tax slabs |
| Liquidity | More liquid than MSSC | Less liquid than bank FDs |
| Safety | Backed by the bank | Backed by the government of India |
Key differences between bank FDs and MSSC
| Feature | Bank FD | Mahila Samman Savings Certificate |
|---|---|---|
| Interest rate | Varies from bank to bank | 7.5% per annum, compounded quarterly |
| Maturity period | Varies from bank to bank | 2 years |
| Withdrawal rules | Can be withdrawn before maturity, but may have to pay a penalty | Can withdraw up to 40% of the eligible balance after the first year, before maturity |
| Liquidity | More liquid than MSSC | Less liquid than bank FDs |
| Safety | Backed by the bank | Backed by the government of India |