Friday, Dec 01, 2023

Mahila Samman Savings Certificate 2023: How Does It Compare With Special FDs For Women?

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Mahila Samman Savings Certificate 2023: How Does It Compare With Special FDs For Women?

The Mahila Samman Savings Scheme 2023 rates for women have been announced. Many banks offer special kind of fixed deposits (FDs) for women, offering them a special premium. Here’s a comparison

The government introduced the Mahila Samman Savings Certificate (MSSC), a small savings scheme intended specifically for women to encourage them to invest, in the Union Budget 2023. Investment into the scheme will fetch an interest at the rate of 7.5 per cent per annum. 

The scheme is effective from March 31, 2023. A woman or a guardian on behalf of a minor girl, can open an MSSC account at a post office or any authorised bank.

Benefits Of Holding This Account

The minimum amount to be invested is Rs 1,000, with maximum investment allowed for up to Rs. 2 lakh. The 7.5 per cent interest will be compounded quarterly and will be credited to the account. The deposit matures after two years from the deposit date.

Let’s Do The Math

If you invest the maximum amount of Rs 2 lakh for maximum tenure of two years, and if interest is compounded four times per year, the total amount accrued, i.e., the principal and the interest will come to Rs. 2,32,044.

Special Rates To Women At Banks

Several banks offer special rates on fixed deposits for women depositors.

A special 400-day fixed deposit offered by Indian Bank offers women a rate of interest of 7.15 per cent.

Punjab and Sindh Bank’s Grih Lakshmi Fixed Deposit Scheme provides 25 basis points premium to the fixed deposits where a woman is the primary account holder. The maximum investment in this scheme is Rs 15 lakh for a period of 551 days, and the effective rate of interest offered on this scheme is 6.90 per cent for women who make their FD bookings online, and 6.65 per cent if done offline.  

Though the interest is compounded on a quarterly basis similar to MSSC, the rates are lower.

Which Is Better?

Basavaraj Tonagatti, a certified financial planner (CFP) says that considering that the MSSC tenure is only two years, and the maximum investment allowed is only up to Rs. 2 lakh, it is not that significant a differentiator.

“Women are offered higher rates by a few banks than the general deposit rate and most of these banks cover up to Rs. 5 lakh. Therefore, I recommend searching for such options instead of MSSC because such FD schemes also offer higher liquidity,” he adds. 

Banks, however, deduct a marginal penalty charge if you make premature withdrawals. 

Investment in MSSC also do not offer any tax benefits. That’s why it is probably better suited for those in the lower income groups, who can take better advantage of this scheme.