Mahila Samman Saving Certificate is a new small savings scheme for women and girls announced by the Union Finance Minister, Smt. Nirmala Sitharaman in her Budget Speech 2023-24. This scheme was announced to commemorate the Azadi ka Amrit Mahotsav.
It is a one-time scheme available for two years, from April 2023 to March 2025. It will offer a maximum deposit facility of up to Rs.2 lakh in the name of women or girls for two years at a fixed interest rate.
Features of Mahila Samman Savings Certificate:
Government-Backed Scheme: This scheme is a small savings scheme backed by the government. Hence, it does not have any credit risk.
Eligibility: The Mahila Samman Savings Certificate can be done only in the name of a girl child or woman. A woman or the guardian of a minor girl child can open a Mahila Samman Saving Certificate scheme.
Deposit Limits: The minimum deposit amount under the Mahila Samman Savings Certificate is Rs.1,000 in multiples of Rs 100. The maximum deposit amount is Rs.2 lakh in one account or all Mahila Samman Savings Certificate accounts held by an account holder.
A woman or guardian of a girl child can open a second Mahila Samman Savings Certificate account after a minimum gap of three months from the opening of the existing account.
Maturity: The maturity period of the account is two years. Thus, the maturity amount will be paid to the account holder after two years from the account opening date.
Withdrawal: A partial withdrawal facility is provided under the Mahila Samman Saving Certificate scheme. The account holder can withdraw up to 40% of the account balance after one year from the account opening date.
Tax Benefits: Tax Deducted at Source (TDS) is not deducted from the interest received under this scheme. However, CBDT notified that TDS would apply to the Mahila Samman Saving Certificate Scheme. 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).
Interest Rate: This scheme has a fixed interest rate of 7.5% p.a., much higher than most bank Fixed Deposits (FDs) and other popular small savings schemes. The interest will be credited quarterly and paid at the time of closure of the account.
Premature Closure: This account can be closed before two years in the following situations:
After six months of opening the account without giving any reason. In such a case, an interest of 5.5% will be given.
On the death of the account holder. In such a case, the interest will be paid on the principal amount.
In the case of an extreme compassionate ground, such as a life-threatening disease of the account holder, or death of the guardian upon production of relevant documents. In such a case, the interest will be paid on the principal amount.
The Department of Economic Affairs, Ministry of Finance authorized all public sector banks and qualified private sector banks to operate the Mahila Samman Savings Certificate scheme through an e-gazette announcement on 27 June 2023.
The banks that offer this scheme are Bank of Baroda, Canara Bank, Bank of India, Punjab National Bank, and Union Bank of India.
Within six months of its launch, around 18 lakh accounts have been opened under the Mahila Samman Savings Certificate Scheme.
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