In this article, we’re going to explore the MSSC scheme for women launched by the government of India with the Budget announcement in 2023. We’re going to understand what this scheme brings for women citizens of the country, how they can benefit, and which criteria make you eligible for participation.
Understanding the MSSC
The Mahila Samman Savings Certificate (MSSC) is a government-backed initiative which was launched in the 2023 Union Budget to empower the women of India by offering a fixed interest rate to investors for a two-year maturity period.
The intention of this scheme is not only to encourage women to save their income, but to also extract a government-assured interest rate if and when they choose to invest those savings.
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Key features of the MSSC
- Attractive returns: The MSSC offers a competitive interest rate of 7.5% per annum, compounded quarterly. This fixed rate provides predictable returns on the investment unlike riskier investments like mutual funds and the stock market.
- Investment limits: A minimum deposit of ₹1,000 is required, with subsequent deposits only allowed in multiples of ₹100. The maximum investment limit per account is limited to ₹2,00,000.
- Single investment opportunity: Only one deposit is permitted per account. However, while women can open several accounts under one name, the cumulative limit across all these accounts still remains ₹2 lakh. There should also be a minimum gap of three months between opening new accounts.
- Term and maturity: The MSSC has a fixed maturity period of two years. The invested amount and accrued interest are payable upon maturity.
- Partial withdrawal: The scheme allows for partial withdrawals after one year from the account opening date. These withdrawals have to be limited to 40% of the corpus amount after one year from the date of account opening.
- Premature closure of account: The account can’t be closed prematurely. However, there are some rules and policies that allow premature closure in special circumstances.
Eligibility for the Mahila Samman Savings Certificate
The MSSC is open to all Indian women, irrespective of age. Under special circumstances, however, a legal guardian, including a male guardian, can open an account on behalf of a minor girl child to encourage savings habits from a young age, or to build a considerable corpus over time for large future expenses.
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Opening an MSSC account
Here is some important information you’ll need to open your MSSC account in the country.
Documents required
- Application form provided by the bank/post office
- KYC documents like Aadhaar card and PAN card
- Proof of address (if required)
- KYC form for first-time investors
- Pay-in slip or other proof of income
Banks offering MSSC facilities
Here’s a list of banks that have partnered with the government to offer account opening services under this scheme:
- State Bank of India
- Punjab National Bank
- Bank of Baroda
- Canara Bank
- Union Bank of India
- Bank of India
- Indian Bank
- Central Bank of India
- Indian Overseas Bank
- UCO Bank
- Bank of Maharashtra
- Punjab & Sind Bank
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Frequently Asked Questions
Can I nominate someone for my MSSC account?
Yes, a nomination allows you to designate a beneficiary who will receive the maturity amount in case of your demise. Nomination facilities are available at the time of account opening or through subsequent requests at the same banks / institutions that facilitate account opening.
Can I use the MSSC account as collateral for a loan?
The terms and conditions of the MSSC scheme typically restrict its use as loan collateral. It’s best to check with your bank/post office for their specific policy regarding using MSSC for loan purposes.
Are there any tax benefits for reinvesting the maturity amount from the MSSC?
Currently, no. There are no tax benefits from reinvesting the proceeds from this account apart from those already applicable to the initial investment. The interest earned on the reinvested amount will be taxed at the applicable capital gains tax or your personal income tax slab, whichever is applicable in your case.
Can I link my MSSC account to my existing bank account?
This depends on the bank/post office offering the MSSC scheme. Some institutions might allow linking the MSSC account for easier interest credit or maturity amount transfer. A linking feature could be easier if you happen to hold a savings account at a bank which offers MSSC account opening services. However, it is best to check with your bank on this one.
What happens to the interest if I close my account prematurely?
Premature closure typically leads to a penalty on the interest earned. The exact penalty amount depends on the bank/post office policy and the duration for which the account has been active.
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