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Jan 31, 2024

Financial Freedom for Women: Mahila Samman Saving Certificate Eligibility and Application

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Pooja Lodariya

CA

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Are you looking for a safe and lucrative investment option that can help you achieve financial independence and security? If yes, then you might be interested in the Mahila Samman Saving Certificate, a new small savings scheme introduced by the government in the Budget 2023-24.

The Mahila Samman Saving Certificate is a one-time scheme available for two years, from April 2023 to March 2025. It aims to encourage savings and investment by the women and girls of India and to commemorate the Azadi ka Amrit Mahotsav.

In this blog post, we will tell you everything you need to know about this scheme, such as its features, benefits, eligibility, and how to apply for it. Let’s get started!

What is a Mahila Samman Saving Certificate?

The Mahila Samman Saving Certificate is a fixed-income investment programme that offers a fixed interest rate of 7.5% p.a. on the deposited amount, which is credited quarterly and paid at the time of maturity.

The scheme is backed by the government and has no credit risk. It can be opened only in the name of a woman or a girl child. A woman or the guardian of a minor girl child can open this scheme at post offices and qualified scheduled banks.

  • The minimum deposit amount is Rs.1,000 in multiples of Rs.100. The maximum deposit amount is Rs.2 lakh in one account or all accounts held by an account holder.
  • The maturity period of the scheme is two years. The maturity amount will be paid to the account holder after two years from the date of opening the account.
  • The scheme allows partial withdrawal of up to 40% of the account balance after one year from the date of opening the account.
  • The scheme does not deduct TDS from the interest received unless the interest amount exceeds Rs.40,000 or Rs.50,000 (in the case of senior citizens) in a financial year.

Why Should You Invest in Mahila Samman Saving Certificate?

The Mahila Samman Saving Certificate is a unique and beneficial scheme for women and girls, as it offers them several advantages, such as:

  • Competitive and guaranteed return: The scheme provides a competitive and guaranteed return on investment, which can help women build a secure and stable source of income. The interest rate of 7.5% p.a. is higher than most of the other small savings schemes, such as the Public Provident Fund (PPF), National Savings Certificate (NSC), and Sukanya Samriddhi Yojana (SSY).

  • Financial inclusion and empowerment: The scheme promotes financial inclusion and empowerment of women and girls, as it enables them to save money and plan for their future goals. The scheme also supports the government’s initiatives for gender equality and women’s welfare, such as Beti Bachao Beti Padhao, Pradhan Mantri Ujjwala Yojana, and Pradhan Mantri Matru Vandana Yojana.

  • Social and economic development: The scheme also contributes to the social and economic development of the country, as it supports the government’s vision of Atmanirbhar Bharat and Azadi ka Amrit Mahotsav. The scheme also helps in creating a culture of savings and investment among the citizens, which can boost the growth and prosperity of the nation.

How to Apply for a Mahila Samman Saving Certificate?

To apply for the scheme, you need to follow these steps:

  • Download the ‘Mahila Samman Saving Certificate Application’ form from the official website of the bank or post office, or get a hard copy of the form from the branch.
  • Fill in the required details such as name, address, PAN, Aadhaar, nominee, etc. and sign the form.
  • Attach the necessary documents such as identity proof, address proof, age proof, etc. and submit the form along with the deposit amount to the bank or post office.
  • Receive the passbook and certificate of the scheme after verification of the details and payment of the deposit amount.

How to Calculate the Interest and Maturity Amount of Mahila Samman Saving Certificate?

The interest and maturity amount of the Mahila Samman Saving Certificate can be calculated using the following formula:

Interest Amount = Deposit Amount x Interest Rate x Maturity Period / 100

Maturity Amount = Deposit Amount + Interest Amount

For example, if you invest Rs.1,00,000 in the Mahila Samman Saving Certificate for two years at 7.5% p.a., the interest and maturity amount will be:

Interest Amount = 1,00,000 x 7.5 x 2 / 100 = Rs.15,000

Maturity Amount = 1,00,000 + 15,000 = Rs.1,15,000

The following table shows the interest and maturity amount of the Mahila Samman Saving Certificate for different deposit amounts and interest rates:

Deposit AmountInterest RateInterest AmountMaturity Amount
Rs.1,0007.5% p.a.Rs.150Rs.1,150
Rs.10,0007.5% p.a.Rs.1500Rs.11,500
Rs.50,0007.5% p.a.Rs.7,500Rs.57,500
Rs.1,00,0007.5% p.a.Rs.15,000Rs.1,15,000
Rs.2,00,0007.5% p.a.Rs.30,000Rs.2,30,000

How to Compare Mahila Samman Saving Certificate with Other Investment Options?

The Mahila Samman Saving Certificate is not the only investment option available for women and girls. There are other options such as fixed deposits, mutual funds, and equity, which have different features, risks, and returns. To compare the Mahila Samman Saving Certificate with other investment options, you need to consider the following factors:

  • Return: The return is the amount of money you earn from your investment over some time. It is usually expressed as a percentage of the initial investment. The Mahila Samman Saving Certificate offers a fixed return of 7.5% p.a., which is higher than most of the bank fixed deposits, which offer around 5-6% p.a. However, it is lower than some of the mutual funds and equity, which can offer 10-15% p.a. or more, depending on the market performance and risk level.

  • Risk: The risk is the possibility of losing some or all of your investment due to various factors such as market fluctuations, inflation, default, etc. The Mahila Samman Saving Certificate has no credit risk, as it is backed by the government. However, it has an inflation risk, as the fixed interest rate may not keep up with the rising prices of goods and services.

Fixed deposits also have low credit risk, as they are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to Rs.5 lakh per depositor per bank. However, they also have inflation risk, as well as interest rate risk, as the interest rate may change during the tenure of the deposit.

Also Read: 3 Easy And Simple Ways On How To Download E-Pan Card Through NSDL, UTIITSL, And E-Filing Website

Mutual funds and equity have high credit risk, as they are not guaranteed by any entity. They also have high market risk, as their value may fluctuate depending on the demand and supply of the securities. However, they also have high growth potential, as they can benefit from the economic growth and capital appreciation of the securities.

  • Liquidity: Liquidity is the ease of converting your investment into cash without losing much of its value. The Mahila Samman Saving Certificate has moderate liquidity, as it allows partial withdrawal of up to 40% of the account balance after one year from the account opening date.

    However, it has a lock-in period of two years, which means you cannot withdraw the entire amount before the maturity date. Fixed deposits have low liquidity, as they have a fixed tenure and charge a penalty for premature withdrawal.

    Some banks offer flexible fixed deposits, which allow partial or premature withdrawal without any penalty. Mutual funds and equity have high liquidity, as they can be sold or redeemed at any time, depending on the availability of buyers and sellers. But, they may incur transaction costs, such as brokerage fees, exit load, etc.

The following table shows the comparison of the Mahila Samman Saving Certificate with other investment options based on these factors:

Also Read: Top Government Business Loan Schemes in India

Investment OptionReturnRiskLiquidity
Mahila Samman Saving Certificate7.5% p.a.Low credit risk, moderate inflation riskModerate, partial withdrawal allowed after one year, lock-in period of two years
Fixed Deposit5-6% p.a.Low credit risk, moderate inflation risk, low interest rate riskLow, penalty for premature withdrawal, fixed tenure
Mutual Fund10-15% p.a. or moreHigh credit risk, high market riskHigh, no lock-in period, transaction costs involved
Equity10-15% p.a. or moreHigh credit risk, high market riskHigh, no lock-in period, transaction costs involved

So What are you Thinking?

The Mahila Samman Saving Certificate is a great opportunity for women and girls to invest their money and earn a high and assured return. It also helps them to achieve financial independence and security, and to participate in the nation’s growth and progress. If you are interested in this scheme, you should hurry up and apply for it before it expires in March 2025!

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