Launched in the Union Budget 2023-24, the Mahila Samman Saving Certificate scheme may not get an extension beyond March 2025. Announced by FM Nirmala Sitharaman to commemorate the Azadi ka Amrit Mahotsav, the scheme aims to promote savings among women by providing an attractive annual interest rate of 7.5%.
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The Mahila Samman Savings Certificate is a one-time scheme available for two years, from April 2023-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.
A government official told Moneycontrol that the scheme may be discontinued as the small savings schemes like Mahila Samman Savings Certificate, Senior Citizens’ Saving Scheme, and Sukanya Samriddhi Yojana have demonstrated robust performance in the past. However, there is a possibility that future inflows could stabilise. Therefore, the government is targeting reduced collections from the National Small Savings Fund (NSSF) in the financial year 2025 (FY25).
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In the financial year 2024, there was a shortfall of Rs 20,000 crore in the National Small Savings Fund (NSSF) collections, setting a low base for the current financial period.
The only high point was the Senior Citizens’ Savings Scheme, which saw a significant influx, providing a surplus of Rs 1.12 lakh crore last year. However, it is anticipated that this growth trend will stabilise, the official added.
The Union Budget for the financial year 2025, which was presented in July, outlined a National Small Savings Fund (NSSF) collection target of Rs 4.2 lakh crore, showing a decrease from the earlier target of Rs 4.67 lakh crore in the Interim Budget. The decline in the expected NSSF collection is attributed to the trend of households shifting their investments towards equity markets and mutual funds, motivated by the alluring returns offered by these investment avenues, as indicated in the report.
Mahila Samman Scheme: Key points
1. The scheme is designed to provide financial empowerment to women and minors through safe and lucrative investments. Any woman or guardian of a minor girl can easily open an account under this scheme.
2. The initial deposit requirement is Rs 1,000, and subsequent deposits can be made in multiples of Rs 100, not exceeding a total of Rs 2,00,000 per account. The MSSC guarantees a fixed annual interest rate of 7.5 per cent, compounded quarterly, ensuring steady growth of your investment.
3. The scheme matures two years from the date of the account opening, allowing account holders to access up to 40 per cent of the eligible balance after the first year.
4. To benefit from this opportunity, accounts must be opened at designated post offices and eligible banks before March 31, 2025.
5. The MSSC offers a fixed annual interest rate of 7.5 per cent, compounded quarterly, aiding in building a secure investment over the two-year maturity period.
6. Interest earned on this scheme is taxable under Section 194A.
7. However, TDS is not deducted unless the interest exceeds Rs 40,000 in a financial year (or Rs 50,000 for senior citizens).
8. The maturity amount is paid at the end of two years, providing account holders with their savings along with accrued interest.
