For whom is Mahila Samman plan beneficial?

Finance Minister Nirmala Sitharaman had announced a special savings scheme in the Budget for the financial year 2023-24 called ‘’Mahila Samman Savings Certificate’’ scheme. If you don’t know about this scheme, then read on to know the  features and benefits, how much return does it generate and how much should you invest.

’Mahila Samman Savings Certificate is a government small savings scheme, especially for women. The main reason for bringing it is to increase women’s participation in investment and financial management. Under the scheme, an account can be opened from April 1, 2023 to March 31, 2025. This scheme is open only for two years. Currently, this scheme is available at 1.59 lakh post offices around the country

To open an account in the Mahila Samman Savings Certificate scheme, you will have to fill Form-1. A minimum of 1000 rupees and a maximum of 2 lakh rupees can be deposited. Whether it is through one account or with the help of more than one account the limit remains same per person.

Guardians i.e. parents can open an account in the name of minor girls. It has a maturity period of 2 years. For example, if you invest on July 1, 2023, then after two years i.e. on July 1, 2025, you will get the money back with interest.

The popularity of the Mahila Samman Savings Certificate scheme can be gauged by the speed at which accounts are being opened. According to a report, from April 1, 2023 to the end of May i.e. in just two months, 5 lakh women have invested in it. This has brought 3,666 crore rupees to the government treasury. This means that more than 73 thousand rupees have been deposited on average in one account. By the end of June, banks are also  expected to allow women to open such accounts. Due to which there is a possibility of rapid increase in collection in time to come.

Let’s understand the maths behind return on investment in Mahila Samman Scheme. There is a fixed return of 7.5% per annum on investing in this scheme. Interest is payable on a quarterly basis.

For example, if you invest one lakh rupees now, then after two years you will get Rs 1,16 lakh at 7.5% interest. Similarly, on investing one and a half lakh rupees, you will get Rs 1.74 lakh on maturity.  On investing 2 lakh rupees, they will get Rs 2.32 lakh. Form-2 will have to be filled for withdrawal of amount on maturity.

Partial withdrawal is allowed after one year of opening the account. However, only 40% of the total amount deposited in the account can be withdrawn.

If the account holder die or if she is diagnosed with a life-threatening disease, then the account can also be closed. For this, necessary documents will have to be submitted.

The account can also be closed without any reason after 6 months. But in such a case, the interest rate will be reduced to 5.5%.

Usually most small savings schemes come with tax benefits. No such relief has been given in Mahila Samman Savings Certificate. However, exemption has been given for TDS deduction. The earnings from interest will be added to your total income. And tax will be levied according to the tax slab you fall under.

Women who want to invest for fixed returns  without any risk should opt for the scheme.  To open an account in this scheme, Form-1, and KYC forms will have to be filled. Copies of  Aadhaar card, PAN card, address proof will also have to be submitted.