Investments in Mahila Samman Savings Certificates are permitted only until March 31, 2025.
The money invested in 2-year FDs and the earnings earned on those investments are not free from taxes
Earlier, when the budget for this fiscal year was presented by Finance Minister Nirmala Sitharaman, she announced the Mahila Samman Saving Certificate (MSSC) scheme. In this scheme, which matures in two years, the government is providing interest at a rate of 7.5 per cent. A minimum of Rs 1000 and a maximum of Rs 2 lakh can be invested in this. Only until March 31, 2025, are investments in Mahila Samman Savings Certificates permitted. This can be an alternative to a fixed deposit in a bank albeit with some differences. Let us compare this scheme with a typical bank FD account and weigh the pros and cons.
The first difference is very obvious. As the name suggests, the Mahila Samman Saving Certificate is only for women. Recently, Union Minister Smriti Irani also created an account with the MSSC scheme. On the other hand, fixed deposits can be made by anyone, irrespective of gender.
In MSSC, after a year, there is an option to withdraw money before the maturity time. Up to Rs 40,000 may be withdrawn after a year. Investments made in this scheme are not exempt from income tax. The interest earned on it will be subject to tax.
The money invested in 2-year FDs and the earnings earned on those investments is not free from taxes. On two-year fixed-rate deposits (FDs) maturing with an amount under Rs 2 crore, the State Bank of India is offering a 6.80 percent interest rate to general citizens and a 7.30 percent interest rate to senior citizens. On two-year fixed-rate deposits, HDFC Bank is offering 7 percent interest to regular consumers and 7.5 percent to senior citizens. You will be required to pay the bank a fee if you withdraw the funds before the FD matures.
Both Bank FDs and Mahila Samman Savings Certificates with a 2-year term do not provide tax exemptions to investors. When it comes to interest, the average client receives lower rates on bank FDs than Mahila Samman Savings Certificates. Few banks provide older people interest rates as high as MMSC. Mahila Samman Saving Certificates are a better option for women to invest money for a two-year period .
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