FD vs Mahila Samman Savings Certificate Which One Is The Best Option?

Mahila Samman Savings Certificate

Mahila Samman Savings Certificate

Are you looking to invest your hard-earned money wisely and securely? In the world of financial planning, we often encounter choices between various investment options. And today, we’ll explore a comparison between two popular choices: (Fixed Deposits) FD vs  Mahila Samman Savings Certificates. These two financial instruments offer distinct advantages and cater to different financial goals.

In this blog, we’ll briefly introduce both options and set the stage for a closer examination of the features, benefits, and considerations that can help you make an informed decision.

So, let’s dive into the world of FD vs Mahila Samman Savings Certificate to understand which one might be the right fit for you.

Mahila Samman Savings Certificate: Introduction

In the year 2023, Finance Minister Nirmala Sitharaman launched a one time scheme for women and girl child, Mahila Samman Savings Certificate. They launched the scheme in the honour of Azadi ka Amrit Mahotsav (completion of 75 years of independence of India).

This has triggered the FD vs Mahila Samman Savings Certificate debate, asking which one is better.

The Mahila Samman Savings Certificate is a unique financial tool specially crafted to empower and support women in India on their path to financial independence and security. You can also calculate the maturity amount using Mahila Samman Saving Scheme Calculator by entering the amount you want to invest.
Here’s a breakdown of what you need to know about this distinctive savings certificate:

Key Features of Mahila Samman Savings Certificate:

Mahila Samman Savings Certificate is a dependable and empowering financial instrument exclusively designed for women. It offers security, simplicity, and the potential for growth, making it an excellent choice for women looking to secure their financial future.

  • Whether you’re a working professional, a homemaker, or a student, this can add up as a valuable addition to your financial portfolio.
  • It is a government-guaranteed scheme that offers a fixed interest rate of 7.5% per annum.
  • The scheme is available for women or girls in the name of a guardian.
  • Minimum investment is ₹1000 and the maximum limit can go up to ₹2,00,000.

You will get compound interest rates on the deposit quarterly. The scheme pays the total sum only at the maturity.  Hence,we can say that a Mahila Samman savings certificate is like a cumulative fixed deposit or post office time deposit.

Benefits:

  • With this scheme, you can withdraw 40% of the balance, after completion of a year.
  • You can close the account prematurely with no penalty, in the case of death or life-threatening disease of the guardian.
  • You can even close the account after 6 months, for no reason, but with a penality.
  • In case of premature withdrawal, your interest rate will go down by 2%. So, you would get an interest rate of 5.5%.
  • Income tax: Interest earned on this scheme will be taxable as per the income tax slab account holder comes under. The scheme doesn’t deduct TDS if the interest earned is less than ₹40,000.

Comparison FD vs Mahila Samman Savings Certificate

Comparison: FD vs Mahila Samman Savings Certificate

MSSC offers a higher interest rate than FDs, but it is not liquid before 2 years. FDs are more liquid and may offer  lower interest rates.
The best option for you will depend on your individual circumstances and needs.

Feature Fixed Deposit Mahila Samman Savings Certificate
Interest Varies depending on the tenure, 6.5% to 7%(approx) 7.5%
Maturity Period Varies depending on the tenure, typically 1 to 5 years 2 years
Minimum Deposit Varies depending on the bank. Rs.1000 (approx) Rs. 1000
Maximum Deposit Varies depending on the bank, up to Rs.10 lakhs 2 Lakhs
Tax Benefits Interest earned is taxable Interest earned is tax free up to Rs. 40,000
Eligibility Open to all Girl Child & Women

Quick Tip:

Depending on how long you are willing to invest your money? You can choose which is a better investment option for you.

If you need access to your money in the near future, then an FD may be a better option. If you can afford to lock in your money for a longer period, then MSSC may be a better option. 

Interest Rates Offered By Top Indian Banks

The interest rates offered by banks for FDs vary depending on the tenure of the deposit, the amount deposited, and the age of the depositor.

Bank Interest Rate(for 5 years) Interest Rate(for 1 year)
State Bank of India 6.75%  5.50%
ICICI Bank 7.00% 6.00%
HDFC Bank 6.75% 5.75%
Axis Bank 7.00% 6.00%
Kotak Mahindra Bank 7.25% 6.25%
Bank of Baroda 6.50% 5.50%
Canara Bank 6.75% 5.75%
Punjab National Bank 6.50% 5.50%
Union Bank of India 6.50% 5.50%
Indian Bank 6.25% 5.25%

Note- The interest rates mentioned are subject to change. Do visit the website for more information.

FDs are a popular investment option because they offer a safe and secure way to grow your money. However, it is important to remember that the interest rates offered by FDs are not always the highest.

Post Office FD Interest Rates

Post Office FDs are a safe investment option, as the government of India backs them. They are also liquid, meaning that you can withdraw your money ‌without any penalty.

Here is an example of how much interest you would earn on a Rs. 1 lakh post office FD scheme:

Tenure General Public Senior Citizens
1 year 6.90% 7.40%
2 years 6.90% 7.40%
3 years 7.00% 7.50%
4 years 7.50% 8.00%
5 years 7.50% 8.00%

Disclaimer: The government of India fixes the interest rates on Post Office FDs. Every quarter, the government of India reviews the interest rates on Post Office FDs and can make changes.
If you are looking for a safe and liquid investment option with a decent interest rate, then Post Office FDs are a good option to consider.

Post Office FD Interest Rates

Who Should Invest In Mahila Samman Savings Certificate?

This scheme is only for women and girl child. It could be a good option for women looking to invest 2 lakh rupees for a shorter span of time.

  • If you are thinking of investing a vast sum of money for alonger period,then a bank FD is good fit.
  • You can only withdraw money after 6 months, with a 2% penalty. For an investment, it would require good planning.
  • Current rates offered by the Mahila Samman Saving scheme are higher than the most deposit rates. It is a good option for women seeking safe and shorter lock-in periods.

Both bank FDs and post office FDs are safe and secure investment options that offer tax benefits. However, the Mahila Samman Savings Certificate (MSSC) offers a higher interest rate than bank FDs and post office FDs. But MSSC has a lock-in period of 2 years, while we can withdraw bank FDs and post office FDs at any time.

The best investment option for you will depend on your individual circumstances and needs. If you are looking for a safe investment option with a higher interest rate, then the MSSC may be a good choice. However, if you need access to your money soon, then a bank FD or a post office FD may be a better option.

Like what you read? Let us knowwhat you think about our blog in the comments below.

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FAQs

Q. What is a Mahila Samman Savings Certificate?
A.
It is a small savings scheme launched by the Government of India in the Union Budget 2023-24. It is a one-time scheme available for two years.

Q. What is the key difference between FD and Mahila Samman Savings Certificate?
A.
FDs are more liquid than MSSCs, as you can withdraw your money from an FD at any time, while you can only withdraw your money from an MSSC after 2 years.

Q. Which is better FD vs Mahila Samman Savings Certificate ?
A.
The best investment option for you will depend on your individual circumstances and needs.

Q. Are Mahila Samman Savings Certificates risk-free?
A.
The Mahila Samman Savings Certificate (MSSC) is a government-backed investment, which means that it is considered to be a safe investment.

Q. Can I withdraw money before the maturity period in the Mahila Samman Savings Certificate?
A.
Yes, you can withdraw money from the Mahila Samman Savings Certificate (MSSC) before the maturity period. However, you will have to pay a penalty. The penalty is 2% of the amount withdrawn.