Budget 2023 announced a new fixed-income scheme exclusively for women. Called the Mahila Samman Savings Certificate (MSSC), the new investment avenue is part of a small savings scheme. Notably, there’s another scheme run by the government which is specifically designed for girls. That is known as Sukanya Samriddhi Yojana (SSY). So, how do the two schemes compare and which is better? Let's have a look here:
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Eligibility
A legal guardian/natural guardian can open Sukanya Samriddhi Account (SSA) in the name of a girl child who should not be more than 10 years of age. On the other hand, MSSC is available for women. There is no bar on age.
Interest rate
Interest rates applicable to SSA are reviewed every quarter. Currently, it is available at an interest rate of 7.6 percent.
Meanwhile, MSSC promises to yield 7.5 percent per annum.
Tenure
Sukanya Samriddhi Yojana is a long-term scheme that allows investment in small amounts regularly over a 15-year period.
Mahila Samman Saving Certificate is a short-term scheme with a tenure of 2 years. Also, this scheme will be available from April 1, 2023,
Investment limits
The Mahila Samman Savings Certificate allows a maximum deposit of Rs 2 lakh.
On the other hand, customers are allowed to set up a Sukanya Samriddhi account at a minimum investment of Rs 250 and a maximum of Rs 1,50,000 a financial year. The subsequent deposits in the account can be made in multiples of Rs 50. However, there is no limit on the number of deposits either in a month or in a financial year.
Associated risks
Both the small savings schemes are backed by the government. Hence, they do not have any credit risk.
Premature withdrawal
Mahila Samman Saving Certificate allows premature withdrawal. However, more details on the same are still awaited.
In the case of SSY, partial withdrawal of a maximum of up to 50 percent of the balance standing at the end of the preceding financial year can be done after the account holders attain the age of 18 years.
Tax benefit
The tax benefit of MSSC is yet not specified.
While the amount invested in the Sukanya Samriddhi Yojana account can be deducted from taxable income up to Rs 1.5 lakh per year under section 80C of the Income-tax Act. Interest earned, and the amount on maturity are also tax-free.
Which is better?
Choosing between the two schemes depends on individual preferences and goals, experts say.
Mahila Samman Saving Certificate is a better option for those who are looking for a short-term investment avenue, whereas Sukanya Samriddhi Yojana is more suitable for long-term investments. The latter scheme is also more targeted, as it is available only for girl children up to 10 years of age.
First Published: Mar 8, 2023 8:40 AM IST
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