Budget 2023: Mahila Samman Saving Certificate vs other small savings schemes

Union Budget 2023:  Union Finance Minister Nirmala Sitharaman said that the government, during her Budget 2023 speech, will launch a small savings scheme, Mahila Samman Savings Certificate, especially for women to commemorate the Azadi ka Amrit Mahotsav. The small savings scheme has a tenure of two years and will offer an interest rate of 7.5 per cent. 

“For commemorating Azadi Ka Amrit Mahotsav, a one-time new small savings scheme, Mahila Samman Savings Certificate, will be made available for a two-year period up to March 2025. This will offer a deposit facility up to Rs 2 lakh in the name of women or girls for a tenor of 2 years at a fixed interest rate of 7.5 per cent with a partial withdrawal option,” Sitharaman said.  

Mahila Samman Savings Certificate is the newest small savings scheme floated by the government. Small savings schemes are investment tools for individuals that have major tax benefits under Section 80C. The other popular schemes under this category are Public Provident Fund (PPF), Senior Citizens Small Savings Scheme (SCSS), National Savings Certificate (NSC), and Sukanya Samriddhi Yojana (SSY). 

Features of Mahila Samman Savings Certificate 

Mahila Samman Savings Certificate is a savings scheme backed by the government. The Mahila Samman Savings Certificate can be done in the name of a woman or a girl child.  

The scheme is a one-time scheme and will be for a two-year period between 2023 and 2025. 

The maximum deposit limit for the scheme is Rs 2 lakh for a period of two years at a fixed rate of 7.5 per cent, which is much higher than most bank fixed deposits. The lower limit has not been specified by the government yet. 

The scheme doesn’t have any specific tax relief, but partial withdrawal is allowed. 

Senior Citizens Small Savings Scheme (SCSS) 

In this year’s Budget, FM Nirmala Sitharaman hiked the upper deposit limit of Senior Citizens Savings Scheme from Rs 15 lakh to Rs 30 lakh. The current interest rate for the scheme is 8 per cent per annum, which is revised every quarter, i.e. January, April, July, and September, of the financial year.  

“The senior citizens saving scheme will be extended for a deposit account of Rs 30 lakh from Rs 15 lakh," announced Sitharaman while presenting the Union Budget in the parliament on Wednesday. 

SCSS is a Centre-sponsored savings tool for senior citizens, which was floated in 2004 in a bid to provide senior citizens with a steady and secure source of income post-retirement. It is a very popular and one of the most lucrative savings schemes at present. 

Public Provident Fund (PPF) 

The scheme was introduced in 1968 and is a savings and tax savings investment vehicle that enables investors to build a retirement corpus along with saving annual taxes. The present interest rate for PPF is 7.1 per cent. The scheme has a minimum tenure of 15 years, which can be extended in blocks of 5 years. 

The minimum investment amount is Rs 500, while the maximum is Rs 1.5 lakh for each financial year. Investments can be staggered monthly or one can deposit in one go. Investments above Rs 1.5 lakh will not earn interest and will not be eligible for tax savings. 

National Savings Certificate (NSC) 

The Centre-back scheme is a savings bond scheme, suitable for small to mid-income investors, with added tax relief under Section 80C. The current interest rate is 7.0 per cent, and is revised every quarter. The minimum amount for investment in National Savings Certificate is Rs 1000, and there is no maximum limit. Investors can purchase the certificates from any post office at a fixed maturity period of 5 years. 

Sukanya Samriddhi Yojana Account (SSY) 

This scheme was launched to help secure the future of a girl child. The current rate of interest of the scheme is 7.6 per cent. An SSY account can be opened at post offices or banks for a girl up to the age of 10 years. The scheme lock-in period is 18 years, which can be further extended to 21 years. The deposits can only be made till the 15th year.  

The minimum and maximum deposit that can be made in a year towards the scheme is Rs 1,000 and Rs 1.5 lakh, respectively. Sukanya Samriddhi scheme has tax benefits under Section 80C. 

There is a withdrawal clause available, wherein the investor can withdraw a maximum of 50 per cent of the whole amount for the purpose of education, provided the account holder attains the age of 18 years or has passed the tenth standard, whichever is earlier.