Mahila Samman Certificate: India Post launches partial withdrawal for MSSC, which closes on March 31

India Post has introduced a partial withdrawal facility for the Mahila Samman Savings Certificate (MSSC), a move aimed at enhancing financial flexibility for women account holders. The scheme, exclusively available to women and girls, permits withdrawals of up to 40% of the eligible balance after one year from the date of account opening, but before maturity.

The MSSC has been accessible to investors since April 1, 2023. For instance, an investment made on April 30, 2023, allows eligibility for partial withdrawal commencing May 1, 2024, thus providing a convenient option for accessing funds whilst retaining investment benefits. 

The Mahila Samman Savings Certificate is structured with a two-year fixed tenure, with investment amounts ranging from a minimum of Rs 1,000 to a maximum of Rs 2 lakh per individual. 

The MSSC stands out with its stable 7.5% fixed interest rate, providing a safe option for individuals looking to save quickly without facing market uncertainties. Its two-year tenure and ability for partial withdrawals offer added flexibility to investors.

Upon maturity, the full principal along with accrued interest is available to the investors. The interest earned is taxable and must be reported under 'Income from Other Sources'. It does not qualify for tax deductions under Section 80C, which is an important consideration for investors planning their financial strategies. 

Importantly, the program is available to Indian women of all ages, even those who are under 18, with the account overseen by a guardian. This inclusivity guarantees that women from diverse economic circumstances can take advantage of this savings initiative.

The calculation for the 40% partial withdrawal takes into account not just the original deposit but also the total balance, inclusive of interest. Consider the scenario where an MSSC account started with Rs 2,00,000, which grows to Rs 2,15,427 due to accrued interest over a year. The withdrawal calculation allows for 40% of this total, enabling an account holder to retrieve Rs 86,171, a higher amount than if calculated on the original deposit alone. This ensures that the withdrawal remains proportionate to the available funds, thereby offering fair access to the investment. 

The introduction of the partial withdrawal feature reflects India Post's strategy to make its savings products more competitive. The Mahila Samman Savings Certificate, which offers a fixed interest rate over its term, stands in a market with various other savings options. While the MSSC provides certain liquidity benefits, its interest rates and tax treatment differ from those of other financial products such as bank fixed deposits, which potential investors may also consider.