Investments in Mahila Samman savings certificates are only permitted until March 31, 2025.
Money invested in 2-year DFs and the income generated by these investments are not exempt from tax
Earlier, when this fiscal year’s budget was presented by Finance Minister Nirmala Sitharaman, she announced the Mahila Samman Savings Certificate (MSSC) scheme. In this plan, which matures in two years, the government pays interest at a rate of 7.5%. A minimum of Rs 1000 and a maximum of Rs 2 lakh can be invested in it. Investments in Mahila Samman savings certificates are only permitted until March 31, 2025. It can be an alternative to a fixed deposit in a bank, but with some differences. Let’s compare this scheme with a typical FD bank account and weigh the pros and cons.
The first difference is very obvious. As its name suggests, the Mahila Samman savings certificate is reserved for women. Recently, Union Minister Smriti Irani also created an account with the MSSC program. On the other hand, fixed deposits can be made by anyone, regardless of gender.
In MSSC, after one year it is possible to withdraw money before maturity. Up to Rs 40,000 can be withdrawn after one year. Investments made in this scheme are not exempt from income tax. The interest generated by it will be taxable.
The money invested in the 2-year DFs and the income generated by these investments are not exempt from tax. On two-year fixed rate (FD) deposits maturing with an amount of less than Rs 2 crore, the State Bank of India offers an interest rate of 6.80% to ordinary citizens and an interest rate of 7.30% for the elderly. On two-year fixed rate deposits, HDFC Bank offers 7% interest to regular consumers and 7.5% to seniors. You will have to pay a fee to the bank if you withdraw the funds before the FD matures.
Bank FDs and Mahila Samman Savings Certificates with a term of 2 years do not offer tax exemptions to investors. As for interest, the average customer receives lower rates on bank FDs than Mahila Samman savings certificates. Few banks offer seniors interest rates as high as MMSC. Mahila Samman savings certificates are a better option for women to invest money for a period of two years.
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