Which Is Better, Mahila Samman Savings Certificates Or Bank FDs With High Interest?

Mahila Samman Savings Certificate is a one-time small savings program for women investors launched by Finance Minister Nirmala Sitharaman as part of Budget 2023. The deposit amount can be made in the name of a woman or girl child. The maximum deposit amount has been fixed at Rs 2 lakh. The Mahila Samman Savings Certificate is offered for a period of two years from March 2025. It will provide deposit facility up to Rs. 2 lakh for a period of 2 years with a fixed interest rate of 7.5% in the name of women or girls.

According to the Government of India, the Mahila Samman Savings Certificate Program now offers the option of partial withdrawal. Section 80C of the Income Tax Act allows significant tax benefits for small savings schemes. However, the taxation structure of the scheme is not clear yet. With several additional benefits, Mahila Samman Savings Certificate can be a better option than bank FDs offering higher interest rates.

State Bank of India (SBI), the country’s largest lender, offers an interest rate of 6.75%, which is much lower than many private and small financial institutions. On deposits made within two years, Kotak Mahindra Bank, ICICI Bank and HDFC Bank all offer 7% interest rate.

According to Amit Gupta, MD, SAG Infotech, the Mahila Samman Savings Certificate offers an interest rate that is at least 0.50-1% higher than the bulk of the current fixed deposit rates of reputed institutions. However, investors should assess the safety and dependability of the bank. It is to be noted that deposits in scheduled banks – which include small finance banks – are protected under the RBI’s deposit insurance scheme up to Rs 5 lakh. Mahila Samman is supported by the federal government.

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