Explainer: Small Savings Schemes For Women

Government-backed investment schemes are still popular among Indian investors despite the proliferation of a variety of investment instruments over the past few decades. Currently, there are nine government-backed savings schemes with a combined corpus of over Rs 2,80,274 crore, as on January 2020.  This is up from Rs 108 crore in 1948-49.

Out of these nine schemes, two have been designed keeping women’s financial  empowerment in mind. The government launched the Sukanya Samriddhi Yojana (SSY) in 2014, which enables parents to save for their girl children’s education and other expenses. The second scheme, Mahila Samman Savings Certificate, was announced in the latest Union Budget 2023 to ensure women’s welfare. Let’s look at what these schemes offer to investors.

Sukanya Samriddhi Yojana

• Parents or legal guardians can open an account in the name of the girl child under this scheme in post offices and authorised banks before she attains the age of 10 years.
• Every account holder shall have a single account under this scheme. One family can have a maximum of two SSY accounts for two girl children.
• The minimum amount you need to invest is Rs 250 and the maximum Rs 1.5 lakh (in multiples of Rs 50), in a financial year.
• Government decides the interest rate and revises it from time to time. Currently, the interest rate is 7.6 per cent per annum.
• If you deposit more than Rs 1.5 lakh in a financial year due to an accounting error, no interest will be accumulated on the excess amount and the money will be returned immediately.
• Deposits can be made in the account for 15 years from the date of opening of the account.
• The account, however, matures after 21 years, and earns interest during the entire period.
• Premature account closure is permitted before 21 years if the account holder makes such a request due to her intended marriage.
• Premature withdrawal up to a maximum of 50 per cent of the total amount in the account is allowed for education of the account holder.
• However, to be eligible for such withdrawals, she should be of 18 years of age or have passed Class X.
• Investments made in the Sukanya Samriddhi Yojana account are eligible for a deduction from taxable income of up to Rs 1.5 lakh each year under Section 80C of the Income-tax Act.

Mahila Samman Savings Certificate

• Finance Minister Nirmala Sitharaman introduced the Mahila Samman Savings Certificate for women and girls in the Union Budget 2023.
• The one-time new small saving scheme will offer an interest rate of 7.5 per cent.
• The maximum deposit allowed under the scheme is Rs 2 lakh.
• Mahila Samman Savings Cerificate will offer a partial withdrawal option.
• The scheme shall be available for years up to March 2025.
• The fine print of the scheme is awaited.