The government has launched two savings schemes aimed at benefiting women and girls: the Sukanya Samriddhi Yojana (SSY) and the Mahila Samman Savings Certificate.
Both schemes cater to the financial needs of women, but they have different features, objectives, and benefits. Let’s compare both in detail.
Sukanya Samriddhi Yojana (SSY)
Launched in January 2015, the Sukanya Samriddhi Yojana is a long-term savings scheme for the financial security of a girl child. Here are the key details:
Eligibility: An account can be opened for a girl child up to the age of 10 years. The maximum number of accounts allowed is two per family, but three accounts can be opened in the case of twin girls. Only Indian residents can participate in the scheme.
Account Opening: SSY accounts can be opened in banks or post offices with a minimum deposit of Rs 250. The maximum annual contribution is Rs 1.5 lakh.
Interest Rate: The current interest rate is 8.2% per annum.
Investment Duration: You can invest in the scheme for up to 15 years. The account matures when the girl turns 21, but it can be closed prematurely if the girl gets married at 18.
Withdrawals: After 18 years, partial withdrawals are allowed up to 50% of the balance as of the previous financial year.
Tax Benefits: You can claim tax deductions up to Rs 1.5 lakh under Section 80C of the Income Tax Act. The interest earned and maturity amount are tax-free.
Key Benefits:
Long-term savings for a girl child
Attractive interest rate
Tax-free returns
Flexible contribution options
Partial withdrawal facility at age 18
Mahila Samman Savings Certificate
Introduced in April 2023, the Mahila Samman Savings Certificate is a short-term savings option for women, available only until March 31, 2025. Here’s how it compares:
Eligibility: Any woman can open an account for herself or in the name of a minor girl. It is available at post offices across India.
Account Opening: The minimum investment is Rs 1000, and the maximum is Rs 2 lakh. If you have multiple accounts, the combined total across all accounts cannot exceed Rs 2 lakh.
Interest Rate: The interest rate is 7.5% per annum.
Investment Duration: The scheme has a maturity period of 2 years.
Withdrawals: Partial withdrawals of up to 40% are allowed after one year from account opening.
Premature Closure: The account can be closed prematurely in case of the account holder’s death, life-threatening illness, or death of the guardian.
It can also be closed after 6 months without a specific reason, but the interest rate will be reduced by 2% for premature closure.
Key Benefits:
Short-term, flexible investment option
Partial withdrawal facility after one year
Premature closure option with certain conditions
Relatively higher interest rate than standard savings accounts
Which is Better?
Long-Term vs Short-Term: SSY is a long-term investment (15 years), making it ideal for securing the future of a girl child.
On the other hand, the Mahila Samman Savings Certificate is a short-term investment (2 years), suitable for those seeking quick returns.
Interest Rate: SSY offers a higher interest rate (8.2%) compared to the Mahila Samman Savings Certificate (7.5%).
However, the SSY is more suitable for long-term goals, while the Mahila Samman Savings Certificate provides a quick return in just two years.
Flexibility: The SSY allows partial withdrawals from the 18th year and is more suited for long-term saving.
The Mahila Samman Savings Certificate allows partial withdrawals after a year, providing more flexibility in the short term.
Tax Benefits: SSY offers tax deductions under Section 80C and tax-free returns, making it a better option for those looking to save on taxes.
Premature Closure: The Mahila Samman Savings Certificate allows for premature closure, which may appeal to those who need more flexibility.
Conclusion
The Sukanya Samriddhi Yojana is a better choice if you’re looking for a long-term, tax-free investment with higher returns for a girl child’s future.
However, if you prefer a short-term savings option with partial withdrawal options, the Mahila Samman Savings Certificate is more suited for your needs. Both schemes have unique benefits based on your investment goals.
