Mahila Samman Saving Scheme Vs Public Provident Fund
There are a lot of post office saving schemes offered by post office in India to the people having variety of investment needs. This set of financial instruments encourages saving and provide financial security to the people of India.
As these Post Office schemes are backed by the government, they are safe and reliable investment avenues for the individuals. Post offices in India offer their services to the people through a vast network of over 1.55 lakh post offices and around 5.70 lakh employees.
MSSC: MSSC is an abbreviation of 'Mahila Samman Saving Scheme'. MSSC is a one-time investment scheme for small savings launched by the Ministry of Finance for a two-year period up to March 2025 to encourage women to invest. Indian women and girls of all age groups can invest in this scheme. There are minimum and maximum limit to deposit the amount under the scheme is set by the government. A minimum of Rs.1000 and a maximum of Rs.2 lakhs can be deposited by the account holder in any one account or all account held by her with a maturity period of 2 years. It does not offer any tax benefit. Premature closure is allowed
If you are looking for an investment for a period of two years only with safety of returns, Mahila Samman Savings Certificate can be worth it. If you invest Rs.2 lakh, your maturity value after two years will be Rs.2,32,044 assuming quarterly compounding of interest which means you will receive and interest of Rs.32,044 on the invested amount.
PPF: PPF is an abbreviation of 'Public Provident Fund'. It is a scheme of the Central Government of India offered for investment which not only generates guaranteed returns but also gives tax rebate under section 80C of Income Tax. Interest earned in the PPF account can be redeemed only after maturity. Loan facility in PPF is available. PPF account can't be closed before maturity except on the occasion of death of the account holder. The balance in a PPF account cannot be attached under a court decree. For those subscribers who are interested to deposit lump sum amount, the ideal way to maximize the interest earning would be to invest Rs. 1.5 lakh (the maximum investible amount in a financial year) at one go on/before 5th of April every year.
One should invest between 1st and 5th of every month in order to earn maximum interest from his PPF account. The interest in PPF account is calculated every month and it is calculated on lowest balance in the account between 5th and last day of the month so if you deposit on/before the 5th of a month, you will earn interest for that month also.
Two important post office saving schemes offered by post office in India are Mahila Samman Saving Scheme (MSSC) and Public Provident Fund (PPF). Both offer investment benefits but they differ in objective of investment. Let us check out major differences between Post Office MSSC and Post Office PPF in order to make proper investment decision.
| Basis for Difference | Mahila Samman Saving Scheme (MSSC) | Public Provident Fund (PPF) |
|---|---|---|
| Purpose | MSSC is a government supported savings scheme which is designed exclusively for women | PPF is a long-term investment scheme which offers high and guaranteed returns |
| Interest Rate (p.a.) | 7.50% p.a. compounded quarterly | 7.10% p.a. compounded annually |
| Minimum Investment | Rs.1000, in multiples of 100 thereafter | Rs.500 in one financial year |
| Maximum Investment | Rs. 2 lakhs | Rs.1.50 lakhs in one financial year |
| Eligibility | Women and girl children | Any Indian individual including minor |
| Who Should Invest | Females who want to earn more interest with safety | Persons who want to get tax rebate with safety and ready to invest for 15 years |
| Tenure | 2 Years | 15 Years |
| Tax on Interest Earned | Taxable as per tax slab | Tax free |
| Tax Implication | Does not qualify for the 80C deductions. However, no TDS will be made from the MSSC maturity proceeds | Qualifies for deduction under section 80C of Income Tax Act |
| Transferability | You cannot transfer a MSSC certificate to another person | A PPF account is not transferable to another person |
| Premature Withdrawal | Allows 40% withdrawal after 1 year | Allows partial withdrawal after 7 years |
| Others |
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Main Points of MSSC: MSSC is launched by the government with an aim to empower women financially and to increase their participation in saving funds for their future. Apart from post offices, all public sector banks together with ICICI Bank, Axis Bank, HDFC Bank Ltd and IDBI Bank have been authorised to operate the Mahila Samman Savings Certificate, 2023.
Key characteristics of PPF: PPF is an excellent investment option for people uncomfortable with taking risks as it offers guaranteed and risk-free returns. Investments under PPF can be either made in a lump sum or in a maximum of 12 instalments per financial year. Investment over Rs.1.50 lakhs in one financial year will not be given any interest. Opening of PPF account in joint names is not allowed. Partial withdrawal in PPF amount is allowed from the seventh financial year onwards.
Post Office Investment Options
| Serial Number | Investment Option | Rate of Interest (p.a.) |
|---|---|---|
| 1 | Post Office Savings Account | 4% payable annually |
| 2 | Post Office Recurring Deposit | 6.70% per annum compounded quarterly |
| 3 | Post Office Monthly Income Scheme (MIS) | 7.4% per annum payable monthly |
| 4 | Post Office Time Deposit (POTD) | 1yr:6.9%, 2yr:7.0%, 3yr:7.1% & 5yr:7.5% |
| 5 | Kisan Vikas Patra (KVP) | 7.5% compounded annually |
| 6 | Public Provident Fund (PPF) | 7.10% compounded annually |
| 7 | Sukanya Samriddhi Yojana (SSY) | 8.2% compounded annually |
| 8 | National Savings Certificate (NSC) | 7.70% compounded annually |
| 9 | Senior Citizen Savings Scheme (SCSS) | 8.20% payable quarterly |
| 10 | Mahila Samman Savings Certificate (MSSC) | 7.50% compounded quarterly |