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The Mahila Samman Savings Certificate (MSSC) was introduced in the Union Budget 2023-24 as a dedicated savings scheme for women. It’s backed by the Government of India, available at post offices and offers 7.5% per annum for a fixed 2-year tenure.
Bank FDs have been around forever. They’re flexible on tenure, available anywhere and rates vary widely depending on which bank you pick and when you invest.
If you’re trying to decide between the two, the comparison isn’t as straightforward as it looks. Here’s what you actually need to know.
MSSC vs Bank FDs: Feature-by-Feature Breakdown
MSSC and bank FDs are both safe, fixed-return instruments, but they work very differently in terms of who can invest, how long the money stays locked, and what flexibility exists mid-tenure. MSSC offers a government-guaranteed 7.5% on a 2-year tenure with a Rs. 2 lakh cap, while FDs offer more flexibility on tenure and deposit size but no sovereign guarantee beyond DICGC cover. The comparison below covers all the key parameters side by side.
| PARAMETER | MAHILA SAMMAN SAVINGS CERTIFICATE | BANK FIXED DEPOSIT |
| Who can invest? | Women and girls only (guardian for minor girls) | Anyone |
| Interest rate | 7.5% p.a. (fixed by government) | 6.5% to 9.0%, depending on the bank and tenure |
| Tenure | 2 years only | 7 days to 10 years |
| Minimum deposit | Rs. 1,000 | Rs. 1,000 (varies by bank) |
| Maximum deposit | Rs. 2 lakh per account | No upper limit |
| Partial withdrawal | Yes, up to 40% after 1 year | Not usually, full FD must be broken |
| Premature closure | Allowed after 6 months in specific cases | Allowed with 0.5% to 1% penalty |
| Interest payout | Quarterly, paid at maturity | Monthly, quarterly, or cumulative |
| Section 80C benefit | No | Yes, on 5-year tax-saving FDs |
| Backed by | Government of India | RBI-regulated banks, DICGC covers up to Rs. 5 lakh |
| TDS | Yes, if annual interest exceeds Rs. 40,000 | Yes, if annual interest exceeds Rs. 40,000 |
What Makes MSSC Worth Considering
The 7.5% Rate Is Government-Guaranteed
Most public sector and private banks are currently offering 2-year FD rates between 6.8% and 7.5%. MSSC matches or beats the top of that range.
The difference: MSSC’s rate is fixed by the government and doesn’t change during your tenure. A bank can revise FD rates anytime for new bookings.
Partial Withdrawal Without Penalty
After completing one year, you can withdraw up to 40% of your MSSC balance without closing the account. The remaining amount continues earning 7.5%.
With most bank FDs, partial withdrawal isn’t an option. You either hold the full FD or break it entirely and lose a portion of the interest you’ve earned. For investors who want some flexibility without fully losing their position, MSSC has a practical edge here.
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No DICGC Cap Anxiety
Bank deposits are insured up to Rs. 5 lakh per depositor per bank under DICGC. If you’re investing more than that in a single bank, there’s a small but real question about what happens above that limit. MSSC doesn’t have this problem. It’s a government scheme.
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Where Bank FDs Have the Advantage
The Rs. 2 Lakh Cap Is a Real Constraint
MSSC allows a maximum of Rs. 2 lakh per account. You can open multiple accounts, but the limit applies per account. For larger investable amounts, bank FDs have no such restriction.
Tenure Flexibility
MSSC locks you in for exactly 2 years. If you need money in 6 months or want to lock in for 5 years, MSSC doesn’t work. Bank FDs give you tenures from 7 days to 10 years.
Small Finance Banks Can Offer More
Several small finance banks are currently offering 2-year FD rates between 8.0% and 9.0%. That’s above MSSC’s 7.5%. The trade-off is that these banks carry a different risk profile than a government scheme. DICGC insurance applies up to Rs. 5 lakh, which covers most retail deposit amounts.
Tax Saving
If a Section 80C deduction matters to you, a 5-year tax-saving FD lets you claim up to Rs. 1.5 lakh per year. MSSC offers no such deduction.
Interest Earned: A Quick Calculation
Investing Rs. 2 lakh for 2 years across different options:
| Option | Rate | Approx. Interest (2 years) | Maturity Amount |
| MSSC | 7.5% p.a. | Rs. 32,044 | Rs. 2,32,044 |
| Bank FD at 7.0% | 7.0% p.a. | Rs. 29,750 | Rs. 2,29,750 |
| Bank FD at 8.0% | 8.0% p.a. | Rs. 34,490 | Rs. 2,34,490 |
Figures are approximate, based on quarterly compounding.
The Rs. 2,294 difference between MSSC and a 7.0% bank FD may not sound like much. But if you’re parking the maximum Rs. 2 lakh and want zero credit risk, it’s a straightforward win.
Which One Is Right for You?
MSSC works better if:
- You want a government-backed, zero-credit-risk option
- You’re investing up to Rs. 2 lakh
- A 2-year tenure fits your plan
- The partial withdrawal flexibility matters to you
A bank FD works better if:
- You need a shorter or longer tenure than 2 years
- You’re investing more than Rs. 2 lakh
- You want a Section 80C deduction
- You’re comfortable with a small finance bank for a higher rate
Using both isn’t a bad idea either. MSSC for the Rs. 2 lakh allocation and an FD for anything beyond that or for a different tenure requirement.
FAQs on Mahila Samman Savings Certificate
A: Women and girls of any age. A guardian can open an account for a minor girl. Men cannot invest directly.
A: 7.5% per annum, compounded quarterly and paid at maturity. The rate is set by the government and stays fixed for the full 2-year tenure. It won’t change if the government revises small savings rates after you’ve opened the account.
A: Yes, in two ways. After 1 year, you can withdraw up to 40% of the eligible balance without closing the account. Full premature closure is allowed after 6 months in specific circumstances, at a lower interest rate.
A: No. Investments in MSSC don’t qualify for Section 80C deductions. The interest is also taxable as per your slab. TDS applies if the total interest exceeds Rs. 40,000 in a financial year.
A: The scheme was initially open for deposits until March 31, 2025. Check with your nearest post office or the India Post website for the current status before visiting.
Disclaimer : Fixed returns do not constitute guaranteed or assured returns. Investments in corporate debt securities, municipal debt securities/securitised debt instruments are subject to credit risks, market risks and default risks including delay and/or default in payment. Read all the offer related documents carefully.
