There’s a lot of buzz about saving money, but can we actually do it? That’s a big question, and people will have various opinions. However, it’s important to recognize that saving is also a habit. Two years ago, the government introduced a program during Amrit Mahotsav aimed at encouraging women to develop saving habits. It’s called the Mahila Samman Bachat Prashikshak Yojana (MSSC).
Discover more about MSSC
This initiative is designed to help women achieve financial security and cultivate saving habits. With a competitive interest rate of 7.5% and a fixed term of two years, it’s a secure investment choice. Any woman or girl can participate, and parents can even set up accounts for their minor daughters. Don’t wait too long, though—this opportunity is available for just 5 days!
Who can invest?
The best part? Any woman or girl can invest in this scheme! Whether you’re a working professional, a homemaker, or a student, you can open an MSSC account. Plus, if you have a young daughter, you can create an account for her as well. There’s no age limit set by the government, so women of all ages can benefit. You can also open multiple accounts, but keep in mind that you can only open a second account after three months. Joint accounts aren’t allowed under this scheme.
What interest can I expect?
Now, let’s talk about the interest rate. When you invest in the Mahila Samman Certificate Scheme, you’ll earn an interest rate of 7.5% per year, and this interest is compounded quarterly. This means that every three months, the interest you earn gets added to your principal, so in the next quarter, you’ll earn interest on the new total. It’s a fantastic way to grow your savings quickly!
What does quarterly compound interest mean?
When we say interest is compounded quarterly, it means that every three months, the interest is added to the principal amount. In contrast to simple interest, which is calculated only on the principal, compound interest is calculated on both the principal and the interest that has already been earned. Quarterly means this happens four times a year.
First trimester (after 3 months):
With an annual interest rate of 7.5%, the quarterly rate comes out to 1.875%.
So, the interest on Rs 10,000 is calculated as 1.875% of that amount, which equals Rs 187.50.
Adding this to the principal gives a total of Rs 10,000 + Rs 187.50 = Rs 10,187.50.
Second trimester (after 6 months):
Now, interest will be calculated on Rs 10,187.50.
The interest for this period is approximately 1.875% of Rs 10,187.50, which is about Rs 191.02.
This brings the total to Rs 10,187.50 + Rs 191.02 = Rs 10,378.52 (approx.).
Third trimester (after 9 months):
Next, interest will be applied to Rs 10,378.52.
Calculating 1.875% of this amount gives us around Rs 194.59.
So, the new total becomes Rs 10,378.52 + Rs 194.59 = Rs 10,573.11 (approx.).
Fourth trimester (after 12 months):
Finally, interest will be charged on Ra10,573.11.
The interest for this last period is approximately 1.875% of Rs 10,573.11, which is about Rs 198.24.
Adding this to the previous total results in Rs 10,573.11 + Rs 198.24 = Rs 10,771.35 (approx.).
This process shows how interest is added to the principal each quarter, and the next quarter’s interest is calculated on the new total.
How much can I invest?
You can invest anywhere from Rs 1,000 to Rs 2 lakh in this scheme. This range gives you the flexibility to invest based on your financial situation, making MSSC suitable for both small and large savers.
Will there be tax exemption as well?
No, while TDS won’t be deducted from this investment, you won’t receive any tax exemption under section 80C.
When can I withdraw money?
The MSSC has a fixed term of two years. However, if you need funds after one year, you can withdraw up to 40% of your investment. This option is handy for emergencies, but keep in mind that you can’t withdraw any amount before the one-year mark.
Desclaimer: For any financial invest anywhere on your own responsibility, Times Bull will not be responsible for it.
