Mahila Samman Savings Certificate 2026: Closed — What to Do Instead
Mahila Samman Savings Certificate closed for new deposits from April 2025. What the scheme was, who it helped, and the three best alternatives for women investors in 2026.
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Mahila Samman Savings Certificate in 2026: the scheme is closed
The direct answer first: the Mahila Samman Savings Certificate (MSSC) stopped accepting new deposits on 31 March 2025. There was no extension in the Union Budget 2026-27, and no fresh accounts are being opened at post offices or banks. If you are searching for this scheme hoping to invest in it today, that window has passed.
Below is what the scheme was, why it worked well for certain investors while it lasted, and where to put money now if you were hoping to use it.
What was the Mahila Samman Savings Certificate?
The MSSC was a one-time women's savings scheme announced in Budget 2023-24 by Finance Minister Nirmala Sitharaman. It ran from April 2023 to March 2025 — a two-year window during which women or guardians of girl children could open accounts at post offices and select public sector banks.
The terms:
| Feature | Details |
|---|---|
| Interest rate | 7.5% per annum, compounded quarterly |
| Tenure | 2 years from date of deposit |
| Minimum deposit | ₹1,000 |
| Maximum deposit | ₹2,00,000 |
| Partial withdrawal | Up to 40% of eligible balance after one year |
| Eligible investors | Women, or guardian on behalf of a girl child |
| Tax on interest | Taxable per the investor's income slab; no Section 80C deduction |
The 7.5% rate compounded quarterly was meaningful in mid-2023 when the scheme launched — comparable bank FDs for 2-year tenures were offering 6.5–7% for most customers, and the government guarantee added a risk-free premium. The scheme was particularly well-suited for women in the 0–5% tax bracket, where the taxable interest barely dented the effective return.
What happened to the scheme?
The MSSC was conceived as a limited-period instrument, not a permanent one. The Department of Posts issued SB Order No. 03/2025, which formally closed the scheme to new deposits from 1 April 2025.
No extension was announced in the Union Budget 2025-26 or 2026-27. There is no indication from the Ministry of Finance that the scheme will be revived.
If you opened an account before 31 March 2025, it is fine — it continues earning 7.5% compounded quarterly until the 2-year maturity date, at which point the full amount is credited to your linked savings account.
If you did not open an account, you cannot open one now.
Was the scheme actually good?
Honestly, it depended on the tax bracket. For women with no income or low income (0–5% slab), 7.5% compounded quarterly with a government guarantee was a strong deal — better than most bank FDs, and with a shorter 2-year lock-in than PPF's 15 years.
For women in the 20% or 30% income tax brackets, the picture was less compelling. The interest was fully taxable, so the post-tax return dropped to around 6% (20% bracket) or 5.25% (30% bracket). At those effective rates, a tax-free PPF or SSY made more sense if the investment timeline matched.
The partial withdrawal option at 40% after one year was a genuine advantage over NSC or tax-saving FDs where premature closure is either restricted or penalised heavily. That flexibility was probably underused — most people who opened MSSC accounts treated them as fixed 2-year instruments anyway.
Taxation: what existing account holders need to know
The interest earned on MSSC is not tax-free. It is added to your income and taxed at your applicable slab rate.
TDS is not deducted on the interest because the annual interest on a ₹2 lakh deposit at 7.5% is ₹15,000 — below the ₹40,000 TDS threshold for post office savings instruments. But the income still needs to be declared in your ITR under "Income from other sources."
There is no Section 80C deduction on MSSC deposits. The scheme was purely a returns-focused product, not a tax-saving one.
If your account matures in 2026, the interest should be reported in your ITR for the assessment year corresponding to the maturity year. If you are uncertain, a chartered accountant can confirm the exact year of accrual based on whether you follow the mercantile or cash system of accounting.
What to do instead in 2026
The right alternative depends on what you were actually trying to achieve with MSSC.
1. Post Office 2-year Time Deposit
The Post Office 2-year TD currently offers 7.0% per annum, compounded quarterly — the nearest structural replacement for MSSC. Same government guarantee, same quarterly compounding, similar tenure, and yes, the interest is still taxable. The difference is it has no women-specific restriction and no ₹2 lakh deposit cap.
If you want a short-duration, government-backed fixed return, this is the one.
2. Sukanya Samriddhi Yojana — if you have a daughter under 10
If you are investing on behalf of a girl child, SSY at 8.2% tax-free is substantially better than MSSC ever was. It is a higher rate, the interest is exempt from income tax (MSSC's was not), and the government backing is the same. The trade-off is the 21-year lock-in, which is much longer than MSSC's 2 years. See the full SSY guide for current details.
3. PPF — if you want tax-free long-term growth
PPF at 7.1% looks lower than MSSC's 7.5%, but the interest is entirely tax-free. For anyone in the 20% or 30% bracket, the after-tax yield on PPF exceeds MSSC's post-tax return. PPF also comes with Section 80C deduction on contributions. The 15-year lock-in is longer, but partial withdrawals are permitted from year 7 onward.
PPF is the better option for women who already have their Section 80C limit to use and want a safe, tax-efficient long-term corpus. See the PPF vs FD comparison for a detailed breakdown.
What about bank FDs for women?
Several banks offer marginally higher FD rates for senior citizens, but a dedicated "women's FD rate" is not a universal practice. A few smaller co-operative banks and regional rural banks have run women-specific FD products, but these carry higher credit risk than post office or nationalised bank instruments.
For most women investors, the Post Office TD, PPF, or SSY (if eligible) will be more reliable than chasing a slightly higher FD rate from a lesser-known institution. Returns of 7–7.5% from a government-backed instrument beat the risk-adjusted return of a 7.8% co-operative bank FD.
The bottom line
MSSC did what it set out to do: give women a short-duration, government-backed instrument paying a bit more than bank FDs. For two years it worked. The scheme is closed now.
If you hold an existing account, let it run. 7.5% compounded quarterly on a sovereign-backed instrument is still a good outcome, and breaking it early gains you nothing unless you have a specific need the 40% partial withdrawal can cover.
If you are trying to invest today, the Post Office 2-year TD is the closest structural replacement. It is not women-specific, but neither is the money.
Frequently asked questions
Is the Mahila Samman Savings Certificate still open in 2026?
No. The scheme was discontinued from 1 April 2025 as per the Department of Posts SB Order No. 03/2025. No new deposits have been accepted since then, and no extension was announced in the Union Budget 2026-27. Existing accounts opened before 31 March 2025 continue until their 2-year maturity.
What is the interest rate on Mahila Samman Savings Certificate?
The scheme offered 7.5% per annum, compounded quarterly, for the full 2-year tenure. This rate was fixed at deposit and did not change based on quarterly government revisions. For reference, the current Post Office 2-year Time Deposit offers 7.0%.
Can I still make partial withdrawals from an existing MSSC account?
Yes. Existing account holders can withdraw up to 40% of the eligible balance after completing one year from the date of deposit. The partial withdrawal provision continues to apply until the account matures.
Is the interest on MSSC taxable?
Yes. The interest is taxable at the investor's applicable income tax slab rate. There is no Section 80C deduction on MSSC deposits, and no TDS is deducted because the annual interest on the maximum deposit (₹2 lakh) falls below the ₹40,000 TDS threshold. You need to report the interest under "Income from other sources" in your ITR.
What is the best alternative to MSSC in 2026?
For a 2-year fixed-return goal: the Post Office 2-year Time Deposit at 7.0% is the closest replacement. For investing on behalf of a girl child under 10: SSY at 8.2% tax-free is much better. For long-term tax-efficient saving: PPF at 7.1% (tax-free) beats MSSC's after-tax return for anyone in the 20–30% bracket.
Was the MSSC better than a bank FD?
When it launched in April 2023, yes — 7.5% compounded quarterly with a sovereign guarantee beat most bank 2-year FD rates at the time. By late 2024, some banks had raised FD rates to 7.25–7.5%, narrowing the advantage. The government guarantee was still the differentiator. In 2026, with MSSC closed, a 1-2 year FD from SBI or a large private bank or the Post Office TD are functionally equivalent for most savers.
This article is for informational purposes only. Scheme rules are as per government notifications available at the time of writing. Consult a SEBI-registered advisor for personalised investment guidance.
See also: Sukanya Samriddhi Yojana 2026 complete guide | PPF vs FD: which wins in 2026