The Budget 2023 was the current Government’s last full-fledged budget before the union elections in May 2024. All sections of society had a lot of expectations from the budget. The Finance Minister did her best to accommodate most expectations with her limited resources. The Budget 2023 announced various measures for different sections of society. There were 2 notable announcements for women and senior citizens. Let us discuss them.
Mahila Samman Bachat Patra
To commemorate the Azadi Ka Amrit Mahotsav, the Finance Minister has proposed to introduce the Mahila Samman Bachat Patra or the Mahila Samman Savings Certificate. It is a one-time new small savings scheme. The salient features include:
- The scheme will be available for investment till March 2025.
- It will offer a deposit facility in the name of women or girls.
- The tenure of the scheme will be fixed for 2 years, the maximum deposit amount will be Rs. 2 lakhs, and the interest will be fixed at 7.5% p.a.
- Partial withdrawals will be allowed.
There was no announcement on whether the interest earned will be taxable or not. We will get to know about the taxation, where to open the deposit, and other details once the product is formally launched in due course of time.
READ MORE: Women in Budget 2023: Government takes steps to empower women economically
How much will the investor earn?
A deposit of Rs. 2,00,000 will yield Rs. 2,31,125 in 2 years at the rate of 7.5% p.a. as follows:
At the end of the 1st year, the interest of Rs. 15,000 will be added to the original principal of Rs. 2,00,000 making it Rs. 2,15,000.
At the end of the 2nd year, the interest of Rs. 16,125 will be added to the principal of Rs. 2,15,000 making it Rs. 2,31,125 on maturity.
While the return of 7.5% p.a. is good, it is a one-time investment product with a maximum investment limit of Rs. 2 lakhs for a short tenure of just 2 years.
Increase in investment limit for Senior Citizen Savings Scheme (SCSS)
The Finance Minister also announced the proposal to increase the investment limit for the Senior Citizen Savings Scheme (SCSS). The SCSS deposit limit has been proposed to be doubled from the current limit of Rs. 15 lakhs to Rs. 30 lakhs. A senior citizen couple will be able to invest Rs. 60 lakhs (each will be able to invest Rs. 30 lakhs in their respective account) in SCSS.
The SCSS is a government-sponsored deposit scheme that can be opened at either post offices or specified bank branches. It has a tenure of 5 years and pays quarterly interest. The interest rate is announced by the Government every quarter. Recently, the Government increased the interest rate on SCSS to 8% for the current quarter (1st January to 31st March 2023). The interest is paid out quarterly on 31st March, 30th June, 30th September and 31st December.
READ MORE: Women in Budget 2023: FM announces Mahila Samman Saving Certificate scheme; to offer 7.5% interest
Increase in investment limit for Monthly Income Account Scheme
The Finance Minister also announced the proposal to increase the investment limit for the Monthly Income Account Scheme. The limit will be enhanced from the current Rs. 4.5 lakhs to Rs. 9 lakhs for a single account and from the current Rs. 9 lakhs to Rs. 15 lakhs for a joint account.
A depositor can invest a lump sum amount and earn a monthly interest. The interest rate payable for the current quarter (1st January to 31st March 2023) is 7.1% p.a.
More investment options for conservative investors
Budget 2023 has increased the investment limits on the SCSS and the Monthly Income Account Scheme. Investors with a conservative risk profile can invest more money in these schemes. Also, since these are Government sponsored schemes, they are risk-free. If you are a female, you have an additional product to invest in which is the Mahila Samman Savings Certificate.
Gopal Gidwani is a freelance personal finance content writer with 15+ years of experience. He can be reached at LinkedIn