Most individuals’ regular employment income typically reduces or stops completely during retirement. Therefore, building an adequate retirement corpus by proactively investing your savings becomes vital to funding expenses in the non-working years.
Fortunately, banks in India offer specialised savings accounts for senior citizens who pay higher interest rates to meet post-retirement income needs.
This comprehensive guide will provide complete details about senior citizen savings accounts, including eligibility criteria, preferential interest rates, taxation benefits, additional features, and tips to maximise returns. Read on to make an informed decision.
Who is Eligible for Senior Citizen Savings Accounts?
These special savings accounts are meant for customers who have crossed the age of 60. Both new and existing account holders can convert their accounts to senior citizen accounts after turning 60. Even if you are not 60, you can still open a Senior Citizen Savings Account with a Senior Citizen in joint mode. However, the Senior Citizen would need to be the primary applicant.
To open an account instantly, submit your KYC documents at your nearest bank branch. Some leading banks, like IDFC FIRST Bank, also allow the digital opening of senior savings accounts online by uploading e-KYC documents.
Preferential Interest Rates on Savings
The most significant benefit is the higher senior citizen saving account interest rate offered on deposits than regular accounts. Most banks provide a 0.50% to 0.75% markup on senior citizen accounts over regular savings accounts.
Unlike fixed deposits, savings account rates are revised periodically but linked to RBI’s repo rate.
Doorstep Banking
Many banks now offer specialised savings accounts with exclusive perks for senior citizen customers. One of the most appreciated benefits is free doorstep banking. This allows seniors to avoid extra trips to the bank by having staff come directly to their home or office to pick up cheques for deposit or deliver recent account statements.
Senior customers also enjoy priority treatment whenever they visit a branch. This includes separate queues, seating areas, and faster service for their transactions and questions. With personalised assistance at home and in the branch, banks aim to make the banking experience seamless for senior citizens.
Additional Features
Many banks, such as IDFC FIRST Bank, allow senior citizens to open savings accounts as usual or connected fixed deposits. It also offers assured returns schemes and allows sweep-in from FDs to savings accounts to earn higher interest monthly rather than quarterly.
In addition to preferential interest rates, many banks offer senior citizens additional privileges, such as free annual health checkups, cyber insurance of up to ₹ 2 lakhs, faster customer service, and faster request processing.
Tips to Maximise Returns
Follow these smart tips to earn better interest on senior citizen savings accounts:
- Compare interest rates of leading banks every 6-12 months
- Open an account just before you turn 60 to accrue higher interest immediately
- Set up auto-transfers to shift excess funds from idle accounts to optimise senior savings interest income
- Invest sizeable lump sums in Bank senior citizen FDs at even higher fixed deposit interest rates
Leading banks like IDFC FIRST Bank currently offering savings interest rates of 7.25%, senior accounts provide a safe way to earn monthly income. They are among the best savings account for senior citizens and should be included in your retirement planning portfolio alongside other fixed-income options.
Conclusion
Senior savings accounts offer stability, liquidity, simplicity, and tax advantages, making them a must-have component of your golden year’s financial plan. Using specialised senior savings products allows you to optimise returns while maintaining access to your savings.
