A savings bank account is a necessity. It ensures that you develop a habit of saving for an insecure and unpredictable future. Further, it ensures that for any needs or requirements, you do not have to opt for any loan or debt.
For most of us, the savings account is a safe, secure, and easy way to park our savings. The retail-based banks understand and value this sentiment. IT has ensured that most of the government and private sector banks also offer customized savings bank accounts to meet our unique needs.
One such personalized option is the senior citizen savings account. If you are above the age of 60, you are eligible for a savings account for senior citizens that offers benefits that are more suited for your needs.
Below is a list of advantages of a senior citizen savings account:
- Interest Rate
- A senior citizen savings account offers a high-interest rate on the fixed deposits that are created out of the funds parked. Usually, 0.5% higher than the usual interest rate is offered. It ensures that you earn more on your savings. Thus, opening a fixed deposit tagged to a senior citizen account is more beneficial.
- Other Benefits
- The senior citizen savings account offers additional benefits. Medical benefits such as concession on hospitalization, medical bills, consultations, treatments, etc., are part of this account. Banks even offer a health card and insurance features for their senior citizen customers. Banks have a list of hospitals and clinics on their panel where their customers can avail preferential rates for their medical requirements.
- Some banks waive charges for debit card usage while other banks charge a nominal amount annually. They have a preferential rate for the locker services as well. Banks also allow discounts on the Demat accounts for senior citizen accounts.
- ATM Withdrawals
- Some banks completely waive of charges while others charge a very nominal amount for withdrawal from ATMs of other banks. The withdrawal limit on this account is also higher as compared to any other accounts. It is to ensure that senior citizens do not have to frequently step out to withdraw funds.
- Tax component
- Senior citizens also have an income tax relaxation on their earnings. For instance, they have no TDS (tax deductible at source) component for the earnings to a limit of INR 50,000.00. Thus, a senior citizen savings bank account would help you avail of these benefits easily. However, to avail of the TDS benefit, customers need to submit Form 15H in their bank branch by March 30 (extended to June 30 for FY 2019-20). The banks are also aware of the latest update on any tax regulation for senior citizens and automatically apply the benefits to all their senior citizen accounts.
In conclusion, savings accounts especially for senior citizens have many features based on the unique, and special needs of elderly people. However, as many banks are offering such accounts, you must research the market and choose an ideal option. It will help you to choose the right banker based on your requirements.