Post-retirement, many senior citizens are not aware of the investment options available to them. As such, they find money management a complex task. Senior citizens want a safe investment avenue that will also earn them a good rate of return on their life’s savings. However, due to their age factor, there are not many investment options available that give both safety and a good return on their investment.
A savings account can be considered a good investment option that a senior citizen can avail. A savings account can be opened with a bank, co-operative, post office, and such related institutions. A savings account provides the needed security apart from a good rate of return, which will ensure a senior citizen a regular source of income post-retirement.
Now, many banks in India offer customized senior citizen savings accounts at a good rate of interest, along with a host of other benefits.
Everything You Need To Know About Senior Citizen Savings Accounts And Why They Are Essential
Let us first understand the common features of senior citizen savings accounts, which may differ amongst banks. This would help to evaluate the importance of senior citizens accounts.
Features of Senior Citizens Savings Accounts
- Eligible for senior citizens who have crossed 55 years of age
- Attractive rate of interest
- Autopay feature to pay bills directly from your senior citizen savings account
- Priority service at branches
- Home-banking facilities
- Cashback facility on purchase made through debit cards of the savings account
- Discounts on locker rentals
- Overdraft facilities
- Healthcare benefits
- SMS alerts for any transaction undertaken to ensure the safety of your transactions
- Mobile/internet banking facilities available for digitally savvy senior citizens
Why is a Senior Citizens Savings Accounts considered essential?
There are various benefits of depositing their life’s savings in a savings account for a senior citizen. The key reasons why a senior citizen savings account is considered essential are provided below.
- Safe and Guaranteed Returns
A senior citizen savings account is the safest investment option for senior citizens, which provides a guaranteed return. A senior citizen can thus plan their expenses accordingly without having to worry about the financial aspect.
- Better Interest Rate
A senior citizen savings account pays a higher rate of interest as compared to a normal savings account. This helps senior citizens to earn moderate to good returns on their savings account deposits.
- Quarterly Interests
Under the senior citizen savings account, interest is paid every quarter. This ensures that senior citizens have sufficient income flow throughout the year to meet their essential expenses like medical bills and so on.
- Tax Benefit
The government also provides various benefits to senior citizens in the form of tax exemptions on their savings with banks. Apart from the tax exemption of Rs 1.50 lakhs available under Section 80C of the Income-tax Act, 1961 on interest received, senior citizens above the age of 60 years get additional tax benefit under Section 80TTB of the Act, on their savings account up to Rs 50,000 in a financial year.
- Simple to access
Senior citizens have to just open a senior citizen savings account at any bank to avail themselves of its benefits. A savings account with a bank is easier, as they have many branches across the country, making it easier to access.
- Easily transferable
Banks now have various branches across the country, making it easy for senior citizens to get their senior citizen savings account transferred all over India when they move homes.
A senior citizen savings account, like the Kotak Grand Savings Account offered by Kotak Mahindra Bank provides customized benefits, enabling a senior citizen to accumulate enough corpus post-retirement and manage their expenses wisely, leading to a stress-free retired life.