Banks offer senior citizens various benefits, from banking services to taxation. The following are a few benefits and privileges senior citizens receive from banks:
Free At Home Basic Banking Service: According to the Reserve Bank of India (RBI) mandate, banks must provide basic banking services free of cost at home to “Divyangjan”, differently-abled persons, and citizens aged 70 years and above.
Ashish Misra, chief operating officer (COO) of retail banking at Fincare Small Finance Bank, said free at-home banking services provided by banks include cash withdrawal and deposit services, delivery of demand drafts, know-your-customer (KYC) documents collection, life certificates submission, income tax 15G/H form collection, etc.
Misra added that all banks have a dedicated grievance redressal officer at their branch offices to address issues related to elderly persons.
Insurance Cover: Banks such as IDFC and SBI provide complimentary or nominal premium-paying personal accident insurance cover to senior citizens with savings accounts at their bank.
S. Anand, chief executive officer (CEO) and co-founder of PaySprint, a neo-bank, said the insurance premium increases when a person gets older, and sometimes it also gets difficult to secure insurance coverage. So, “some banks have bundled a personal accident insurance product along with their savings account” to help senior citizens.
Senior Citizen Savings Scheme (SCSS): Banks, such as Canara Bank, Union Bank of India, etc., and post offices offer senior citizen savings schemes (SCSSs). People who opted for a voluntary retirement scheme (VRS) or superannuation in the age band of 55 to 60, retired defence staff above 50 and below 60 years, and other specified seniors can invest in SCSS.
The scheme currently offers an interest rate of 7.6 per cent, with tax deduction benefits under section 80C.
Convenient Physical Branch Banking: All banks are mandated by the RBI to create a special counter to service senior citizens’ needs. Senior citizens can avoid long queues at the banks by availing of these special counters.
Misra said all Indian banks auto-convert a person’s KYC-verified savings bank account to a senior citizen account by taking the age information from the KYC form. Senior citizens also get free checkbooks in certain banks.
Enhanced Interest Rate on Fixed Deposits: Banks offer higher interest rates on fixed deposits to seniors. For example, the Bank of Baroda (BoB) gives 6.6 per cent to senior citizens on fixed deposits below Rs 2 crore for a one-year tenor. For others, it is 6.1 per cent. On November 14, BoB increased its retail deposit rates by 1 per cent (100 basis points) across various tenors and amounts.
"Senior citizens are always offered specialised and tailored services. At, the South Indian Bank, we offers unlimited transactions in other bank ATMs through debit cards, higher interest on FD Rates, door step banking services, concessional pricing on lockers and loans, complimentary lounge access at airports, higher transaction limits at POS terminals. We also offer sweep in sweep out facility to our customers to avail higher interest rates on funds parked in the savings account," said Sanchay Sinha, country head, retail banking, South Indian Bank.