Parents never spare any effort in providing you the best upbringing and now that they turn old and are retired, it is your time to help them. One of the prudent ways you can help them is by opening a senior citizens savings account. This is because if you open a savings account online for your aged parents, then your parents tend to get preferential services, higher returns on a savings and fixed deposit account, etc. Additionally, there are tax benefits too. Here are some of the important reasons why you must open a senior citizen savings account for your parents.

  • Higher rate of interest

Your parents can get the benefit of a higher fixed deposit interest rate with a senior citizen account. The interest rate on deposits is generally 0.50 per cent more than a regular fixed deposit account. Also, you can get higher flexibility and customization on your investment with financial institutions.

  • Better returns on idle funds

Your parents may earn passive income in form of commission, consultancy fees, rent, etc. In such a scenario, your parents do not require worrying about how they must deploy the capital. With Kotak Mahindra Bank, your parents can earn a higher savings account interest rate on the account balance than a regular savings account. What’s more, if your parents are eyeing to receive interest monthly, then they can opt for the fixed deposit monthly payout mode instead of cumulative payout.

  • Can access other investment options

A senior citizen bank account provides your parents with the convenience of making investments. In addition to recurring deposits and fixed deposits, you can simply access various other investments using your mobile apps or net banking platforms – like gold, mutual funds, ETFs (exchange-traded funds), etc. Moreover, such accounts even assist you to monitor as well as manage all your investments through digital platforms and receive updates through the bank statement.

Additional Read: Money-Saving Tips for Seniors: A Comprehensive Guide

  • Priority service

Your parents as senior citizens enjoy priority treatment. In fact, your parents can also request to have distinct banking services at their doorstep. For investment help, financial institutions also deploy relationship managers to guide them throughout. The convenience extends to out-of-branch services too. For instance, the debit card on senior citizens savings account may offer purchase protection of up to Rs 1 lakh on all consumer durables that you purchase.

Ending note

It is very important to open a senior citizen savings account as the account comes across as a gateway to a comfortable, secure, and financially rewarding post-retirement life. So, if your parents are already 60, ensure to open a senior citizen bank account for them so that they can get the benefits of a smooth banking system and make use of some exclusive benefits and privileges offered by such an account.

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.