Is a Women’s Savings Account Better Than a Regular Savings Account?

February 22, 2022 Mutual Fund

India has witnessed a sea change in the development and progress of women over the last few decades. With access to education and healthcare, more women today have financial freedom than ever before. Their influence in the decision-making and contribution to the family income, savings, children’s education, retirement plan, and society at large has expanded significantly. The growing demographic of qualified, high-income, professional, single women with more cash in hand, i.e., a higher purchasing power, can subsequently propel India’s economic growth. In this light, several banks have introduced a Special Saving Account designed exclusively for the progressive Indian women. However, before opening a Women’s Savings Account, it is necessary to understand the difference between a regular savings bank account and the Special Woman’s Savings account, so you can make an informed decision and choose the one best suited for you.

Let us look at some of the basic features and benefits of the regular Savings Accounts and whether there is any value addition to the same features and benefits of the Women’s Savings Account:

1. Average Balance:

Most private banks have an average balance requirement of Rs 10,000 in urban and metro areas for the regular Savings Accounts. The banks have not offered any relaxation in the average balance requirement for Women’s Savings Accounts. So, no matter which account you open, you will have to maintain the average minimum balance. Upon failing to maintain the minimum average balance, the banks charge hefty charges.

2. Discounts and Cash Backs:

The banks usually offer various benefits to Women’s Savings Account debit cards. These cards generally have higher cash withdrawal limits and number of cash withdrawals compared to the regular debit cards. Additionally, several banks offer 2x cashback points on shopping, discount coupons, extra cashback points for specific websites and mobile apps, etc.

So, if you prefer to do shopping through a debit card, you should definitely consider opting for a Special Women’s Savings Account to earn maximum rewards. However, before opening an account, do not forget to check if the discounts and rewards are applicable on your preferred merchants. Also, there could be some hidden terms and conditions that you should check. Many banks offer cashbacks only after you have spent the minimum amount through a debit card and the cashback is usually credited after 90 days. Alternatively, the terms and conditions could state that you might have to login into your net banking to convert the cashback points into your account.

3. Debit Card Annual Fees:

These banks provide the basic debit card, on the regular and women’s savings accounts, without any annual fee. However, if you want the high-end debit card with more attractive offers and rewards, you will have to pay an annual fee that varies from bank to bank. These premium cards are offered without any fees to those premium account holders who maintain higher balances in Savings Accounts. So, there is no difference in the debit card annual fees of regular Savings Bank Accounts and Women’s Savings Bank Accounts.

4. Insurance Cover:

Insurance cover is generally not provided to regular Savings Account holders, but many banks offer an Accidental Death Insurance Cover of Rs 10 lakhs to Women’s Savings Account holders. You should check the details of the facility before opening of an account because some banks may not offer this benefit on Women’s Savings Accounts. Please note that the sum assured could differ from bank to bank depending on the Accidental Death insurance policy they offer. Furthermore, check the terms and conditions of the insurance cover beforehand and ensure you provide the correct nominee details.

5. Loan Offers:

While some banks may offer discounts on the processing fees of loans like a car loan, home loan, personal loan, etc. to their regular Savings Account customers, most banks offer such facilities only to premium account holders and Women’s Savings Account holders. Even a slight discount of 0.25% or 0.50% can make a substantial difference when the loan is a large amount.

6. Health Check-Ups:

Many banks have started offering free or discounted yearly health check-ups to their Women’s Savings Account holders. The banks generally offer this benefit with the health insurance company they have a tie-up with. Some banks offer this facility to +1 family member. This also helps the banks generate leads for their third-party product – health insurance.

7. Lockers:

Some banks offer discounts on the locker rent to their Women’s Savings Account holders. This discount could vary from bank to bank. Some banks offer up to 50% discount on the first year of locker rent, whereas some do not offer any discount at all. If you have a premium Women’s Savings Bank Account, you can also get a free locker for the first year, depending on the terms and conditions of the bank. However, no such benefit is offered to the regular Savings Account holders.

8. Auto-Sweep Facility:

Generally, an auto-sweep facility is offered to both, the regular Savings Banks Accounts as well as the Women’s Savings Bank accounts. However, some leading banks offer this facility only to Premium Savings Accounts and Women’s Savings Accounts. You can set a threshold limit in your Savings Account, any amount deposited above the threshold will automatically move to a fixed deposit and you earn a higher rate of interest prevailing on the tenure that it remains with the bank. In case your Savings Account balance is insufficient to clear your issued cheque, then the deficit amount will be transferred from your Fixed Deposit to your Savings Account. Suppose the minimum balance requirement for your account is Rs 10,000, and say, if you do not maintain the minimum required balance and have a sweep-in FD, the FD will automatically break and the amount is transferred to your savings account, so that you do not get charged for a low balance in the savings account.

9. Family Accounts:

Many banks offer one add-on account with a Women’s Savings Account, typically a minor account. So, you can open a zero-balance Kids’ Savings Account for your child, where you do not have to maintain a minimum balance. This account can help children learn the importance of savings from an early age. Such an add-on account is not offered with a regular Savings Bank Account, so you will have to open a regular Kid’s Savings Account and maintain a minimum balance in this account as well.

To Conclude:

We have seen the several benefits banks offer to their Women’s Savings Account holders. That said, it is clear that Women’s Savings Accounts have higher benefits and offers/rewards compared to a regular Savings Accounts. However, you should remember that not all banks offer all these benefits. While one bank might be offering free Accidental Insurance Cover, the other might be offering discounted health check-ups. Hence, before opening a Women’s Savings Account, it is advisable to compare the Women’s Savings Account features and benefits of different banks. This will help you choose the right savings account and bank that offers the most benefits useful to you.

This article first appeared on PersonalFN here