All You Need to Know About A Pension Account

Savings account is the most basic type of bank account that banks offer. This account offers interest income along with moderate liquidity as well as a safe avenue to park funds.

Banks offer customised saving account for different types of customers. One type of saving account that they offer is called a pension account. This account is a special one for pensioners to receive credits for their pensions from their companies or from pension funds.

This account can be opened by:

• A Central Government or Civil Ministry employee who is covered under the Central Government Civil Pension Scheme. This scheme is operated by Central Pension Accounting Office, Department of Expenditure and Ministry of Finance
• Defence employees under Ministry of Defence (Army, Navy, Air Force) covered under Defence Pension Scheme of the respective Pension Sanctioning Unit i.e any retired or retiring Officer or Defence Civilian
• Employees working in an organization with 20 employees or more that is covered by Employees Pension Scheme.
• Existing members of ‘Members of Employees’ Family pension scheme.

A pension account is a zero-balance saving account. This means that the pensioner does not need to maintain any minimum balance in the account. The entire pension amount can be withdrawn without any fear of penalties. Generally, for a regular savings account, each bank has some minimum balance requirement. If this is not met, banks debit a certain penalty from the account. However, there is no such condition for a pension account.

Most banks provide regular saving account benefits to this account such as free cheque book, net banking and mobile banking apps, free ATM cum debit card. They also pay some amount of interest on the pension balance. It can be used to make bill payments as well.

The pensioner will need to submit the bank account details to the employer so that it can be added to the pension payment order. This PPO once filled will have to be submitted to the bank following which the pension will be collected. The bank will submit the request to the employer and pensions will get paid to the account every month.

However, this account can’t be opened at any time. It must be opened in the individual’s name after retirement or 6 months before retirement.

How to open a pension savings account?

It is possible to do zero balance account opening online. The account opening procedure is streamlined and once you fill up a form, the bank’s customer care executive will contact you to get your documents collected.

It is very easy to open zero balance saving account offline as well. You will need to go to the bank branch and fill up an account opening form and provide the required documentation. Once this application is processed, the bank account will be opened.

Documents required for a pension savings account

• Passport size photos
• Address proof (Passport, Aadhar card, Voter ID, Driving Licence, Electricity bill, Telephone bill, Gas bill, Lease rental papers, Purchase Documents, Home loan, Ration card)
• Identity proof (PAN card, passport, Aadhar card, Voter ID, Driving License)

This account can be opened in an individual name or jointly with the spouse. It is very easy to operate this zero-balance saving account and it can help the pensioners manage their funds post retirement.

How to Open Savings Bank Account both Online & Offline

Opening a savings account is always a good idea as it keeps your excess money safe, especially the ones which are not required for immediate use. Besides, opening a saving account helps to encourage saving money for the future. From a schoolchild to a senior citizen, anyone can open a savings bank account with a bank or any financial institution. It is on you to choose which bank you need to open an account with.
Features of having a savings account 

• Helps to promote savings
• No restrictions on the number of deposits
• Can withdraw either by a cheque or withdrawal slip. The facility has been made easier withdrawing using an ATM card.
• There is no validity period for a saving account.
• There should be a minimum amount for opening the account. Also, a minimum balance should be maintained based on which you earn interest. But these days, there are new banks that offer zero balance saving account, which comes with no maintenance of account balance.
• An online facility like mobile banking app is available for managing your savings account. With this, you can make any bill payment or fund transfers or pay household expenses. 

How to Open a Savings Account Offline
Due to the emergence of mobile banking and online facilities, it is much easier for the customer to open a savings account. But the high traffic or network issue creates server problems which at times becomes challenging for customers to complete the process. Also, who are not so tech-savvy, can follow the mentioned offsite steps –

• Research – Before opening an account, conduct proper research about banks and their interest rates. Select the one which fits your needs and offers high-interest rates.
• Documentation – For opening an account on savings, you need to bring a copy of your identity proof, two passport size photographs, address proof, income or employment proof (if required), and age proof to your nearest branch of the bank.
• Opening form – When you visit the bank, the representative takes care of the process. They provide you with an account opening form, which needs to be filled thoroughly. Submit the form with the copies of documents to the representative.
• Processing time – They then process the form. Based on the bank, the processing gets cleared and opened within one to 12 working days. 

Online Savings Account Opening – Steps to Follow
Online saving account opening is the best option and possible through online banking apps. It takes minutes and involves a hassle-free process.

• After researching different banks and their interest rates, choose the best one that fits your requirements.
• Log on to the respective bank website in which you wish to open an account. Not all bank accounts have an online bank account opening with zero balance.
• Fill in the online form, upload documents such as ID and address proofs.
• The back-end team of the bank verifies them, and you can begin operating the account within hours. 

Final verdict:
The best thing about saving account is there is one for every requirement.