A sassy savings account

With increase in double-income families, men are clearly not the only ones controlling the purse strings. And the fact that women are increasingly playing an active role in savings and investment decisions is not lost on banks. They, therefore, have rolled out customised savings products that are said to cater to the specific needs of women. Quite a few leading banks including Axis Bank, ICICI Bank, IDBI Bank, Corporation Bank, Federal Bank, Karnataka Bank and Allahabad Bank offer savings account customised for women.

But are these schemes really exclusive and are they any better than the regular banking services offered? We take a look at some of the Mahila products offered by banks especially on the savings front.

The need to balance

Going by a woman's typical tendency to maintain a reasonable balance in her savings account, banks would love to have them as their savings account holders. But then, are the banks willing to offer you a zero balance account if you want one?

Not really, as in most cases an average quarterly balance of Rs 5,000 is a requirement. A few though do make an exception. Allahabad Bank's AllBank Mahila Sanchay account for instance can be opened and maintained for merely a rupee. However, using a cheque book and ATM card will require a minimum balance of Rs 500. This kind of account is typically suitable for women in the lower economic strata and also for first-time bankers, given its no-frills approach.

A few others though, come with a catch. Karnataka Bank's KBL Vanitha savings account for instance allows you to open with a zero-deposit but requires a monthly average balance of Rs 1,000 later. With ICICI Bank's Woman Advantage Savings account, a zero balance account can be maintained; but only if maintain a recurring deposit of Rs 2,000 every month . Once this deposit ceases to be active, the minimum average quarterly balance jumps to a whopping Rs 10,000! Hence it is important to know the terms and conditions fully before you sign up for an account.

Insurance

Who would not like to get an insurance cover when it is offered for free? Corporation Bank's Corp Mahila Power and Axis Bank's Smart Privilege account offer free personal accidental insurance cover of Rs 1 lakh and Rs 2 lakh respectively.

A few others such as Karnataka Bank are more innovative and offer free insurance cover up to Rs 50,000 for the first account holder for loss of jewellery due to burglary at home or snatching of jewellery during travel. Axis Bank too offers the same, for a nominal premium though. With soaring price of precious metals such cover may hardly be adequate to compensate for loss of jewellery. Women customers would do well to instead look for free or concessional locker facilities available to account holders. IDBI Bank's SuperShakti (Women's) Account for instance offers a 25 per cent discount on the locker charges.

Most of the women accounts also offer one or even two zero-balance savings account for the kids. Some, like Federal Bank even go so far to provide a silver debit card to the child (above 12 years) of the woman account holder with a withdrawal limit of up to Rs 15,000! Whether this is a boon or a bane, parents would know best.

Other common features in many of these accounts include providing shopping catalogues with products at special prices and investment advisory services. Do take on the latter with some caution though, as ‘financial advisory' services are often a cue for banks to plug the latest insurance plan on the market!

What to look for?

So are these exclusive women accounts really offering more bang for the buck? By and large it appears that they do not. For one, the annual charges on services such as debit card facility is often the same as those for a regular savings account. Two, the concessional insurance products may simply not be the one that meets your need and may not be a good product in the first place. Three, any regular savings account with a good balance is rewarded with discounts on retail purchases. You do not therefore need the special ‘shopping' offers. In fact, you may end up paying annual charges for conveniences such as an ‘easy shop' card when you can do as much without it through your normal savings account.

This said, there are still a few products that truly seek to provide some value add. Such schemes, if they fit your requirements may be worthwhile. Federal Bank's Mahila Mitra for instance, provides a temporary overdraft facility up to Rs 25,000 through ATMs. This simply means that you could temporarily withdraw such money even if you did not have a balance. While this would involve a charge, small-time women entrepreneurs may find the facility useful when they have insufficient funds. The same savings scheme also offers withdrawal in ATM as well as point of sales up to Rs 75,000 per day, while the normal limit in any where between Rs 25,000-40,000 in most schemes.

Another attractive scheme aimed at women who have income either through employment or through other sources (such as property income) is Corporation Bank's Corp Mahila Power. This product provides personal loans at a rate which at present is at least 1.5-2.5 percentage point lower than personal loans available with the same bank. The average quarterly balance required is also a more reasonable Rs 2500.

Similarly offers such as demat accounts offered at a good discount may be useful for those who wish to buy and hold products such as bonds/debentures.

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