Big Story | Financial products for women

Banking products for her

Women enjoy a few perks on special female-only savings accounts and a few concessions on products such as home loans, with select banks.

Savings accounts

A few banks offer special savings account for women customers, such as HDFC Bank’s Women’s Savings Account, ICICI Bank’s Advantage Woman Savings Account, Kotak Mahindra Bank’s Silk Women’s Savings Account and RBL Bank’s Women’s First Savings Account. While the banks do not offer any extra interest on these savings account (compared with their regular savings accounts), there are other definite perks attached to these women-only products.

Only women aged 18 years and above are eligible for such accounts. These special savings accounts stipulate a minimum average (monthly) balance of ₹2,500- 10,000.

Perks on card spends: Banks offer higher purchase limit and more free withdrawals on the debit cards issued with the women-only savings accounts. RBL Bank allows 10 free ATM transactions at other bank ATMs, for its Women’s First Savings Account customers (compared with five free transactions for its regular savings account customers). The bank also offers higher ATM withdrawal and POS (point of sale) purchase limits (per day) on these accounts.

Kotak Mahindra Bank offers cash withdrawals of up to ₹40,000 and a POS limit of up to ₹2 lakh on the Kotak Silk debit card which comes with the bank’s women’s savings account. This is similar to the one offered on the bank’s Classic Savings account (#PayShopMore Debit Card) open for all.

However, the complimentary insurance cover on lost-card damages are higher in the Kotak Silk debit card. Silk customers get to enjoy a cover on lost-card liability of up to ₹3.5 lakh (compared with ₹2 lakh for Kotak #PayShopMore Debit Card) and a cover on purchase protection of up to ₹1 lakh (₹50,000 in the case of the #PayShopMore card).

Besides liberal limits on debit cards, banks also offer special cashbacks and rewards. HDFC Bank’s women’s savings account, for instance, offers a cashback of up to ₹1 for every ₹200 spent on the EasyShop Woman’s Advantage Debit Card. In the case of ICICI Bank’s Advantage Woman Savings Account, one can avail oneselves of a cashback of up to ₹750 every month on debit card use.

Save on locker rentals: If you own jewellery and don’t want to lose sleep over safekeeping it, banks offer discounts on locker rentals. For the first-year rentals, RBL Bank and Kotak Mahindra Bank offer discounts of 10 per cent and 35 per cent, respectively, to their women savings account holders. ICICI Bank’s Advantage Women Savings Account customers enjoy a 50 per cent discount on rentals in the first year. The Silver, Gold and Titanium variants of this savings account can fetch you an additional discount of 15-40 per cent on locker rentals, after the first year.

However, these variants have a higher requirement for monthly average balances (ranging from ₹25,000 to ₹1.25 lakh).

Cross-product offerings: These women-only savings accounts also include offers on other products such as demat accounts, children’s accounts, insurance and loans. While RBL Bank offers a free zero- balance kid’s account, Kotak Mahindra Bank offers a waiver on non-maintenance charges on a Junior Account, for customers of their women’s savings accounts.

Account holders of HDFC Bank’s women’s savings account get a waiver on annual maintenance and folio maintenance charges on their demat accounts, for the first year.

ICICI Bank’s customers can get iProtect Smart Life Cover along with their ICICI Bank Advantage Woman Savings Accounts, at discounted premium rates.

Preferential pricing on loans: The women’s special savings accounts also offer preferential pricing on loans and waivers on fees.

Opening an HDFC Bank women’s savings account can help you get a 2 per cent lower interest rate on two-wheeler loans and a 50 per cent discount on processing fees on the same. Other banks also offer preferential rates on home, car and personal loans, for their women’s savings account customers.

Standalone loan concessions

Aside from add-ons for their savings bank account customers, a few banks also offer concessions for women applicants in general. For instance, State Bank of India gives a 5 basis points (bps) concession for home loan (SBI Her Ghar) and car loans, by default, for all its women customers (one needn’t open any special savings account with SBI).

In the case of education loans, the bank offers a concession of 50 bps in the rate of interest for female applicants.

Bear in mind

While the list of add-on features may seem long and exciting, they sure need to be matched with the needs of today’s women.

For instance, discounts on locker rentals may be immaterial for women who now prefer to benefit from the appreciation in gold prices only from their ETF investments or from Sovereign Gold Bonds.

Similarly, the extra free ATM- withdrawals, too, may not be of use to everyone, given the rise of digital payments and the minuscule charges on ATM withdrawals (beyond the free limit). Also, how many women would actually sign up for the insurance policies offered at discounted premiums or shop till they drop just for more cashback or a few more reward points?

That said, the preferential pricing on loans and waivers on loan-processing fees, etc, might help you.

Consider critical illness plans

It goes without saying that a comprehensive health insurance is a must, irrespective of your gender, to meet emergency medical expenses.

However, while most health insurance policies cover major critical illnesses including diabetes, cardiovascular conditions and cancer, the coverage may not be sufficient, given the increasing cost of medical expenditure.

Also, cancer is the leading cause of death among women worldwide, according to WHO. In such times, critical illness policies can come in handy to reduce your financial burden.

In a critical illness policy, the sum insured (SI) is paid as a lump sum on diagnosis of the illness.

Here, there is no restriction on how you can use the insurance amount. Thus, you can use the money from the critical illness cover to pay non-medical expenses (that are not usually covered in a general health policy).

Further, standalone critical illness (CI) covers also provide for income losses or education of children in case the policyholder is unable to continue to work due to her ailments. This is over and above the benefit amount (SI) of the policy.

Women-specific policies

Insurers including Bajaj Allianz General Insurance, HDFC ERGO Health, ManipalCigna and Tata AIG offer critical illness products specific to women.

These critical illness products are offered either as a standalone cover or as a rider with a health cover. For instance, ManipalCigna’s Lifetime Health plan is a comprehensive health policy that offers a ‘Women+’ package as an optional cover to the base policy. In addition to a comprehensive cover, if you opt for this package, you can go for yearly screening for diseases includingbreast cancer, cervical cancer and ovarian cancer. You can also get gynaecologic, psychiatric and psychological consultations.

While standalone critical illness policies for women cover more or less the same illnesses, a few features are unique to each.

Consider Bajaj Allianz’s Women Specific Critical Illness Insurance, a standalone health plan which covers female-specific cancers, and provides a congenital disability benefit if the insured gives birth to a baby with a congenital health condition. In addition, the plan provides for children’s education and job loss (if the policyholder loses her job within three months from the date of diagnosis of the critical illness). But the policy doesn’t provide cover for surgeries and other critical illnesses.

HDFC ERGO’s my:health Women Suraksha is a comprehensive benefit policy that covers major critical illnesses. The plan provides cover for cancers — breast, cervix, fallopian tube, uterus, ovary and vagina. Additionally, it covers for other critical illnesses such as kidney and liver failure, Alzheimer’s disease and terminal illness. Certain surgical procedures and cardiac ailments, too, are covered under the plan.

Further, the product has optional covers for women, including for pregnancy, new-born complication, and post-diagnosis support such as second medical opinion and loss of job.

Tata AIG’s Wellsurance Woman plan (fixed-benefit product), in addition to covering 11 critical illnesses, provides daily hospital benefit for each day of hospitalisation. Similarly, the plan provides ICU benefit for each day the policy-holder is hospitalised in ICU.

Before you buy

While critical illness policies have their own benefits, here are a few things to keep in mind before you buy one.

One, you should already have an existing health policy that can take care of your other ailments/hospitalisation needs, if any.

CI policies cover only the listed ailments that usually include heart ailments and cancer; they will not cover minor ailments and regular hospitalisation. Two, considering the medical costs of major illnesses, ensure that the CI cover you take is sufficient.

Three, go for a comprehensive CI plan that covers maximum ailments and other benefits as you never know what may strike.

HDFC ERGO’s my: health Women Suraksha is a good choice here. The premium for a 30-year-old woman for a ₹10-lakh cover is ₹3,330 per year without tax. (If pregnancy complications and loss of job cover is included, it is ₹19,532 per year).

In the case of Bajaj Allianz’s product that covers major critical illness, the premium for a ₹10-lakh cover works out to ₹563 per year (excluding GST) for individuals aged 26-35.

Funding options for entrepreneurs

If you are all set to don the entrepreneurial hat, you may want to explore a few funding avenues for your venture. Taking a loan against property or gold jewellery is the top-of-the-mind option for many.

However, you must have — and be willing to offer — property or gold as collateral. There is obviously an interest cost also to be borne.

Many banks and NBFCs offer such loans at rates of 7.5-12 per cent.

Another alternative is unsecured business loans from banks and NBFCs, though these are even more expensive. Besides, many lenders offer loans only for businesses that have been around for at least a few years.

Business loans for women (and other targeted categories) offered by many banks, as part of certain government schemes, can be a good alternative. These are collateral-free loans for small businesses that enjoy relatively low interest rates and waiver on processing fees, in many cases.

However, the loan terms and conditions (except for requiring no collateral) vary across banks and require some hunting around for the best deal.

CGTMSE-guaranteed loans

If you want to set up a small business, you can go for a loan under the CGTMSE’s (Credit Guarantee Fund Trust for Micro and Small Enterprises) credit guarantee scheme that does not require you to furnish either a collateral or a third-party guarantee.

These loans are guaranteed by the CGTMSE up to a certain limit in case of default by the borrower.

Under the scheme, banks (public and private) and NBFCs can lend you up to ₹2 crore for a new or existing micro or small business.

The loan can be taken for manufacturing or services activities excluding educational institutions, training institutions, agriculture and self-help groups.

For example, you can get a loan for business such as a food-processing unit, mobile restaurant, library, health clinic and crèche for children.

You can use the loan for capital expenditure as well as working-capital needs.

Central Bank of India’s Cent Kalyani is one such scheme. The loan margin is 20 per cent. There is no processing fee. Loans up to ₹10 lakh come at an interest rate of MCLR (minimum lending rate) plus 0.25 per cent, and those above ₹10 lakh and up to ₹1 crore, at MCLR plus 0.5 per cent.

Under Union Bank of India’s (UBI) Nari Shakti, there is no processing charge, and the margin is 5 per cent for loans up to ₹10 lakh and 15 per cent for loans above that.

Borrowers with a reasonably good credit rating can get a loan at a rate of EBLR (minimum lending rate) of 6.8 per cent plus a spread of 1.15 per cent and 1.40 per cent, respectively, for micro and small enterprises.

PM MUDRA Yojana loans

The scheme was launched in April 2015 for providing loans of up to ₹10 lakh to non-corporate, non-farm micro and small enterprises.

While this is another option for women borrowers, the scheme is open to all, irrespective of one’s gender.

The Micro Units Development and Refinance Agency (MUDRA) provides refinance support to banks (public and private), NBFCs and micro finance institutions.

You can take a collateral-free loan for a manufacturing, trading or service activity such as a tiffin service, beauty parlour or garments business.

Based on the stage of development of the business and your funding requirement, you can go for the following loans — Shishu (up to ₹50,000), Kishore (above ₹ 50,000 and up to ₹ 5 lakh) or Tarun (above ₹ 5 lakh and to up to ₹10 lakh).

The loan can be used both for capital expenditure and working-capital needs. Many lenders such as HDFC Bank, ICICI Bank, Bank of Baroda and Canara Bank offer these loans.

Interest rates on MUDRA loans start at 7.30 per cent per annum, and these can be repaid over a period of 1-7 years, according to BankBazaar. Terms and conditions of these loans vary across banks. For instance, UCO Bank charges an interest rate of 7.45 per cent per annum (UCO float rate plus spread) and upwards. Bank of Baroda’s loans start at 9.65 per cent.

SBI specifies a margin requirement of 10 per cent for Kishore and Tarun loans and nil for Shishu loans. On the other hand, Canara Bank asks for no margin for loans up to ₹25, 000.

Both SBI and Canara Bank charge no processing fee for Shishu and Kishore loans. In terms of repayment period, a MUDRA loan taken from SBI has to be repaid within five years, while one taken from Bank of Baroda is available for a tenure of up to seven years.

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