There's no doubt about it—women have it tough. Ramming into the glass ceiling at work, dealing with outdated customs at home, giving up a career to take care of the family… It's little wonder that financial planning for women is far more complex than it is for men. Despite this, it is only recently that financial institutions have started catering to this segment in a big way, launching smart financing schemes, add-on cards with specific discounts, entrepreneurship cells, etc. But are these products worth your time and money? We take a look.
An account tailor-made for women, claim the ads. In reality, one savings account is not too different from the others—no matter what the name. What sets these specials apart are the add-ons. For instance, a bank might offer a zero-balance account for a minor as an addition to a woman's account.
Other banks offer lower minimum balance requirement or lesser interest charges. Some banks may offer a free debit card or credit card, others charge an issuing fee of Rs 50-99. These cards usually come with specific advantages. Axis Bank's debit card, for instance, offers jewellery insurance up to Rs 50,000 and an enhanced accident insurance up to Rs 3 lakh.
Add-ons score when it comes to credit and debit cards. HDFC Bank's Easy Shop Woman's Advantage Card, for instance, offers a 50% discount on locker fees for one year, special rates on purchase of gold bars and a free bill payment service. Most women's cards offer discounts at various merchant establishments along with cash-back schemes on purchases. But don't take up these offers blindly. Check whether they are useful for you. It makes little sense to get an extra card for discounts on products you rarely buy.
Many banks are also creating special women entrepreneurship cells and banking units that offer smart financing schemes for women. Canara Bank has opened exclusive branches for women in various cities and has also established a Centre for Entrepreneurship Development for Women. The Bank of Maharashtra has relaxed norms on credit schemes for women, including lower interest rates, extended repayment periods, and lower margins. The Oriental Bank of Commerce, meanwhile, offers a 0.5% concession on loans to women.
The latest initiative is by the State Bank of Travancore, which has launched a savings deposit scheme for women with a minimum balance of Rs 250, as well as a loan scheme that offers a five-seven-year term loan/working capital up to Rs 25 lakh at an annual interest rate of 8% for the first year. Some banks also offer loans to women to buy gold bars and ornaments at rates which are lower than those for personal loans. Education loans for girls come with a 0.5-1% rebate.
Before you take any loan, however attractive it may seem, compare the processing and service charges, interest rates and repayment terms against those for loans offered to the general public.
Women are moving away from being dependants to having people depend on their earnings. So, they too need insurance. Instead of exculsive products, insurers offer riders specifically for women. Apart from covering critical illnesses, these riders offer benefits on reconstructive surgery and complications of pregnancy. "Most of these are genuine problems for women and may not be congenital," says Akshay Mehrotra, head, marketing, Bajaj Allianz Life. The company has now bundled its existing insurance products under the ‘Miss Confident Plan'. Although the plans are old, there are new benefits attached, including on-the-spot assistance for lady drivers. There's also LIC's Jeevan Bharati 1, a money-back plan for women with optional riders like accident benefit and critical illness benefit covering breast and cervical cancer.
However, don't buy a plan because it costs less and ensure that the riders do not overlap with the existing covers. Most importantly, don't treat the rider as a substitute for a medical cover.
The government is also taking steps to provide benefits for women, including the launch of the Trade-Related Entrepreneurship Assistance & Development scheme. Then there's the higher income-tax exemption limit (Rs 1.8 lakh against Rs 1.5 lakh for men). Some states offer a 2% stamp duty concession for registration of property worth up to Rs 10 lakh.
Of course, things are far from ideal, but it's a good start to ensure that women benefit from their earnings as much as men do. After all, it's a woman's world as well.
Just For Her
We examine some of the financial products targeted at women
|ABN Amro Bank | Shakti Savings Account|
Minimum balance is Rs 5,000 and you get a free credit card.
|HDFC Bank | Easy Shop Woman's Advantage Debit Card|
Re 1 cash back on every Rs 200 spent, 50% discount on locker fees for one year, discount on gold bars and free bill payment.
|Oriental Bank of Commerce | Orient Mahila Vikas Yojana|
Term/working capital loan up to Rs 10 lakh, 0.5% processing fee and interest rate fixed at PLR for SMEs (up to 10.75%).
|Bajaj Allianz | Rider-Mahila Gain|
Benefits on reconstructive surgery after mastectomy, congenital disability and complications of pregnancy.
|ICICI Bank | Advantage Woman Savings Account|
Minimum balance is Rs 10,000. Daily spending limit is Rs 25,000.
|HDFC Bank | Woman' Gold Credit Card|
5% cash back on monthly bills and one reward point for every Rs 150 spent.
|Bank of India | Star Mahila Gold Loan Scheme|
Processing fee is 1.1% and an interest rate concession of 1.75%.
|Birla Sun Life | Woman's Rider|
Covers pregnancy complications and congenital abnormalities in newborns.
|AXIS Bank | Smart Privilege|
Minimum balance is Rs 10,000. You also get a zero-balance minor account, jewellery insurance cover with debit card, and insurance cover.
|Citibank | Woman's Visa Silver Card|
Free card for life, free additional card, one reward point for every Rs 200 spent and discounts at various merchant establishments.
|Canara Bank | Can Mahila|
Personal loan for purchase of household articles, gold, etc.
|LIC | Jeevan Bharati 1-Money-back Policy|
Cover extends to breast, ovarian and cervical cancer.