Union Bank floats Wellness Deposit with 6.75% interest, Rs 5 lakh cover

Union Bank of India has introduced a new term deposit scheme called 'Union Wellness Deposit,' targeting retail customers with a unique blend of financial and health benefits. The scheme incorporates health insurance alongside its term deposit features, offering a comprehensive solution for wealth creation and health protection.

This innovative approach aims to attract a broad range of customers by addressing both their investment and healthcare needs. Available to residents aged 18 to 75, the scheme is open for both individual and joint accounts, though insurance coverage is limited to the primary account holder in joint setups.

The Union Wellness Deposit requires a minimum investment of Rs 10 lakh and can go up to Rs 3 crore. It comes with a fixed tenure of 375 days, during which depositors will earn an interest rate of 6.75% per annum. 

An additional 0.50% interest is provided for senior citizens. The scheme also allows for premature closure and loans against deposits, enhancing its flexibility. A distinctive feature of the scheme is the inclusion of a 375-day Super Top-up Health Insurance cover, which offers a sum insured of ₹5 lakh with cashless hospitalisation benefits. 

A. Manimekhalai, Managing Director and CEO of Union Bank of India, commented, “The launch of the Union Wellness Deposit reflects our ongoing commitment to delivering innovative and premium banking experience to our valued customers. As the first-of-its-kind offering, this product combines wealth creation with a range of health care benefits.” The scheme also provides lifestyle perks through the RuPay Select Debit Card, adding value to the deposit product. The initiative signifies the bank's strategy to enhance its service offerings by integrating health benefits with traditional financial products, setting a precedent in the banking sector. 

Union Bank's Q4 result

Union Bank of India posted a 50% increase in net profit to Rs 4,985 crore for the March quarter, compared to Rs 3,311 crore in the same quarter last year. Total income also saw an uptick, rising to Rs 33,254 crore from Rs 31,058 crore a year ago. While net interest income (NII) remained steady at Rs 9,514 crore, a growth in non-interest income to Rs 5,559 crore and a decrease in provisions to Rs 2,715 crore contributed to the improved profitability. The bank's net interest margin (NIM) for the quarter was reported at 2.91%.

Despite these positive results, Union Bank of India expressed concerns about potential pressure on NIMs due to anticipated rate cuts by the Reserve Bank of India. Additionally, the bank's loan growth for the fiscal year 2025 fell short of the target range of 11–13%, coming in at 8.62%. In light of the current economic uncertainties, the bank refrained from providing specific guidance on credit growth or NIMs for the upcoming fiscal year.

Operating expenses increased by 20% sequentially to Rs 7,373 crore, pushing the cost-to-income ratio to 48.91% from 45.14%, primarily due to HR-related expenditures.