Accounts with Overdraft Facility for Pensioners
Last Updated : April 28, 2018, 11:14 a.m.
Overdraft facility is a credit agreement with a financial institution which allows an account holder to use more money than they have in their account. Almost all banks offer overdraft facility to selected bank account types. The facility is widely used by people in financial emergencies such as sudden medical expenses or debt clearance. If your bank allows you to use this feature, it can really be helpful in times when there is a cash crunch or any urgency. The money has to be paid back to the bank within a month.
Talking about pensioners, there are certain banks that offer overdraft facility for pensioners if they withdraw their pension from the bank or have fixed deposit with the bank. In this article, we have brought in the features of overdraft facility specially designed for pensioners at some of the best banks.
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For what purposes is Overdraft facility?
As a pensioner, an individual has limited source of income. In case of an emergency such as hospitalization or medical expenses or debt settlement, a person has the option to avail overdraft facility . The money can be used for any legitimate purposes from the banks where the pensioner has his bank account. The facility can be availed against the pension account at the bank or Fixed Deposit only. It is thus a secured overdraft facility within the reach of only those pensioners (or their family) having either a pension account with the bank or a fixed deposit account. The type of account against which the facility can be availed varies from one bank to another.
Which Account Type Allows Overdraft Facility for Pensioners?
An individual has to submit a collateral in the form of asset to avail overdraft facility. The banks accept overdraft facility only if you can afford to provide any of these assets – house, insurance, policies, bank fixed deposit accounts, shares, bonds, etc.
What is the interest rate applicable?
The interest rate and overdraft sanctioned by the bank varies on each of the collateral. There are some banks where the rate of interest is applicable on the withdrawn amount and some banks would charge on the reducing balance basis.
Features of Overdraft Facility for Pensioners at Top Banks
Below are some of the banks that have overdraft facility for pensioners either in the form of savings account of Fixed Deposit. You may look at the eligibility required, repayment period and maximum withdrawal amount.
| S.No. | Banks | Eligibility | Repayment Period | Maximum Withdrawal Amount |
|---|---|---|---|---|
| 1 | State Bank of India (SBI) | Either a single or Joint account holder of SBI’s Term Deposit Receipt/Special Term Deposit Receipt | Up to 36 months | ₹5 crore |
| 2 | HDFC Bank | Resident Individuals Hindu Undivided Families Private and Public Limited Companies Senior Citizens or Retired Personnel (above 60 years of age) who are Resident Indians are eligible for the Senior Citizen rate on the Indian rupee fixed deposit. | Up to the maturity of FD | Up to 90% of FD |
| 3 | Central Bank of India | Pensioners / family pensioners drawing pension through our Bank Branches including Ex-staff | Up to 60 months | ₹10 Lakh |
| 4 | Indian Bank | Term Deposit Holder of the bank | Up to the maturity of FD | 90% of accrued value of deposit. |
| 5 | Syndicate Bank | Pensioners in receipt of regular monthly pension from Central / State Governments/Public sector Undertakings/ Units, Defence establishments and other government or quasi government institutions whose pensions are being routed through accounts held with our Bank. | Up to 72 months | ₹10 Lakh |
| 6 | UCO Bank | Fixed Deposit account holders at the bank | Up to the maturity of FD | 90% of accrued value of deposit |
| 7 | PNB | Pensioners who are drawing their pension from our branches provided the conduct of the account is satisfactory. | Overdraft is to be regularized from the pension payable for the next month | Up to the extent of one month net pension |
| 8 | Allahabad Bank | All state Govt., central Govt., teachers’ and our bank employee Pensioners whose monthly pensions are credited in the accounts maintained by them with our branches | Up to 48 months | |
| 9 | Dena Bank | Fixed Deposit account holders at the bank | Up to the maturity of FD | 90% of accrued value of deposit |
| 10 | Bank of Baroda | Savings Account holder Bank of Baroda staff pensioners | Up to a maximum of 2 months pension amount |
With the above list of banks and the overview of accounts providing overdraft facility for pensioners, we hope that either or any pensioner in your family would find it easier to avail the facility.