Pension Account: Key features and how to convert savings account to pension account

Pension accounts are those accounts in which the retired persons receive their pension amounts. Pensioners need a dedicated account for their pension amounts to be credited and they can use an existing savings account for this purpose.

What is a pension account?

On retirement, the employees can convert their salary account or savings account to a pension account in which they can receive their monthly pension. The pensioners can also even open a new account for receiving their monthly pension.

When a state or Central government employee retires, they receive retirement benefits and a monthly pension in the account they specify.

Converting an existing savings account into a pension account eliminates the need to maintain several accounts. If a retired person already has a savings account with a bank, they are not required to open a second pension account with the same bank. The pension can be credited to the existing  savings account each month.

How to convert savings account to a pension account?

A savings account can be converted to a pension account with a few simple steps. The conversion of a savings bank account to a pension account should be chosen because it is a simple process for both the bank and the pensioner.

For account conversion, banks follow a quite convenient process. The account holders can submit a request at their home branch to convert the existing account to a pension account.

For converting into a pension account, the pensioners may need to submit a few supporting documents like Pension Payment Order (PPO) along with the application. The account holder should complete the KYC verification.

Opening Pension Account: Documents Required

- Two recent passport size photographs

- Identity and address proof documents.

- A single photo copy of the document listed under both address and identity proof like Passport or Aadhaar Card. 

- It is mandatory to provide address proof documentation for both (mailing and permanent addresses) if they differ.