Social bank accounts and deposits now accessible to low-income individuals

‘Today, every individual should have the opportunity to create a safety cushion in case of emergencies. By using social bank accounts and deposits, low-income individuals will be able to make savings on the most favourable terms and to use deposit income to pay for everyday needs. Recipients of social benefits constitute the most vulnerable group and should be entitled to the best protection. Therefore, we will be closely monitoring the way banks provide these services. Importantly, the procedure to obtain the services should be as simple and convenient as possible for all recipients of benefits, irrespective of their age, location and ability to use mobile applications’, said Mikhail Mamuta, Head of the Service for Consumer Protection and Financial Inclusion of the Bank of Russia.

Individuals will be able to open social deposits for one year with the option to extend them. The relevant interest rates will be the highest of those offered by specific banks for deposits for a period from one month to one year. However, the amount of deposited funds should not exceed ₽50,000.

Individuals will be able to top up their deposits at any time and, if need be, withdraw funds from them without the interest rate being reduced. Income will accrue and will be paid monthly.

The interest rate of the social bank account, at which interest accrues on the account balance not exceeding ₽50,000, shall not be less than half the Bank of Russia key rate. There are no limitations on the account amount, but the balance exceeding ₽50,000 will accrue interest under the bank’s terms. Interest can be withdrawn every month. The servicing of such accounts as well as transfers and payments worth no more than ₽20,000 per month to any recipients will be free of charge.

Social bank account and deposit agreements can only be concluded via the Public Services Portal containing all information about recipients of social benefits. Moreover, eligible individuals will not have to submit any documents or certificates; they will only need to file an application. Everything else will be done automatically.

Now, these products are offered by major banks. The list of banks will be gradually extended.