Secure your domestic help’s financial future

Domestic household helps are an indispensable part of the lives of most middle- and upper-class households today. Unlike employees in the organised sector, your domestic help does not enjoy any financial security. However, you can step forward and get her to invest in a few financial products designed especially for the financially weaker strata of the society and secure her financial future.

Chavi Guha, 32, from Ahmedabad, works for four households in Noida. She has three kids and earns around ~11,000 a month. However, this amount proves inadequate for her family's needs as her non-working alcoholic husband takes away most of the money she earns and squanders it on drinking and gambling. When one of her employers, Kiran Iyengar, got to know about her plight, she stopped paying her entire salary and opened a zero balance bank account for her, without the knowledge of her husband. Iyengar, along with Guha's other employers, have started paying a part of her salary in that bank account. This is helping Chavi accumulate a corpus for her children's schooling.

Thousands of household helps across the country are in a similar plight as Chavi. Besides opening a zero balance bank account, there are various other financial instruments, many of them offered by the government, that you can use to help your domestic workers.

Pradhan Mantri Jan Dhan Yojana: Under this scheme, one can open a zero balance savings bank account. This account is provided by both public and private sector banks. It comes with an accidental cover of ~100,000 and a life cover of ~30,000. The account holder is also provided a free RuPay debit card. To avail of a cheque book, the account

holder has to fulfil the minimum balance criterion. To open this savings bank account, your household help will need her voter card, Aadhaar card or PAN card.

Pradhan Mantri Suraksha Bima Yojana: This is an accidental insurance cover that provides accidental death and disability cover of ~200,000 for a year after which it has to be renewed. The premium rate for this cover is ~12 per annum. People with a bank account and aged between 18 and 70 years are eligible for this scheme. This plan does not cover suicide, but death due to murder is covered. Pradhan Mantri Jeevan Jyoti Bima Yojana: It is a pure term insurance that has to be renewed every year. Those between the age of 18 and 50 can avail of it. The sum assured for the policy is ~200,000. It comes with a premium rate of ~330 a year.

Rashtriya Swasthya Bima Yojana: The scheme provides cashless health insurance coverage to individuals and families that are below the poverty line (BPL). It provides hospitalisation cover for a family of five on floater basis for up to ~30,000. It covers pre-existing diseases from day one and can be bought at various enrolment stations set up by the government. The premium rate is ~30 per annum.

Sukanya Samriddhi Yojana: It is a small deposit scheme designed exclusively for the girl child. It can be opened after the birth of a girl child until she turns 10. A minimum deposit of ~1,000 and a maximum of ~150,000 can be made during a financial year. Currently it offers an interest rate of 8.1 per cent and comes with Section 80C benefit. This account can be opened in any post office or commercial bank. Contributions can be made to this scheme till the girl turns 21 years.

SIP in mutual fund: Investing a fixed sum every month in a mutual fund scheme for the long term is another option that you can explore for your domestic help. Investments in SIPs of mutual funds can be started with as little as ~100. Even ~100 a month, at 12 per cent per annum, will result in a saving of ~23,000 after 10 years. "As domestic helps are likely to have a low level of awareness about mutual funds, and their ability to take risk is also likely to be limited, you should opt for index funds for them," says Ashutosh Wakhare, founder, Money Bees Institute.

Atal Pension Yojana: By enrolling in this scheme, your household help can enjoy a monthly pension from the age of 60. The monthly pension can range from ~1,000 to ~5,000. The amount that has to be invested ranges from ~500 to ~3,500, depending on the person’s age. For instance, to avail of a monthly pension of ~1,000, an 18-year-old would have to pay around ~42 a month, whereas a 30-year-old would have to pay ~116 a month. The scheme requires contribution till the age of 60. One can enter the scheme till the age of 40. This scheme can be opted for from any bank.

If your domestic help is not aware of these plans, explain the benefits she can get by investing small amounts in them. “These schemes can help your household build a decent amount over the long term, and enable her to fulfil goals such as educating her children," says Deepesh Raghaw, founder, PersonalFinancePlan, a finance advisory firm. Only your initiative can help these unorganised sector workers secure their future.