Elmir Gabibullayev, Director of Retail Business Department of the International Bank of Azerbaijan OJSC (IBA), told about the new product “Pension deposit” for private pension savings.

According to Gabibullayev, this is an alternative to pension savings according to the system of compulsory state social insurance.

“Pension deposit” is an accumulation deposit for the period of minimum 15 years with the most flexible conditions advantageous for a depositor.

In accordance with the contract, the depositor is able to “retire” when he is 50 years old and the amount accumulated during 15 years is doubled.

For example, AZN 100 monthly payments will reach AZN 18,000 in 15 years. The Bank will add AZN 18,107 to this amount. As a result, when the deposit time is expired the client will receive AZN 36,107. If the deposit is made for 32 years (from 18 years until 50 years old) by the time expiration its amount will grow 5-fold. Amount accumulated by the depositor during 32 years will reach AZN 38,400 and amount added by the Bank to the deposit (in case of AZN 100 regular monthly payments the Bank will add AZN 408.2 to the sum) will reach AZN 156,745, therefore, the depositor will have AZN 195,145 as a result.

One more example: if the assets are accumulated during 45 years, that is during the whole period of life when a person is able to work (18 – 63 years old), the amount is increased 11-fold: AZN 553,693 are added to accumulated AZN 54,000 (in total AZN 607,693) i.e. the Bank will add AZN 1025.4 to AZN 100 monthly payment.

The “pension deposit” owner can also be provided with an accumulation plastic card that can be used for regular control of added amount and interest in IBA ATM. Such information can also be received by means of internet banking, mobile banking or IBA information center.

At that, the characteristic feature and advantage of such deposit against the traditional pension insurance system is that in case of the depositor’s death the savings together with the interest are demised in full amount.

Moreover, by the time of deposit expiration, the owner of the pension deposit can use it in three ways: to receive the whole amount at once or to receive “pension” during the whole life, in this case the depositor will receive dividends and the deposit itself will be demised. The third option is to receive monthly payments during the certain period of time. At that, interest will be added to the amount left at the account and as a result the initially deposited amount can increase 46-fold.

Undoubtedly, in case of violation of the contract on the “pension deposit” terms, the owner of the deposit will get the accumulated amount in full volume, at that the sum of interest may reach up to 75% of the full amount.

At the present moment there’s no product as flexible as this at the market of accumulation deposits in Azerbaijan. “Pension deposit” can be considered the most profitable deposit as it allows receiving maximum 200% of savings after termination of the contract in case of regular monthly payments.