"It's not always going to be sunshine — and your umbrella for that rain is your savings," said Arup Haider, Deputy Managing Director of City Bank. His metaphor speaks to a reality many in Bangladesh are now waking up to: retirement is no longer a distant concern, but an urgent planning priority.

As Bangladesh witnesses a demographic shift with an increasing elderly population, the conversation around savings and pensions has become more critical than ever. In response, the Government of Bangladesh introduced the Old Age Allowance (OAA) programme in the 1997–1998 fiscal year to support low-income senior citizens. As of the 2023–2024 fiscal year, the monthly allowance has increased to Tk 600 per person, benefiting approximately 5.8 million elderly individuals.

So, here is how Bangladesh is reimagining the financial security of its elderly.

A system long in need of reform

Traditionally, Bangladesh has relied on family-based elder care, but this safety net is rapidly weakening due to urban migration, shrinking family units, and economic pressures. While government officials and public sector employees receive structured pensions, this covers only a small portion of the elderly population.

In response, the Universal Pension Scheme has been launched.

Introduced in 2023, the Universal Pension Scheme aims to provide structured retirement support for everyone, including formal and informal sector workers. With modules like Probash, Progoti, Surakkha, and Samata, the scheme encourages citizens aged 18–50 to make monthly contributions and receive lifelong pension payouts after turning 60. Yet while promising, this programme's long-term success hinges on deep-rooted behavioural and institutional change.

Banks step up: New schemes, new mindsets

Banks are increasingly filling the pension gap with innovative savings products tailored for elderly customers.

Midland Bank: The family support model

Md Rashed Akter, Head of Retail Distribution at Midland Bank, emphasises a practical problem faced by retirees: "After retirement, if you do an FDR, you'll only get the money at maturity. But monthly expenses need to be met regularly. That's why we designed the Family Support Scheme — it allows people to earn monthly returns from a fixed deposit, helping them manage recurring costs."

Midland has also extended its savings tenure from three to up to 20 years for long-term planners. For first-time savers or low-income groups, the bank offers a Tk 250 DPS – a rare nano-savings model.

"Even if it's just 250 Taka for 20 years – that's how real savings growth happens," said Akter. "The most important thing is consistency."

Digital banking is further incentivised at Midland, where online customers earn 0.25 per cent more interest through schemes like Super Saver Plus.

City Bank: Lifecycle-based financial planning

City Bank's approach is rooted in understanding how savings needs evolve over time.

"Savings begin at your child's birth and shift as life progresses," shared Arup Haider. "By the time you retire, you're looking at financial stability, not risk."

City Bank offers fixed deposit options designed for retirees, with monthly interest payouts that help cover day-to-day expenses. Haider recalls cases where retirees deposited gratuity or provident fund payouts — sometimes up to Tk 1.5 crore — to generate steady monthly income.

On bank selection, he's clear: "For a difference of Tk 10,000 in interest, you don't want to risk Tk 5 lakh in a poorly rated bank. The principal must remain intact."

EBL: Banking with dignity

Eastern Bank Limited (EBL) takes a value-added approach, offering senior citizens premium services through its exclusive account.

"We provide Platinum Debit Cards, free insurance, and locker waivers for our elderly customers — without any extra cost," said Al Mamun Ansar, Head of Liability Business at EBL.

The bank's savings products — like EBL Confidence and EBL Millionaire — are structured for long-term returns. EBL Confidence, for instance, starts at Tk 500/month and can run for 10 years, making it accessible for entry-level earners.

But for elderly citizens who want a monthly income, EBL also offers fixed deposits that pay out interest each month — a crucial feature for retirees managing regular expenses.

"The return of your deposit is more important than the return on your deposit," emphasised Ansar. "That's what we prioritise."

Tackling the cultural hurdles

Despite these advances, a major barrier remains: mindset. "In our country, we spend bonuses and take credit card debt," said Akter of Midland Bank. "In contrast, in India, people are more disciplined about savings. We need to move toward a savings-first culture."

This gap is not only about education but also about habit. Many people still wait until their 50s to start thinking about retirement, when ideally, savings should begin in their 20s.

City Bank's Haider agrees: "If someone has a monthly income, they should go for a DPS. If they have a lump sum, fixed deposits make more sense. But the earlier you start, the better your options."

However, a promising shift is occurring in demographics.

"Five years ago, female depositors were 22 per cent of our total retail deposits. Now it's 30 per cent," said Haider. "Also, Gen Z isn't just spending — they're saving for goals, like buying an iPhone. These are early signs of planning behaviour."

At EBL, specialised women's savings accounts come with added benefits — including free insurance and fee waivers — making savings more attractive for women of all ages.

Rethinking savings for retirement: What you should know

When planning for retirement — either for yourself or for ageing parents and relatives — it's important to approach savings with strategy and foresight. The first principle is to start early. Even small monthly deposits, if made consistently, can grow substantially over time due to the power of compounding.

Diversifying your savings is equally important. A healthy financial plan might combine DPS (Deposit Pension Schemes), FDRs (Fixed Deposit Receipts), and insurance-linked products to balance security and returns.

It's also essential to choose your bank and savings products wisely — not just based on interest rates, but also on service quality, digital accessibility, and overall reliability. Liquidity should be a key consideration as well. Savings schemes that allow monthly interest payouts or flexible withdrawal options — without breaking the principal — are especially valuable during retirement.

Lastly, savings should always be tied to specific life goals, whether it's ensuring access to healthcare, paying for housing, or supporting grandchildren's education. With thoughtful planning, retirement can be a time of dignity, independence, and peace of mind.

The road ahead: From reactive to proactive

Bangladesh's financial sector is finally responding to the needs of its ageing population — not just with products, but with empathy. The shift from "save when you can" to "save with a plan" is redefining retirement.

Still, there's much work to be done. Financial literacy must deepen, digital platforms must be more accessible, and social norms around elder care must evolve to value autonomy over dependence.

Because ultimately, savings isn't just about money. As Akter put it: "It's about peace of mind. About knowing that when the working years end, life doesn't have to stop — it can begin again."