What is a two wheeler loan and how to apply it?

Two wheeler loans are those that can be borrowed from the banks or financial institutions in order to procure a two wheeler vehicle. Such a loan can be available by people only when one wants to buy a two wheeler vehicle for personal usage. These loans are easy to get with flexible and fixed interest rates which again might vary from one bank to another depending on the base rate of these banks . The repayment starts once the loan is disbursed which happens in around a week from the loan sanction date.

The main benefits of two wheeler loan is that they are affordable, they have a speedy approval procedure and are often times convenient  and hassle free. Some banks give out special discounts to those who have their accounts in the bank the loan is taken from.

The repayment options are variable and may range fr5om 1 to 4 years and sometimes these are even available at the point of purchase. The repayment can be done through post dated cheques, standing instructions and easy EMI’s.

You have to either be a salaried individual or own a self-business , the age criteria varies from bank to bank. Sometimes there is a clause with banks that the borrower has to be working for at least one year.

For the loan the documents required are your

Proof of identity: Any one of the passport copy / a photo credit card- front and reverse/ voters ID card/ Driving license/Pan card / Copy of company ID/Ration card

Address proof: Any one of the Passport copy a photo credit card- front and reverse/ voters ID card/ Driving license/Pan card / Sale deed/ property purchase agreement/ credit card billing statement (latest)LIC policy/ Letter of company or company provided accommodation/ Address proof in the same name of the applicant’s spouse or parent’s name is acceptable.

Income proof – for salaried individuals: latest salary slip for government employees; if salary slip isn’t available only salary certificate is accepted with deductions.  For Partnership/ Proprietary firms & Pvt. Ltd. Co's- Salary Certificate to be accepted with the following mitigants: Salary Certificate to clearly state the deductions, Name & Designation of the authorised signatory.

For Self-Employed: Copy of the latest I. T. return.

What are the interest rates and charges for the loan

The loan processing fees are maximum 3% of the loan amount, the documentation charges are maximum 3% of the loan amount. There are prepayment charges as well that vary from every bank, in case of late payment of the EMI the banks also charge late fee penalty that varies from bank to bank. Inc as the cheque bounces there is again a penalty to be paid but these charges vary from bank to bank.

What is a recurring deposit calculator and how to use it?

Recurring deposits are the mostly procured investment schemes in India. A recurring deposit is very popular amongst the salaried class people because it is affordable and easy to procure and art the same time it also doesn’t require a huge deposit amount.  And most of the banks in India irrespective of being private or public offer recurring deposit accounts.

And at name suggests, a recurring deposit calculator is utilised in order to get the maturity value of the recurring deposit. With the help of a simple formula the interest on a recurring deposit account can be calculated obviously with the help of a recurring deposit calculator. Having said  that there are some very important things that the customer should pay attention to before he/she calculated the interest.

Customers must be sure to take each month’s installment as a separate deposit and that compounding takes place at the very end of a financial quarter and not at the end of every month.  A different amount of interest will be earned at the end of every month. The amount that one gets during the maturity of the recurring deposit is the total of the enhanced value or every month’s deposit.

What is the formula for calculating the recurring deposit?

The compound interest on the recurring deposit amount is added only one the first quarter is completed. This si how the financial quarter in a year is determined:

April to June is the first quarter

July to September is the second quarter

October to December is the third quarter

January to March is the fourth quarter

Compounding happens after every quarter which is why until then a simple interest calculation will take place . This si the simple interest formula

I = Prt

I means interest

P means principal

R means annual rate of interest applicable

T is te tenure of the time period of the scheme

He below is the formula given by the Indian banks association to calculate recurring deposit it ne4rest

M=R [(1+i) n-1]

1-(1+i)-?

Where M means Maturity value

R means monthly installment

I means rate of interest divided by 400

And n means number of quarters

Therefore with the above formula if a person deposits Rs 1000 in January, using simple and compound interest formulas he/she will have Rs 12,801.90 as maturity amount at the year end at 12% rate of interest.

How do you calculate compound interest on a recurring deposit?

As has been already mentioned, compound interest  is calculated in every quarter and then is added up to the final amount that the customer gets, the formula is:

A = P (1 + r/n) ^ nt
A is the final amount procured
P is the principal amount
R is yearly interest rate
N is the number of times the interest has been compounded each year
T is the tenure of the recurring deposit scheme

Types of life Insurance policies

Here are the types of life insurance policies. Every single life insurance plan and policy is built around these basic insurance policies and permutations and combinations of these.

Term insurance policy

This is now available as E-term life insurance policy is a complete risk cover policy that covers anyone who is insured for a specific time period. In this the sum that is assured is paid off to the beneficiaries or the family members if in case the policy holder dies within the policy term. For example, if in case a person makes a term life insurance policy of Rs 20 lakhs for a period of 10 years and he expires within that period, the money assured i.e. the entire Rs 20 lakhs is given to his family and if he survives, the premium paid isn’t returned. The only advantage is that the premiums paid are tax-free and just because this insurance is meant to provide a 100 percent risk covers the premiums too are very low  and these insurance plans don't  have any additional or hidden charges.

Whole life insurance policy

A whole life policy covers the policyholders against death, throughout his/her life term. The validity of this kind of life insurance policy is undefined and therefore the life cover is cherished by the individual through his/her life. In this kind of insurance policy anyone who holds a whole life insurance policy pays the premiums and on his death the entire corpus is paid to the family. Until any untoward event happens in the life of the individual the policy does not expire and what’s more the premiums that are paid towards the policy are exempted from tax.

Endowment policy

The most sought after life insurance policies that are available in the market. When a person purchases an endowment life insurance policy, they benefit in two ways. The beneficiary gets the sum assured in case of death of the policyholder during the tenure of the plan and in case the policy holder survives the tenure of the endowment policy plan the premiums that he paid for the policy are given back to him with other investment returns and benefits more like a bonus. Along with the normal endowment policy there are other options like marriage endowment and education endowment  plans as well.

Money back policies

This is another favourite life insurance policy for the main reason that this policy gives  periodic payments during the term of the policy. Actually, the amounts that are paid during the periodic intervals are the portion of the sum assured. If the policy holder survives the term, he gets the balance sum assured. The beneficiaries receive the entire sum assured in case the policyholder dies during the term. The premiums paid for this money back life insurance too is exempted from tax.

What are the basic types of insurance policies available to us?

Term insurance:

These are the most elementary form of life insurance. Term insurances provide life cover with no savings or profit component. The term insurance plan is the cheapest of all other insurance plans out there because the insurance premiums too are very cheap when compared to the other kinds of insurances out in the market. The lower insurance premiums are because of the pure life coer that are given by the online term insurances. The fixed sum that is assured is given to the beneficiaries if the policy holder expires during the policy term however if the death of the insurance policy holder doesn’t happen, no money is given to the beneficiaries.

Endowment plans

The endowment plans are very different from the term insurance particularly in the maturity benefit aspect. Term plan pays out the maturity amount along with profits earned only on the occasssion of the death pf the insurance policy holder and Endowment plans pay put the sum insured in the case of the survival or the death of the policy holder. While this definitely can be taken as a benefit, the down idea of it is that these endowment plans have a greater premium, higher fees and expenses. The profits are the premiums that we invested in the asset markets as equities and debts.

Unit link insurance plans

The unit link insurance plan is a little tweak on the conventional term insurance, they pay out the assured sum or the investment portfolio only if it is higher on maturity. The performance of the unit link insurance plans are linked to the markets. The insurance policy holders can select the allocation to the stock and debts. The value of the investment portfolio happens through the net asset value.

Whole life policy

Such types of insurance policy covers the insurance holder’s whole life. The main benefit of the whole life insurance policy as the name suggest is that the value of the cover is undefined and therefore the benefit of the insurance is enjoyed by the insurance policy holder for his entire life. The policy holder pays premiums until his death and on the occasion of his death the corpus is paid to his beneficiaries or his family. The expiration of the policy happens only in case of an eventuality because there is no pre-defined tenure of the policy.

Money back policy

This kind of insurance policy is a variant of the endowment policy. It gives out periodic payment over the entire term of the policy. A part of the assured sum is paid out at regular intervals. If the policy holder lives through out the, he is entitled to the balance sum assured, in the occasion of the death of the policy holder the beneficiary gets the complete sum assured.

Do you know what a two wheeler loan EMI calculator is?

India has the highest numbers of two wheeler in the world! Yes, it is a fact! The reason behind this is the economics and the logistics of the country. For the most of the citizens of the country the most convenient way of travelling is a scooter or a bike. Biking has become a huge business in the nation. In the last few years the nation saw the advent of many international bike brands in the country. There are so many that it is no almost a clutter and one doesn’t know which one to pick. There are so many choices on the platter that it becomes difficult to pick one. However not everyone has the finance to independently own one and hence it makes absolute sense to go in for a loan and own a two wheeler for yourself. Today almost all banks of the country offer two wheeler loans.

However before picking up a bank for a two wheeler loan, it is better to weigh the pros and cons of a particular lender. Because of the rise in the trend of online banking g today picking one lender who has good financial terms is not a difficult task. Banking has become far more convenient and easy and decisions are on a roll. The banking procedures have become extremely transparent.  And for a lot more convenience and ease, some of the bank websites and other financial institutional websites offer the option of a Two wheeler loan EMI calculator in which you can actually calculate how much EMI you have to pay on the loan amount that has been sanctioned for your two-wheeler.

Did you know what an Two wheeler EMI calculator is?

The two wheeler loan EMI calculator is an online tool that is made to calculate the EMI amount that has to be paid by you on the loan amount that has been sanctioned to you for your two-wheeler.  You require to put in the details of your loan and post which you will see the monthly EMI that has to be paid by you on loan amount.

It doesn’t just end there, along with that  you will also get a lot of additional information that will help you zero in on the most appropriate terms. Then once you know the EMI you have to pay every month, it will be easy for you to fix your budget keeping that in mind as well.

Some of the main upper hand of using a two wheeler EMI calculator

Using an two wheeler EMI calculator lets you know the EMI value, it helps you know more about the terms and choose the best suited for you, it also helps you in comparing the rates of other Two wheeler loans that are being provided by other banks or other financial institutions, it helps you in negotiation of the rates of interest, it also provides a break up of costs involved int eh loan such as the charges and the processing fees, it also provides the EMI amortization table  that provides a monthly break up of the principal amount and the interest charges levied.

Three main types of bank loans available in India

There are multifarious loans that are available for people in India. From buying houses to setting up a personal business all can be done wit the aid of loans that are available in the market today.

Let us have a look at the different kinds of loans that are available today

Home loans: home loans are availed by people who want to buy homes or make any construction or perhaps renovation and extension of their houses, apartments or flats. They can also be made use of while trying to procure land or payment of stamp duties. The home loans available in India have fixed and at times adjustable rate of Interest and the payment terms are fixed and adjustable too. There are various kinds of home loans as well. They are well categorised into the following groups.

1. Home purchase loans
2. Home construction loan
3. Land purchase loans
4. Home extension loan
5. Home renovation loan
6. Loan against property
7. NRI home loan

Personal loan

The individual who wants to procure a personal loan from a bank or a financial institution has to first get his credentials verified, his credit ratings are then checked. All of this is done based on the profession they are in and what is the source of their income and whether they have a regular income or not. The personal loan can be utilised for any personal purpose. It might be used for a wedding, personal expenditure, vacation spends so on and so forth. The personal loan requires no collateral and security. This is another reason why the interest rates of the personal loans are pretty high because of the stakes. The loan processing fees amounts to two percent of the total loan amount. The disbursement takes about a week from the date of the application of the personal loan and the interest starts off only when the disbursement of the loan has been done.

Educational loan

Education loan

Educational loans are mostly utilised by students in order to fund their education. This loan is generally availed for higher education. This loan helps the students with their fees of the institution that includes, examination and library fees;travel expenses for abroad, costs of books and equipment that are required. This loan also includes any insurance for the student. The loan also includes additional expenses of thesis, project work, educational tours so on and so forth. The terms of the educational loans are different with different banks. For studying in India Rs 10 lakh is the average and for studying abroad Rs 20 lakh is the average. For an amount of around Rs 4 lakh the parents should be the joint borrowers and for an amount that is above that a tangible asset security is required.  The repayment begins between six months and two years of the completion of the course.

Car loan

It is much easier to avail a car or a vehicle loan when compared to the other loans in the market They involve lesser paperwork and around a week’s time to be processed and getting the clearance.  The interest rates vary from various banks and that depends on their base rate,. Repayment is the same old EMI’s and it also has early repayment options.

Did you know these four facts about inactive savings bank accounts?

This comes to pass exactly during your no bank transaction period that extends for more than 12 months. When there is no transaction done in the bank account, the account automatically changes into an inactive account. The bank then waits for another period of twelve months for the customer to begin another transaction on the same savings bank account that have already been classified as inactive, but still if the customer fails to make a transaction on the account, the bank account then becomes dormant.

One thing worth noting is that the word ‘transaction’ in the banking lingo pertains to any business dealing that has been started by the bank account holder or the bank customer these transactions might be a debit card transaction, a money deposit transaction or a cash withdrawal transaction or internet banking. However the transactions that are initiated by the banks for instance, if any extra charge or fee is levied on your savings bank account, they are not taken into consideration while categorising your account into an inactive or dormant account. But this doesn’t mean that in a fixed deposit account any amount of credit that is earned by the customer is not regarded, it is and also lets you keep your bank account active.

What is the main reason behind banks to categories saving bank accounts into dormant or inactive ones?

With the amount of fraud and fraudsters increasing everyday,the banks too, wants to do away with the risks of any untoward happening in your savings bank account. Once they categories the account as inactive or dormant, the banks alert their staff about a likely contigency that might materialise with your savings bank account and before any fresh transactions can happen in the same bank accounts, they make sure that a thorough diligence check is done.

There are limitations on inactive and dormant accounts – What are they?

There are various limitations put by the banks on inactive or dormant accounts and yet these limitations differ in every individual bank. There are some banks who put a lot of check on phone banking and internet banking as well, there are some banks that put a lot of constraints on cheque transactions as well. An example would be HDFC bank. It bars internet transactions, ATM or Debit card transactions and phone banking as well on dormant saving accounts. HSBC being a global bank, in India it doesn’t allow internet banking, phone banking, issuing and renewal of ATM or Debit card, cheque book requests, cheque transactions, request to change the address and telephone numbers so on and so forth.

Did you want to know the procedure to reactivate your dormant or inactive bank account?

It is a cakewalk! To activate your inactive savings bank account, you just have to make a cash deposit in your bank account. To reactivate a dormant account you have to submit a written request to the bank branch and its authorities. Please keep in mind that the bank cannot levy any charges on you to reactivate your savings account.

All you need to know about personal loans

There are a number of loans that you can avail from a bank, personal loans are one such loans. Such loans are not meant for any specific purpose, you can use the loan amount for any purpose you want to. Sometimes it is very difficult to get a personal loan and require many supportive documents. Lets dig deep into what personal loans actually are:

They are unsecured loans

Unsecured loans implies that you don’t need to use an asset as a collateral for the loan. In case the repayment of the loan by you isn’t done, the bank cannot automatically take a part of your property as the payment. However the bank can definitely resort to other actions even if it cannot take your property or car for that matter. A lawsuit can be filed against you by them, they could hire a collection agency to collect the loan and interest amount from you, they could report you to the credit agencies as well.

The rate of interest in such loans aren’t flexible.

Once the loan is taken a particular rate of interest will be quoted by the financial institution lending you the amount. This rate will not be flexible, once it is decided upon, it will remain the same for the entire tenure of the loan.

The repayment period of personal loans are fixed

When you take a loan, it is up to you to set the time period through which you are going to completely repay the loan without any outstanding. This tenure may range from 1 year to around 5 years. But in case you are unable to complete the loan repayment in the number of years stated in your loan agreement, the lending institution can always charge extra fees on your interest amount. Always keep in mind that if the loan amount repayment period is long, yu always end up paying more to the bank.

Such loans can affect your credit score

Most financial institutions that are lending you the money inform the credit agencies about your loan and the amount you have borrowed. This means that everything that pertains to your loan and the repayment and the interest rate and how timely are you in making the repayment are all informed to the credit agencies and this makes up for your credit score. If you repay your loans without any hitches and delays and if you are not a defaulter in repaying your loans you have a good credit score, however, if you delay in repaying the loans and the interest amount is not paid by you regularly, you end up having a bad credit score. Therefore it is always sensible to maintain a good credit score by properly and timely repaying the loans you have taken.

Four important Personal Loan facts you need to know before you apply for one.

A lot of people in today’s day and age are opting for a personal loan for purchasing things that are costly. They also are frequently turning their monthly purchases into Easy EMI’s or equated monthly installments. If people experience any monetary constraints while buying a house or renovating a house for that matter or pitching in some money for the higher education of their children or perhaps having little or no funds during medical exigencies.

These are a few personal loan facts that will help you to know them better.

The first and foremost aspect about a personal loan is that unlike a car loan or a home loan, a personal loan doesn’t require any security. Therefore if you want the personal loan against your property or gold, that is not possible! This makes the rate of interest for the personal loans too high because of the risk involved while getting them sanctioned. If in case you end up being a defaulter in the repayment of your personal loan, it will reflect in your credit score and in future if you want to apply for a credit card, you won’t get one because of your low credit score.

What are the criteria for eligibility for a personal loan?

The eligibility criteria depend on the bank and different banks and different criteria. The main factors that influence your eligibility is your age, income, capacity to repay, loan, occupation and place of residence.  You have to be a salaried individual, or a businessperson. The credit history of the individual too influences the eligibility criteria.

What is the minimum loan amount?

The minimum loan amount too varies from one bank to another, however most banks have set a minimum limit to their personal loan

And that would be Rs 30,000

What would be the maximum loan amount on the bank personal loans?

The maximum amount for a personal loan differs from one bank to another, however before a final limit is set on your loan amount there are some aspects that are deliberated on.  A high credit score makes one eligible for a greater loan amount. Other than that a higher monthly income, your ability to repay the amount so on and so forth are all responsible in fixing the maximum personal loan amount.

What is the maximum loan time that I can take to dispose off the loan?

This is a big question that every borrower has in his/her mind. However the answer to this is pretty simple. The loan duration might be from one to five years. In case you want to know what is the Emi you have time calculate pay over the period of time you have chosen to dispose of your -personal loan there are countless EMI calculators that lets you see what is the EMI amount you need to pay every month.

How much time does it take for the banks to disburse the loan amount?

After the eligibility process is over and you have also checked your personal loan eligibility and things are finalised, the paper work id some and now all you wait for is to get the amount disbursed from the bank, it almost takes a week’s time from the loan application date to get the amount disbursed.

How is internet banking and mobile banking beneficial to one and all

Internet banking is also called mobile banking or online net banking. It is an electronic payment system that allows the customers of a bank or other financial institution to carry out a number of banking transactions. When doing internet banking the banking system available online will automatically connect to the central banking system and are able to access banking systems.

The first and foremost thing that a customer would require to access internet banking will require a computer with a working internet connection. Once that is established he/she has to register with the website of the bank in which his/her account is and that has to be done by a username and password and other credentials for customer verification purposes. The verification procedures are not at all similar to the verification procedure done on the telephone.

The banks provide a unique customer identification number to a customer which he or she can use in order to access the internet banking. The services that can be accessed via internet banking includes, fund transfers to other bank account and other financial institutions, keeping a track of the number of accounts in the bank and obtaining account summaries and transaction details, credit card payments, utility bill payments, opening a fixed deposit account downloading of bank account statements. The ,kind and amount of services that a particular bank allows through internet banking varies from every bank while the above services are quite common for internet banking facilities in almost all banks some banks might additionally let a customer to order a chequebook, change a telephone number or address, stop payment on a cheque and report loss of credit card.

Internet banking has been developed in order for the customer to enjoy the convenience of banking at his/her fingertips instead of having to visit the bank branch and wait for one’s turn in long queues. Nowadays the world has become a busy place and it is not feasible for anyone for that matter to be stand in long queues in banks in order to deposit a cheque for transfer of funds to another account or put a request for an account statement. With the advent of internet banking, all of these meagre works has become simple. Nowadays one can access every detail of one’s bank account in the comfort of one’s own home and all he ’she would require is the internet.

With internet banking a customer has a permanent access to his/her bank account, the transaction costs are less and less worrisome, one can access internet banking from anywhere, the time taken to do a banking procedure is reduced. One doesn’t have to be bothered about the security of these transactions as they are very secure and no personal information or password is divulged anywhere. The transfer of funds from one bank account to another is done safely, accurately and immediately and needless to mention internet banking allows security of the bank account as well.

Did you know the most common 4 methods of international money transfer?

There are various alternatives available to transfer money to India. However, it is mandatory to research about it ever more and make sure you choose the best while you send your money.

Online Transfer

This is the simplest method for an international money transfer. To do this all one requires is an internet connection and you also should be using the local banking services to send the money to an Indian account. Some other important things that you will be requiring to do this successfully are the account holder’s address and obviously his/her name, the name of the bank of the recipient, the IFSC code and the branch address to which the money will be sent. You will also need the IBAN or SWIFT code of the bank the money is being sent to. This method is mostly suggested if you regularly transfer funds. You can get rid of the steep banking charges and you can also carry out the transaction from the comfort of your home.

ACH transfer

Automated clearing house is another way of international money transfer and is used for transferring money from an Indian account to an account in the US.  A huge advantage of such a method to transfer money is, you can get rid of long bank queues, you will not have to worry about hidden costs, you will also not be required to send checks for the money transfer to materialise. When the money is transferred in this manner, the bank gets the sum that has been sent in the next four working days. This amount can be delivered to the payee on the next day.

Paypal transfers

Another method of electronic money transfer from one account to another throughout the world. Paypal money transfers can also be cloaked as an online money transfer method. While sending the money through paypal be sure that you won’t be charged a penny, however, the one who recieves the sum will be asked to pay a nominal charge of 3.9% on every international money transaction along with the exchange rate of the transfer.


Wire Transfer

One of the most commonplace methods of transferring money internationally is the Wire Transfer method. This method requires the sender to visit a financial institution or a bank or bureaus that cater to international money transfer, for instance Global Exchange, book my Forex,  Western Union, Remit2India, and transfer the money. This wire transfer international money transfer service first takes all the required details about the person or persons the money is being sent to from the person sending the money, the sender is also supposed to divulge the bank details of the money recipient. One those facts are collated, the bureau then starts the transfer procedure which takes the next few days to complete.

Do you know what is Private banking?

This kind of banking is conventionally offered to a bank’s high net worth  individual (HNWI) clients. It is a personalised financial and banking service. This is typically done for wealth Management because the High net worth individual clients have accumulated more wealth than a normal average person and therefore they have the means to access a more diverse and large variety of conventional and alternative investments. Private banks have thus come up with private banking in order to match  such individuals with options that suit them better.

Private banking doesn’t just provide excellent  and exclusive investment advice, it goes much further and addresses a client’s entire financial situation. These services include helping the clients with special financial solutions, protecting and growing assets in the present, retirement planning and passing wealth on to future generations.

Some exclusive private banks accepts clients with at least $500,000  worth of investable assets.  This is because such a high level of wealth lets the clients to be a part of alternative investment methods such as hedge funds and real estate.And a person who has this level of wealth will never have any liquidity problems. Morgan Stanley, Merill Lynch, Credit Suisse, UBS are examples of private banks.

Personalised service

The customers of a private bank receive exclusive personalised service. A relationship manager is assigned to every account holder to deliver a tailor made customised  asset management plan. This is why the customers can also directly liaise with the management officials if ever the need arises.

High net worth individuals typically get services at a huge discount in private banks because of their huge assets. For exchange customers who have export business might receive a reduced foreign exchange rate. They are provided with a lot better investment options by the private banks, investments with returns that  outperform the market.

Challenges with a private bank

The private banks have always dealt with a lot of regulatory environment since the GFC or the Global financial crisis in the year 2008. This is why there is a higher level of transparency and accountability. The licensing requirements for the private banking professionals are hugely stringent and ultimately this benefits the customers because it assures them that they are getting the best advices with regards to their money and assets!

Since the Global financial Crisis happened the private banks have experienced a high employee turnover which finally resulted in  need to focus on talent recruitment. A long-standing customer relationship is mandatory for the success of a private bank which is why there is a need to keep the employees satisfied as well so that a higher level of customer satisfaction can be achieved. Because only if the employees are happy will they do their work better and it will thus bring success to the company!

Do you know what is a recurring deposit account?

It is a savings avenue and it is very similar to the mutual fund’s systematic investment plan or SIP. Its a recurring deposit a particular amount of money is deducted every month from your bank account. In order to have a functioning recurring deposit, the very first thing you require to do is to apply for a recurring deposit account and request the bank to deduct the amount you wish to be deducted from either your savings or current bank account every month. Almost all banks offer the facility of internet banking through which your deposit can be deducted as well. What’s more the deposit can start from as little as Rs 5 and Rs 500 with private sector and private sector banks respectively. The investment time ranges from a minimum of 6 months to a maximum period of 10 years.

How do you calculate the interest?

It is absolutely the same, just like in bank fixed deposits. As of now ICICI bank which is a private sector bank is giving up to 7.5 percent interest for a period of one year and SBI which is a national public sector bank offers 7.75 percent for a deposit period of one year. However the senior citizens are entitled to an extra 0.5% interest .

Can you withdraw the amount before the maturity time?

Yu surely can do it. However the interest paid will be lower than the base rate for the time the deposit has been with the bank. Some banks have a penal interest of 1–2 %. Having said that it is always sensible to know that a recurring deposit account has a lock-in period of one year and if you want to withdraw the amount in less than a month’s time, you will not get any interest.

What if you are a defaulter?
If in case you end up being a defaulter which means you have missed paying your installments for one to 6 months, the bank is entitled to discontinue your account. However you can very well get the account back when you pay the outstanding amount within a month from the date on which you defaulted.

Are there any other benefits?
Yes! The main benefit is that you can also take a loan or a avail an overdraft facility up to 90% against the ¬required amount . this is surely a better option during an emergency instead of withdrawing your fixed deposit because that will continue to earn interest and at the same time you would be getting a loan at a rate lesser than a personal loan.
When is the right time to apply?

It is a good saving method to create an emergency funding for something you have in mind anyone who has a lower income or perhaps are starting off their career can very well make use of a recurring deposit account.

Different types of debit and ATM cards in India

A debit card is a card that is used for monetary transactions instead of cash. It is also called plastic cash, bank cards so on and so forth. With a debit card you can easily access your savings bank account in any bank from ATM’s you can deposit and withdraw cash whenever you want to and this would even save you the hassles of standing for hours in a long queue. A debit card can also be used in mobile and internet banking.

Do you know about different types of debit cards are available in India?
Visa debit cards: Such debit cards are issued with the bank’s tie-up with Visa payment services and this is why they also provide the Verified by Visa platform for online transactions.

MasterCard debit cards: A MasterCard cirrus card or a MasterCard Maestro Card gives worldwide access to the funds of the customers and this is why they can easily carry out online transactions using their bank accounts by making use of the MasterCard SecureCode platform.
Visa Electron Debit cards: Visa electron debit cards are absolutely similar to the Visa debit cards and the only feature that is missing from these are that these cards do not provide the overdraft feature.

RuPay debit cards
NCPi had introduced this card as a domestic card scheme. These cards help to carry out online transactions on the Discover network and ATM transactions under the National Financial Switch network

Contactless debit cards
Just a tap or wave of the contactless debit cards enables the customer to make a payment near PoS terminals as these cards work on Near field technology also known as NFC therefore making any electronic payment transfer is safer and secure.

Maestro debit card
Maestro from Master Card is a premier international debit card. It was founded in the year 1992.It is a service that has been popularly adopted at over 13 million locations that has been overspread across more than 100 countries across the globe. The signature logo on every Maestro partner card makes them easily identifiable. And this popularity instantly enables the customer to gain immediate access to his or her money  through a network of compatible ATM’s, POS outlets and online resources that are at once international and at once robust.

Do you know there is a difference between an ATM card  and a debit card?

The main difference between an ATM card and a debit card is that ATM cards can be used just in ATM machines to withdraw cash whereas a debit card can be used in ATM machines and in stores and restaurants as well for online payments.

Do you know all about Demat accounts and how to open a demat account?

The function your savings bank account fulfills for your money, your demat account does it for your shares. To be straight and succinct, a demat account holds all your shares in a dematerialised and electronic format.  All your financial machinery including government securities, mutual funds, shares, bonds are held by Demat accounts. If you want to trade in the stock market it is mandatory that you have a demat account.

Now lets see how a demat account works:

The CDSL and NSDL are two depositories in India that holds all demat accounts. A unique identification number is associated with every demat account and this is the number that you are supposed to provide while buying or sharing any share or bond in short making any transaction. This number make the companies identify you and deposit the shares and bonds in your account.

Then there are depository participants who provides a connection to the central depository. They are the brokers or financial firms that offer demat services.

Whenever you check your account,m you can see all the securities your demat account holds, this is also called portfolio holding. Whenever you make any transaction, these portfolio holdings and details are automatically updated.

Now lets get to the brass tacks! – how do we open a demat account?

The very first step is to choosing a Depository participant. There are many depository participants out there sone of them are 1. Globe capital market limited, 2. SMC global securities limited, 3. HDFC bank limited, 4. Sharekhan limited, 5. Edelweiss securities limited, 6. Kotak securities, 7. India Infoline limited so on and so forth.

Once that is done and you have chosen a depository participant, you have to fill up a demat account opening form  with the required documents and a pan card! After which, a copy of the rules and regulations and the terms and agreements will be handed over to you which will also include the charges that will be borne by  you. When Depository participant is done processing your documents for the account opening, it will give you your account number and the unique id that has been spoken about earlier on.  You have to use these details to access your details on your demat account whenever you want to. A monthly charge of maintenance of the demat account has to be paid by you and at the same time you also have to pay the charges for buying and selling securities, these charges differ in almost every depository participant.

Unlike a normal savings account a demat account can be opened even of one doesn’t hold and shares and the maintenance of shares in the account is not necessary to keep the account operable.

So, you want a car? How do you apply for a car loan?

Are you tired of the bus and train journeys and you want a car for yourself? Do you have enough funds to buy a car yourself? If you do, well and good otherwise you have to opt for a car loan like most other people do.

In order to avail a car loan the first thing that needs to be done is getting a credit check.

You have to check your credit, the moment you decide to get a loan. This score is more of an assurance to your lender about you being able to repay your loan. There are three main credit bureaus from where you can know your credit rating. 1. Trans Union, 2. Equifax, 3. Experian.

Determining how much you can afford.

Whenever you are going in for a loan, it is always advisable to check how much of the loan amount can be borne by you. Generally it is sensible never to exceed more than 20 percent of your take home pay. You also have to deliver about, how much down payment you can make, what would be the EMI and the interest rate on the loan.

You have to take a lot of things into your realm of thought when you are taking up a car loan

1. Depreciation – A car loses its value as it ages and hence it is a depreciating asset
2. Interest rate – The yearly interest fee that is added to your principal loan amount.
3. Insurance premiums – You have to figure out how much your car insurance will cost you, if in case repair cost of a particular car tends to be higher, the insurance premium too would cost higher
4. Fuel – You also have to determine how much gas will your car consume
5. Maintenance – This cost varies, one doesn’t know what kind of maintenance a car might require but the most common ones include, costs of changing tyres, oil so on and so forth.
6. Tax and fees – There are a umber of taxes and fees that are charged on on-road cars for instance for registration of your car with the state, you will be paying sales tax and not to forget the annual property tax as well.
7. Federal tax credits – You also have to do a good research, in the cases of some cars, the government incentives are available.

Below enlisted are some of the questions you need to ask before you apply for a car loan.

1. documentation – What are the documents that I will be required to produce for the loan?
2. How long will it take for processing my car loan?
3. Do you have a set amount that needs to be submitted as down payment?
4. What would be the base interest rate for the car loan
5. How much loan will I end up paying over the course of the loan?
6. What are the fees that are included in the loan?
7. Can I make early payments without penalties?
8. Can you ask me to make full payment of the loan? If yes, why?

All you need to know about current bank accounts

All those businessmen who have a greater number of banking transactions regularly with a bank open current bank accounts. These transactions might range from contra transactions, cash deposits and cash withdrawals. A current bank account is also known as Demand deposit account.

One can open a current bank account in commercial banks as well as cooperative banks. One doesn’t even have to give any notice in order to deposit or withdraw cash from one’s current account. Payment initiation to creditors using checks, that too is feasible through a current bank account. When any cheque is obtained from customers, it can be deposited in a current account for collection.

With cash deposits ranging from Rs 5000 to Rs 25000 in a bank, you can open a current account in India. Being a current account customer you will be eligible to make cheque withdrawals from the current account and one more thing worth mentioning is that in a current account the customer will not be paid any interest on the amount that is lying in it.

Lets dig deeper into some of the main characteristics of a current bank account

1. They are most operated to run a business.
2. It is a bank account where the sum lying in it will not accrue any interest
3. The minimum balance that needs to be maintained in a current account is more that what is needed to maintain a savings bank account.
4. We one borrows short-term funds from the bank, ti charges interest.
5. You can continue to own a current bank account as there is no time period for owning a current account. It is ongoing.
6. Before opening a current bank account, you have to do the proper KYC documentation with the bank.
7. The main objective of current bank accounts is the smooth functioning of businesses.
8. Unlike savings bank accounts  a current bank account can have as many deposits as possible.
9. No constraint on the number of cash withdrawals made through current bank accounts.
Now let us get to know the good it does to won a current bank account
1. Proprietors, businessmen, firms so on and so forth open current bank accounts  for large banking transactions and smooth operations.
2. The withdrawal amount has no cap and hence the withdrawal is limitless unless the government plants to levy some cash withdrawal taxes.
3. When a current account is opened in home branch of a bank, the deposit amount and he number of cash deposits are also limitless.
4. Businessmen can make direct payment by issuing cheques, demand drafts and pay orders.
5. The owner of a current bank account can avail of the short term loan facility
6. With internet banking  and phone banking, one can make transactions a cakewalk!

4 Types of insurance policies that are almost mandatory!

Human beings live as if they are going to remain the way they are. They are completely oblivious to any problem that might happen in the long run, they forget everything and continue to do things in the same fashion. One thing that should never be forgotten is that everyone will grow old and things will not be the same anymore. Or worse if any accident takes place and you suffer a disability and you are no longer able to work. From where are you going to get an income? This is where the long-term disability insurance comes in, if you take this insurance, it will ensure that you are covered if in case you have any disability and you will be able to carry on the current lifestyle without having to work.

Life insurance:

A life insurance is a must especially if you have your spouse, your family relying on you. Take into consideration the duration you want to keep working, think of the hardships and problems your family have to face once you are dead. While taking a life insurance you have to think about  how much you earn as well so that when you die, you family will not have to suffer frugality. Think of the burial costs as well. For many families, any unexpected expenditure is a cause for huge concern.

Health insurance:

Health insurance should be a necessity especially with the cost of medical treatments touching the sky.just a simple visit to a family doctor can be too heavy on the pocket. Forget about staying in a luxury resort, nowadays if anyone suffers a serious injury the cost he/she has to pay for a week’s stay in a hospital will equate the price with the resort. If one suffers with any injury that might require some sort of surgery, it is obvious that the cost will be in Lakhs. The cost of a health insurance is a bit on the higher side for everyone, but the costs of not having any would be even more!

Home insurance:

Replacing a home is definitely very expensive. However if you have the right homeowner’s insurance, the process is made simpler. Therefore it is advisable that if you are actually buying a homeowners insurance you have to pick and choose the one that covers the structures and the contents in addition to the cost of living  somewhere else while your home is being repaired.

You already own the piece of land and hence the cost of rebuilding doesn’t have to include the cost of the land. It would depend on what amenities are there in your house and the age of your home. All of these factors determine whether the current price of your house is more or less than the price you paid for buying it. To get an accurate cost estimate, it is sensible to find out how much the local builders are charging per square feet and then multiply it with the amount of space you want to replace. Make sure you include the cost of the features and upgrades. You also have to carefully include the cost of any injury that might happen in your property.

Current Account: 4 reasons why you need to open one today

When earning an income, it is crucial that you invest your earnings in the appropriate asset. There are several options you can consider, one of which includes the banking account. In this account, the savings account is one of the most popular choices of investment, as it offers a return on investment. At the same time, it also offers plenty of other assets and benefits.

However, over the last few years, the current account in the bank is becoming a popular choice for many investors. While normally used only by private companies and organisation, plenty of individuals are now opting to open this form of banking account. Here are some of the reasons why you need this account today:

It provides proof of payment: In today’s financial management, you need to provide a paper trail or a written proof that you made a payment from your current bank account. This is crucial especially for any tax purposes, such as making a tax deductible at any charitable donations. If you need to look for any of these records, you can always access your account statement, your chequebook, or even a duplicate cheque if you are using one. In fact, plenty of banking organisations now offers a printable front and back image of your cleared cheque for any proof of payment.

Current bank account cheques provide more security: This is a benefit mainly for the older generation. After all the current account in the bank can be mostly used to making payments through cheques over cash. After all, any cash taken will be spent by anyone without a trace. However, a paper trail of cheques will discourage theft. Furthermore, if you need to send funds for special occasions such as birthdays or anniversaries will be more beneficial over sending cash. A bonus is that cheques are less expensive than money orders or even casher’s cheques.

Pay or get paid easily: Most of the current accounts come with a free bill payment these days, which allows you to make and pay all of your bills online. This offers the ideal convenience to reduce any unpaid bills or even reduce increasing paperwork. In addition to this, most banks are now offering a facility where you can make person to person payments without any transaction charge. This is extremely handy if you need to make a quick payment via a bill pay.

Online banking access ease: With so many financial expenditures and channels available in the market, it is difficult to maintain a core banking system. In fact, most people don’t even balance a chequebook anymore. All they do is link their financial accounts to the latest software and manage their funds from there. However, a current account with an online access will give you an easy way to keep track of all your expenditures and help manage your finances.

Savings accounts versus Liquid funding options: Invest your savings the right way!

Investing your earning is the need of the hour, not matter the amount you are earning. While there are plenty of options you can consider, the most important choices come under the short tenure category. Under this, you can either opt for a saving account or a liquid funding option such as mutual funds.

But is the different between these two options and how it can benefit you? Given below is the difference between the two investment options and how you can benefit from investing in this short term tenure:

The rate of return: Both options offer a return on the amount that is invested. In both cases, the higher the amount you invest, the more you will receive in return. However, the rate of return for both options is different. In the case of mutual funds, the returns can be as high as 7%. However, this rate will differ on the market conditions. Meaning it can drop to the lowest amount at a short notice, thus leading to no returns at all. With the savings account, the rate of return can be anywhere between 3 to 4.5%. Normally, this will stay consistent through the investment tenure without changing drastically.

Tax implication: In both investment options, the tax is levied. However, the rate of the tax levied will differ with each option. In the case of the mutual funds, the short-term capital gains tax is levied based on the investor’s applicable tax slab tax rate. In the case of the saving account, the interest that is earned is taxable as per the investor’s applicable income tax slab. In either case, the income bracket will play an important role in determining the tax bracket for investment in either option.

Ease of operation: If you need to access the funds in the mutual funds, you need not go the institute. If there is any amount that needs to be paid, it can be done online. This makes it simple to access, especially on short notice. However, with the savings account, in order to access the funds invested, it first needs to be deposited in the bank account first.

Suitable for: As an investor you can choose to invest in either option. However, each option possess different risks levels and different returns. In the case of mutual funds, the risks are high, but so are the returns. For those who have a high risk appetite this makes for an ideal investment. For those who want to just park their funds with the least amount of risk, the saving account makes for a great investment choice.

4 factors you need to keep in mind when making an international money transfer

Millions of individuals from around the world make online money transfers for plenty of reasons. The reasons will include purchasing or selling an international property or even sending funds to family or friends overseas. If you are one of these individuals, you need to understand the different requirements for the international money transfer. They include the following:

1. Appropriate exchange rates: This is the first concern you will first need to consider when making any money transfer. The exchange rates of the financial market are not fixed and can fluctuate due to various contributing factors. Factors such as the country’s current economy, speculation of financial performance, inflation and recession can affect the exchange rates. This can lead you to compensate for the increase or decrease in the exchange rate, which would include transferring more funds. But by being aware of these factors, you can calculate the appropriate exchange rate and know how much you need to invest accordingly, and thus save up your funds instead of spending unnecessarily. If you are planning to make an online money transfer, you can check the rates online before you invest the appropriate amount.

2. Low transfer fees: Apart from the exchange rates, you will also need to keep track of the transfer fees. Depending on the institution you have opted for, the transfer fees can be pretty high, every time you move funds overseas. This can be calculated in percentage, or whether the amount surpasses the acceptable transfer limit. In either option, you will end up spending a lot more than what you would want to, or even on unnecessary funds. Therefore, you need to know how much of a money transfer you will end up making, based on the amount being transferred and the transfer fee.

3. Custom service: You should not compromise on the quality of your service, just because you will be paying a lot less than other competitors. In most financial institutes, an individual manager will be assigned to each account, and provide the relevant assistance. Furthermore, it allows you as a customer to speak to a dedicated expert whenever required, such as when making large transactions or a first-time online money transfer. The personal assigned to your account will provide you with security against subsequent foreign exchange movements along with helping you negotiate the often unpredictable foreign exchange markets. This will enable you to secure a money transfer that will satisfy your requirements and allow you to budget ahead with confidence.

4. Security: When making any international money transfer you will be risking your funds to the conditions of the market and scrupulous individuals who can take advantage of any flaws in the institute’s system. However, a credible organisation will help you safeguard your funds and offer you a peace of mind, anytime you make a money transfer.

Why opting for a forex travel card is better than other options

When travelling to a country abroad, there are plenty of financial expenditures you will end up making. Be it a business trip or a financial one; you will be required to make small or medium expenditures from your pocket. This can include purchases for general items, food items or even travelling requirements.

Opting for cash for these instances may seem like an ideal solution. However, you may not have sufficient cash to spend on all requirements, without risking of spending it all. You also risk carrying an immense amount of funds least you become a target for the local thieves. Furthermore, if you opt to use your banking cards, you risk incurring high fees in terms of service charges or high conversion rates.

So what is the alternate tool for your financial requirements? This is where the forex travel card will be useful. This foreign exchange card functions like a pre – paid banking card, which can be loaded with a fixed amount of funds in the local currency. To access the funds on the card, it must be swiped.
But unlike the other banking card, the forex card comes with plenty of benefits. They include:

Direct access to your bank account: One of the most important features of the forex travel card is the direct access to your bank account. Once you have completed using all the funds on the card, you can contact the lending bank and ask them to transfer a sufficient amount of funds onto the card. This can be done by directly contacting the bank, or even emailing an application for it. You can even have someone from your family make the transfer request on your behalf.

Hold multiple currencies: Another important benefit of the forex card is the foreign currency. Most lending banks offer forex cards that can hold multiple currencies. This makes it beneficial if you will be travelling to multiple currencies in one trip. Rather than carrying multiple currencies in physical cash, you can easily carry the card and access the required local foreign currency when required. Furthermore, when you load the card with your local currency, the conversion rates are fixed. Therefore, when accessing funds in the foreign currency, you will get financial protection against fluctuating financial conversion rates.

Withdraw funds when required: As previously mentioned, you can easily access funds on the card with just a swipe. This makes it useful if there is a swiping machine at the point of sale. However, in the event you need to access physical cash, you can easily use this card at the local ATM and withdraw funds. A small service fee will be levied to withdraw the funds from your account.

While there are plenty of other benefits to this card, you must ensure that the card fits your financial requirements before you apply for it.

Factors to remember in order to choose your health insurance wisely

While healthcare estimations are soaring higher with each passing year, you will be looking for ways and means to ensure that you stay healthy at all costs. However, there are certain medical illnesses and disorders you cannot avoid at any costs. This is where the health insurance will work in your favour. But like several other insurances, it comes with several riders and benefits, which has led to several variants to it.

You will also need to choose from the different insurance lenders available in the financial market, along with the different types of health insurance. Furthermore, there is a matter of the fine print that you need to read through. In the end, buying the right insurance for your health will not seem like a simple affair.

To help you get started, here are a few factors you need to consider when opting for the right insurance type to suit your requirements:

Start young: Plenty of financial advisors have often recommended purchasing a medical insurance a young age. The logic behind this is that at a young age you will not have that many problems with your health as you would do once you reach your forties. However, most applicants consider the prospect of a medical insurance later in their life, where the waiting period will be 2 to 3 years. Moreover, purchasing a medical cover right in the beginning will decrease the amount of insurance premium over time.

Easily compare policies online: There are several different types of health insurance covers in the market. So choosing the one that suits your requirement to perfection will be a tricky deal. But with a bit of research, you can easily choose a policy that will suit your requirements. The best way to go about it is by comparing policies online. A comparison here will leave you with a breakdown of the different policies which will give you a better understanding.

Opt for the right category: Apart from the different types of health insurance covers, there are also the different categories you need to consider. For example, you can opt for a single policy, or a family floater policy, designed for your family as a whole. In the case of nuclear families, it is better to choose a family health insurance plan, rather than an individual policy for each member.

Opt for additional coverage: Most health insurance plans provide additional coverage for specific needs. Some plans even include covers such as maternity and critical illness amongst many others. Under these covers, you may have to pay for an additional premium, but in the long run, it will benefit you especially when you will be faced with unprepared expenditures under these categories.

Are you aware of these business loans myths?

As a small business owner, you would be required to finance an aspect of your business development. While there are plenty of options available, the small business loan is one such option.

It might be intimidating to obtain this loan, after all there have been rumours where loans for the business applications have been rejected. However, you shouldn’t believe everything that you hear. In fact, here are some of the common myths about getting this business loan that you should be aware of:

Myth #1: Getting the small business loan is the hardest thing

Obtaining financial for your business will not be an easy feat. However, it doesn’t have to be an insurmountable challenge. In fact, the best way to avoid any trouble is to prepare for any possibility of challenges that your applicant will face. In this way, a lot of frustration in obtaining financing can be avoided just by doing your due diligence. 

Myth #2: You will need the perfect credit score to get an approval

Previously, low credit score where known to preclude you from getting the loan your required. However, today’s financial environment is a bit more flexible to credit ratings. Most banks, both the upcoming and the traditional banks may still have a few restrictions when it comes to obtaining credit, however they will offer you plenty of alternate options, based on your business type, time in the business and cash flow.

Myth #3: The worst way to obtain a small business loan is through a bank

It is a belief that banks will only cater to the business that have shown prominent growth, or even have a strong reputation. In other words, there will be a chance of a loan application approval, only if your business is big and with a strong reputation. On the contrary, banks do offer custom loans that cater to the needs and requirements of small businesses. In fact, plenty of banks offer financial aid for local businesses, in order to help the, grow and develop, while matching their growing financial needs. If you can project your growth development, you can approach the bank as a financial lending partner, for a long term purpose.

Myth #4: Your application will not get approved if you opt for huge loan amount

This is one of the common myths that is associated with loan applications. While it may be alright to ask for funds, it is normally taken into consideration only if the funds will be used for personal requirements. However, for business loans most bans will offer large amounts, as the banks will in turn benefit from this loan. All you need to ensure that the cash flow of your business will match the requirements of the loan especially in terms of repayment.

Are you aware of these three factors about the NRO account?

More and more Indians are travelling abroad to earn a higher income through foreign currency. At the same time, these individuals would want to maintain the income that is earned through their residential country, especially through dividends or rent.

This is where the NRO account will prove to be beneficial. Through this account, both the foreign income as well as the residential income can be deposited in the account. The funds that are deposited in this account will be converted into the rupee value.

While plenty of individuals have this NRO accounts, it is still important for the holders of the account to know influential factors associated with the account. By being aware of the consequences of the factors associated with the account, it will have an impact on the manner in which the investor will deal with its various aspects:

Choice: When it comes to the NRO account, there are plenty of choices available to the investor, based on financial functionality. For incidence, if the investor only wants to deposit or withdraw funds, there is a choice between the saving account as well as the current account. In the case of the savings account, the funds deposited will earn interest, especially when not many transactions are necessitated. In the case of the current account, it will provide the account holder with the flexibility to undertake several transactions. However, no interest will be earned on the deposits. This extra deduction can be used for additional benefits. In terms of investment, a fixed or recurring deposit is available. In the case of fixed deposit, a lump sum amount can be deposited with the interest rate fixed to earn a return which will deposit at a fixed tenure. Similarly, with the recurring deposit, a fixed amount of the income can be deposited account on a monthly basis with the interest rate being fixed throughout the duration.

Taxation: Unlike the other NRI accounts, the NRO accounts are taxed. The entire amount of interest earned on this account is taxable. It indicates that no part of the income will be considered as tax-free. However, there is no cause for worry for non – residents as there is an exemption clause that calculates the total tax liability. This exemption limit is currently at Rs. 2.5 lakhs.

Tax deduction: The NRO account is liable for tax deducted at source for the income that is earned. In other words, any amount earned right from the first rupee will be taxable. The rate of deduction is at a general rate of 30%, which is considerably high. While there may be certain clauses where a lower rate may be applicable, it will differ based on the investing bank. However, the account holder may need to file a tax return and get the appropriate refund for this to be applicable.

Managing your wealth better with an NRE account

As an NRI who is earning in foreign currency, you have plenty of financial opportunities regarding investments and even conversion into the resident currency. However, before you can utilise your foreign earnings, you first need to deposit it in the ideal and government acceptable medium, namely the NRE account.

This NRI account stands for the Non-Resident External account, with emphasis on the ‘external’ factor. As an NRI or a PIO, you can open this account, and invest your foreign earnings in it. The following are the features of the NRE accounts and how you can benefit from it:

Features of an NRE Account:

Tax-free account: This is one of the main benefits of the NRE account. As an earning member, the last thing you would want is to let all your hard earnings get cut due to taxation. However, the earnings in this account is not a tax. This tax-free feature applies to both the principal and the interest earned. In this way, you get to earn funds without any worry about taxation.

Fully repatriable: At some point in time, or even on a monthly basis, you may want to repatriate your funds. While this process may be seemingly complicated, you can get to remit funds abroad from the account without any headaches. Moreover, unlike the NRO account, there is no cap to the amount on the repatriation or any evidential requirement from your CA if you exceed a particular amount for repatriation.

Higher interest rates: As compared to the residential bank accounts, the interest rates for the NRE accounts are considerable higher. Added to the fact that you will be earning in a foreign currency which has a high currency conversion, it makes for an ideal investment. This is especially crucial if you have a steady and high income with a requirement to remit on a regular basis.

Power of attorney: Managing your NRE account may be tedious. But you can always appoint a mandate to operate the account on your behalf. This will ease off the burden on your back while allowing the funds to be transferred to the appropriate party, especially if it is for your family member in your home country. You only need to inform your bank about a power of attorney and take the necessary steps to appoint a mandate.

Investment can be made from this account: While the value of the foreign currency is high abroad, the financial market conditions of India are quite favourable for investments. Foreign funds are a good way to get a promising return, especially if the funds from the NRE account can be used. Once the funds are invested in the account, you can invest the appropriate funds in appropriate sources, such as the Indian mutual funds and stock.

How to add a joint account holder to your NRI Account?

More and more Indians who have settled abroad are taking advantage of a double income. This includes earning an income through the foreign currency and investments in the home country.

This multiple complex financial functioning has been made possible through the introduction of the rules and regulations of the NRI account. Non – resident Indians are now allowed to open either the Non-Resident (External) or the Non-Resident (Ordinary) account based on one’s requirements. However, the repatriation rules for each of these accounts are different. For example, the NRE accounts are freely repatriable, whereas the NRO accounts are conditionally so.

Similarly, the requirements for adding a joint account holder to the account is also different. An NRI can be a joint holder with any resident Indian only on a former or survivor basis. However, the NRI can only add a non - resident mandate holder to his NRE account. In the case of the NRO account, an NRI or resident account can hold a joint account holder.

But why should you add a joint account holder to the different NRI account? There are several reasons, which includes convenient access and management of the account. It could also make the transfer of funds easier, especially of the recipient is a member of the family, where the funds repatriated are used for household maintenance.

In order to add a joint account holder to your NRI bank account, here are the steps you will need to follow:
Form: You will need to approach the bank where you have opened the NRI account, and request for a joint applicant inclusion request form. You can either get a physical form or down the form from the bank website. Follow the instructions on the form and fill up the respective details. If the customer is already an existing customer of the bank, he/she should also include the customer ID. 
Documents: As a part of the application process for the NRI bank account, the following self-attested document copies must be provided:

• Passport: Normally the first and the last page of the passport is required.
• Visa: Current visa is required
• OCI/Resident Permit
• Overseas address proof
• Initial paycheque of the joint applicant’s overseas account. If unable to do so, the passport and visa copy must be duly attested. It should be done by a foreign notary or Indian consulate general in the foreign country.

In the event the documents cannot be provided, alternate KYC documents permitted by the bank can be submitted.

Submission: Once all the forms have been completed and signed, along with the necessary documents, it can be given either at the overseas bank branch or the Indian branch. Alternatively, the documents can also be dispatched to the bank at its head address in India. In this case, most of the banks provide a PO box facility for these overseas activities. Once the documents are received and ascertained to be in order, it would take around 10 days for the process to be finalized.

Stay smart with your education loan with these 5 factors

No individual should begin their earnings with a debt to repay right in the beginning. In fact, this is a primary fear that prevents students from applying for a loan, in order to achieve their potential. After all, to start one’s earning paying off a previous debt will not leave one with sufficient funds for any other crucial expenditures.

On the hand, the education loan offers plenty of benefits, especially since it elevates the burden of spending one’s saving to gain a high education degree. By opting for this loan, a student can easily get the financial boost to apply for an education degree, which will not only promise a potential return but also put one above the competition.

Furthermore, the loan will help the student to save funds for any unforeseen or additional expenditures without putting a financial burden on them.

But while the educational loan will seem like debt, it, in fact, takes a proper requirement and strategic planning to efficiently afford the loan and repay the borrowed funds back. In order to ensure that your savings are kept safe, here are a few factors to keep in mind before you begin the application process:

Factor #1 – Availability: The education loan is normally available to Indian nationals only. These individuals must have a secured admission to a professional or technical course in India or even abroad. The selection process must be done through a merit-based procedure.

Factor #2 – Loan amount: Most banks offers a loan amount of Rs. 10 lakhs for courses in Indian colleges. For courses abroad, the amount can go up to Rs. 20 lakhs for studies abroad. However, the amount that will be finally provided will be in line with the norms provided by the Indian Bank’s Association.

Factor #3 - Co-applicant requirement: For the application of the education loan, a co – applicant is a must. It can include either parent, spouse or sibling. This is a precautionary step for both the applicant and the bank so that the combined financial profiles will offer a higher loan amount, and the bank will receive an assurance that the funds will be repaid back eventually.

Factor #4 – Provision of collateral: If the educational loan is less than Rs. 4 lakh then no collateral is required. For any loan amount that is higher than this amount, a personal guarantee is required from an individual who has an acceptable income and repayment capacity. For loan amounts higher than Rs. 7.5 lakhs, the lender will require a collateral security

Factor #5 – Repayment commencement period: The repayment procedure is not initiated right in the beginning. The process will begin six months to a year after the completion of the course. This is to keep the simple interest charged during the moratorium period.

Investing a portfolio investment: All you need to about investing

A portfolio investment scheme comprises of a passive investment of securities in a portfolio. This portfolio is made with the expectation of earning a return, in direct correlation with the portfolio’s expected risks.

Most of the schemes for the portfolio investment in India span a wide range of asset classes which includes, stocks, government bonds, corporate bonds treasury bills and real estate investment trusts. It also includes real estate investment trusts, exchange-traded funds, mutual funds and certificated of deposits.

The investments made in a portfolio depend on the investor’s individual circumstances or certain factors. These factors such be weighed against the investor’s goals and time horizon. In most cases, the factors include the following:

Creating a portfolio investment scheme roadmap: Before making any investment, you need to be aware of your entire financial situation, especially as a first timer. You need to understand your goals and risk tolerance. As there’s no guarantee that you will make money from all your investments, getting the right facts and details about your savings and investing will help you create an intelligent plan backed by the right financial security. In this way, you can enjoy years of benefits of managing your money.

Evaluate your comfort – risk zone: All investments, including the portfolio investment in India, involves some degree of risk. In the event you need to invest in a portfolio, it is important that you understand all the influential factors before you lose some or all of your funds. Not all investments schemes are protected by insurance. In certain investments, you could lose your principal. However, the reward for taking on risks offers a great potential for higher investment returns. If you have a financial goal with a long time tenure, you will have a chance to make more funds by investing in asset categories with fewer risks, as compared to investing in assets with fewer risks. Alternatively, you can also invest in cash investments that are appropriate for short term financial goals. However, there is a concern that investing in these cash equivalents will also include inflation risks, which can outpace and erode returns over time.

Consider the mix of investments: A portfolio scheme comprises of different investment categories, whose returns variate under difference market conditions. With this different conditioning within a portfolio, you can get the ideal protection against significant losses. In reality, the returns of three major asset categories such as stocks, bonds and cash have not fluctuated at the same time. That is because, market conditions will cause on asset category to do well, causing the other asset category’s returns to be reduced. By investing in more than one category of asset, you will help balance the investment risk and ensure an overall investment return. In this way, asset allocation, is important, as it will go a long way to meet your financial goal.

Advantages and disadvantages of sending money to India through mobile apps

When making a money transfer to India, there are various options you can consider. Some of the traditional channels of money transfers include in – house bank accounts, wire transfers, email transfers and even cheques.

However, with digitisation take up a prominence, more and more banks are offering services to send money to India through specialised apps. These apps are designed to be specifically used on the smartphone platform.

Some of the benefits of this platform includes:

Easy to use: It’s like a one touch pay, with no requirement to fill in your card numbers and passwords every single time. You can easily link your banking card or account details to the app and make the payment immediately.

No inconvenience regarding transfer amounts: When you make a money transfer to India through these apps, you need not worry about making a money transfer with amounts that have to be fixed. You can send any amount of funds, as per your requirement. This can be in even or odd amounts.

Make instant payments: It will be possible to make instant payments. This is especially useful for cases where a financial emergency occurs. Additionally, it also eliminates the lengthy waiting periods, which normally occurs during the traditional money transfer channels.

Everything under one roof: Through these apps, all your data from multiple platforms will be synchronised through one channel. Right from your bank accounts, banking cards, mobile accounts and bills, they will be interconnected on one platform. This will make it easier to manage and access, as it will be all under one roof.

Some of the disadvantages of this app include:

Mobile network connectivity: Mobile network connectivity is always the biggest impediment. Furthermore, both the sender and the receiver will need a fast, secure and reliable network connection to make a successful money transfer.

Mobile security: Alongside connectivity, security issues are also now on the forefront. Plenty of occurrences of money being misused through these apps has to make rounds, creating doubts and suspicion in the minds of users.

Insufficient support infrastructure: Indian still has to reach its peak potential when it comes to its infrastructure and financial literacy. Unless this requirement is met, there is no use in focusing on advanced technologies when the base is not strong enough.

Customer service is not up to mark: India does not have such a solid dispute resolution process. In the event an individual as an issue with the app, considerable time and effort will be taken to resolve the issue. Furthermore, the experience of most individuals with the customer service agents hasn't been encouraging.

While there may be disadvantages present through this channel, the advantages overweight them. By being aware of these disadvantages, you will know how to make the most of this money transfer services and make the most of this service.

NRI Banking: Tips on how to open your account and understanding the benefits of it

The NRI banking system has been designed to offer the best of banking facilities for those Indians who have been residing abroad, under the status of an NRI. Since most of these individuals earn in the foreign currency, the NRI services allow these individuals to invest their earnings and utilise them for both their foreign financial needs as well as their residential needs.

Some of the benefits of this service include:

Convenience: Most of the NRI accounts provide access to the banking system, depending on the financial needs of the NRI. Through these services, you can make a quick transfer of funds, or even make an exchange of currencies through a quick channel.

Time-Saving: NRI services gives easy access to your funds, whether physically or online. You don’t need to run to your local foreign bank or call a friend for a favour to access funds.

Diversification: For those are concerned about financial risks and the volatile conditions of the market, such as in Europe and America, this is one solution to diversify your investments and savings.

Interest: The NRI banking services allow you to compare the different interest rates of the different investment options. This will help you get the best of the interest rates and earning potential between your local country and the one you are residing in.

Currency Hedge: The currency hedge provides an advantage of minimising the currency risks, mainly the fluctuating rates. In the event, your savings are invested in the rupee, while the rest in dollars, then you will be effectively hedging yourself against any fall in the dollar value. This will also work against the value of the dollar if it goes up.

Keeping these factors in mind, you can now open your NRI bank account to invest your earnings and get the best out of your earnings. To open your NRI account, you need to:

Step 1 — Know your status: There is a considerable difference between holding a status of an NRI and holding a status of a PIO. As this factor is an important pre — requisite for most account applications, it is crucial that you have the necessary documents to qualify for it.

Step 2 — Select your choice of the bank: You can choose the bank that will offer you the financial services that you require. To know more about the bank services available, you can always check out the bank details on their website. However, ensure that the bank is authorised by the Reserve Bank of India.

Step 3 — Account type: Most of the banks offer information about the different types of bank accounts available, and what type of bank account you will need to opt for based on your financial requirement and situation. Once you are aware of the requirements, you can now easily begin the application process for your bank account.

Send money to India: What is the best solution?

If you need to transfer money to India, the good news is that, you have plenty of options you can consider. These options offer different features, right from low costs, safety, and quick service. You can even choose different transfer mediums, right from physical to digital transfers.

In order to choose the best services for yourself, you will need to balance out the following considerations:

• The amount to be sent
• The speed of the remittance
• Costing of the service
• Transaction safety
• Rate of exchange
• Fee for currency conversion
• Channel through which the recipient will receive the funds.

Once you have fixed these conversions, you can now opt for the different channels through which you can send money to India. Some of the popular options include:

Bank remittance: Bank remittance will always be one of the safest way to send money to India. Most of the major banks have money transfer services that will allow you to send funds from one location or country to another. In the occasion you need to send money fast, you can always opt for wire transfer. They are very cost effective, especially if you need to end large amounts. Through these mediums, you can easily transfer funds to the recipients bank account or banking card.

Online money transfer services: This is one of the most convenient and popular ways to transfer money to India. You can make this transfer through the computer, laptop and even your smart phone. In addition to this platform, you will also need to secure and uninterrupted internet connection. This option is best for those who want to send small amount. Depending on which online service you opt for, a percentage of the money to be transferred will be charged. Additionally, it may also differ based on the location or country you will be sending it to.

Money Transfer Operators: Certain money transfer operators, function as private money transfer services, with branches all over the world. They offer a convenient transfer service, which does not require the recipient to have the same money transfer channel as the sender. For example, the receiver does not require an internet connection in order to receive the funds. Getting the funds this way will also be convenient, since they have several branches in most countries. To avail this service, you will need to provide relevant details about your account details and the funds you will need to transfer. Furthermore, since the recipient can pick up the funds in person, precaution must be taken to ensure that the appropriate individuals pics it up.

When making the money transfer tips, you need to:

• Be aware of the sender you transferring your funds to
• Always check for hidden fees in the fine print
• Avoid giving out any personal information
• Keep proof of your transaction in the event you need it
• Check with the receiver if they have received the funds.

Why your credit card should be your best friend

When it comes to accessing funds on short notice, the credit card makes for a great benefit. This is beneficial, especially in situations where cash is difficult to be carried or used. This card offers the convenience of making payments and managing your cash situation.

Through this banking card, you can easily borrow funds through the lending bank, and repay pay it back as per your convenience. However, credit cards can either become an easy and convenient money tool, or the evil in your wallet which can easily turn into the root of all your money troubles. You need to exercise caution when using the card, so as to prevent it from harming your financial profile. Here is how it can be done:

It is a convenience, not a source of income: Through the credit card, you can easily access funds borrowed from the bank, as long as you stay within the credit card limit. This limit can be anywhere between minimum amounts of Rs. 2000 to a higher amount of Rs. 20,000. With this, you can easily swipe the card for your purchase, without having to fork out cash immediately. It will give you the feeling that you can spend freely, if not endlessly. However, at the end of it all, there will be a credit card bill you will need to pay for, wherein which, you will require the funds to pay for it. To avoid this situation, you must limit your expenditure to a certain limit, or until you can pay it off. This will help you avoid any unnecessary expenditures or even any additional interest rates.

Risks associated with failure to read T&C: The biggest risks associated with credit cards is the failure to understand the terms and conditions that come with the issuing of the card. In reality, this banking card is nothing but a cost-free, short term, which will benefit you so long as you pay the credit card balance on time. If you fail to do so, it will turn into a high-cost debt. To avoid this situation, you will need to take the time to know all the details about the card. This will include, how the interest that is payable is calculated, the conditions where the interest rates will increase and what type of card usage will attract fees. By knowing these facts, it will help you use the card properly.

Avoid pitfalls: You may think that paying off the minimum amount on balance will mean that you are done with your obligations for repayment. However, till the dues are fully cleared, you will need to pay in large amounts. For one, you will be charged a high rate of interest on the outstanding balance, in addition to all the purchases you make in the future till all your dues are cleared. At this point, if the dues are not cleared, you will not have any free credit period anymore, with all purchases being charged with interest immediately.