Going Cashless with Mobile Payment Apps

India is moving towards a cashless future slowly but steadily. The Digital India campaign launched by the Indian government has given rise to a number of mobile payment apps that look set to revolutionize the economic system of India. The demonetization of Rs.1000 and Rs.500 notes that happened in India last November also resulted in the upward growth of online payment apps. Now there are different types of mobile payment apps. While the objective of all these apps is to make digital payments ubiquitous, they all have some unique features that makes them stand out from the lot. While choosing one from so many great options can be confusing, being spoilt for choices is never a bad thing. So, get to know about all the different types of mobile payment apps and make an informed choice accordingly.

Privately owned E-wallets
Many businesses have come up with wallet apps which strive to make cashless transactions the norm. These are like wallets that you keep in your phone and not in your pocket. Instead of carrying cash in your pockets, you are carrying it in your mobile phone via the app. You have to fill your wallet with cash by using debit and credit cards and net banking service. Even though the apps are owned by private businesses, they follow the terms and conditions laid down by the RBI and are highly secure and encrypted. Paytm, Freecharge, PayPal, Mobikwik are all market leaders in this domain.

E-wallets by Banks
Many banks such as SBI, AXIS, ICICI, HDFC, Yes Bank provide their own e-wallets that can be really useful for people who are skeptical about the credibility and security of e-wallets provided by private companies. The wallets can be loaded with cash by using debut cards, credit cards or the bank's net banking services.

UPI Apps
A UPI app is one of the most useful apps that gets directly linked to your bank account. Unlike e-wallets, you can make a direct payment from your bank account to another bank account. UPI apps run on a system provided by the NPCI (National Payment Corporation of India). UPI works round the clock on a fund-transfer system in real time. Almost all public and private banks including SBI, ICICI, HDFC, AXIS provide UPI services.

Aadhaar Payment App
Get your bank account linked with the Aadhaar card and make easy cashless payments through this app. You have to use your Aadhaar card number for making successful transactions and security is not going to be a concern as every transaction is verified using your fingerprint.

The future of Mobile Payment apps: what can you expect?

Demonetization and the Digital India campaign have given the objective of a cashless India a great boost. And mobile payment apps, more commonly known as mobile wallets, have gained a large market share in this process. Paytm, Mobikwik, Freecharge are the market leaders in this domain and boast of a huge customer base and remarkable statistics. Today, Paytm alone has more than 200 million customers in India and intends to increase the numbers with time. But there are certain barriers that stand in the way of the growth of the mobile wallets.

There is a huge potential for all the cashless payment methods in India. However, plastic money like credit cards and debit cards still haven't garnered that kind of response from the masses in the country. People prefer the payment methods that can be accessed through their smartphones much more. And mobile payment apps have capitalised on this market segment. They offer attractive cashbacks, discount coupons on every transaction, a business strategy that has helped them in building a loyal customer base. But this particular strategy has also resulted in losses for these mobile wallets. Paytm reported a loss of Rs. 1,651 crores in the last fiscal year.

Another drawback of the mobile payment apps is that they are not interoperable; you can transfer funds from a Paytm account to another paytm account but not from one Paytm account to a Mobikwik account. This limits the scope of transactions on part of the user. And now with the advent of UPI, mobile wallets are looking at very stiff competition. National Payments Corporation of India (NPCI) has developed the UPI technology that facilitates direct transfer of funds from one bank account to another with the help of a mobile app. UPI looks set to replace NEFT, RTGS and IMPS transactions and the mobile wallets should think of something innovative to survive and they must do that quickly. The digital user is busy and on the move. Thus he/she always looks for ways to minimize effort. UPI can attend to the digital user's banking needs in lesser number of steps than the mobile wallets. Today, if you try to make a payment to Uber through Paytm, first you have to load your Paytm wallet with cash from the bank account and then you can pay for your cab ride from the wallet. UPI lets you access your bank account and make payments from it directly, without the involvement of any third party.

Many banks have come up with their own UPI apps and they are independent of the banks meaning that even if you have an account in SBI, you can use the UPI app of Axis Bank. But it's not all grim for the e-wallets. The RBI has recently said that it would allow interoperability between the different wallets and that would definitely widen their reach.

Facts about e tax payment you need to know

Taxes are revenues that are earned by the government. A working citizen of this country has to pay taxes which are used for various government expenditures and also for the proper functioning of the various government machineries. The IT department of the government of India has allowed e-tax payment for people having online bank accounts. Therefore, people in our country can pay income tax by means of a challan through banks and also via the e-payment method. Thus, the Income Tax department has made it extremely easy for people to file their taxes. People no longer need to wait in long queues to make tax payments but can do so from the comfort of their homes.

• Eligibility: All taxpayers can pay his/her income tax online provided he/she has an online banking account with an authorized bank. However, only a few public as well as private sector banks have been authorized to receive e-tax payment by the IT department.
• However, there are two categories of people who are specifically required to pay taxes via the online mode only. They are all the corporate assesses and all assesses who come under section 44B of the Income Tax Act.

Furthermore, there are a number of benefits of paying income tax online. They are:

• Instant transfer of funds.
• You receive a detailed receipt for the taxes paid as soon as the amount is deducted from the online bank account.
• You can download and keep the receipt and the challan for future references.
• The details of the payment are directly sent to the Income Tax department and this reduces the workload of banks as they do not have to do enter the data again.
• You are able to pay taxes from the place and time of your choosing.
• You can also log on to the official website of the Income Tax Department to find out if your tax amount have reached them or not.

Some of the banks which have been authorized by the Income Tax Department to receive e-tax payment on its behalf are: UCO Bank, Vijaya Bank, Oriental Bank of Commerce, State Bank of India and its affiliate banks, ICICI bank, Bank of India, Axis Bank and Allahabad Bank.

The required challan number for paying income tax online is ITNS 280. Similarly, after successful payment of taxes, you will receive an acknowledgement containing the CIN or the Challan Identification Number. This can be used to verify the status of the e-tax payment.

The IT department has also made it mandatory for assesses who have paid over 1 lakh rupees as service tax in the previous year to pay service tax via the online mode. This regulation has been in effect since 1st January 2014.

What is the difference between IMPS and other transfer services?

Online money transfer is a very important banking service that everyone makes use of some point of time or the other in their lives. For parents whose grown children are working or studying in a different city or country transferring of money online from one party to the other is a rudimentary and routine matter. Mainly banks across the country provide the following kinds of online money transfer services; Immediate Payment Service or IMPS for short, National Electronic Funds Transfer or NEFT for short and Real Time Gross Settlement or RTGS for short.

Each of the transfer services mentioned above have different monetary values for minimum transfer, different speeds, have different availability and several other features such as the processing fee levied on the online transfer.  In times of dire need and emergency a quick and easy transfer service is of the utmost importance. In such a case IMPS is the answer to your prayers.

Other transfer services such as NEFT is carried out in batches and is not subject to availability for use during bank holiday periods and on Sundays. NEFT allows for small value transfer which can be as low as one rupee with nominal processing fee charges. The charges are pretty standard provided the two banks (the sender bank and the receiver bank) are NEFT enabled and are part of the huge network. To sum up the features of NEFT transfer, it has no upper limit of transfer. This makes NEFT extremely cost-effective and enables for extensive usage by people when it comes to online transfers.

RTGS has a set minimum as well as maximum transfer value which range between two rupees to ten lakhs. The RTGS transfer facility can be made use of only when the two banks are RTGS enabled. RTGS transfer service is mainly made use of when there is a need for high value transfer instantly. Due to the quick accessibility and speedy transfer the processing fee charged for the transfer is quite exorbitant.

Now when we come to IMPS, it is quite beneficial for most users as it balances somewhere between the advantages of a NEFT and RTGS transfer service. Perhaps one of the biggest perks of IMPS transfer service is that it can be made use of 24*7 and is also available during bank holidays. This is a very important factor for a lot of people who suddenly and very urgently need money. IMPS allows for a minimum transfer of one rupee and a maximum of 2 lakhs. The transaction time is immediate and the processing fee is quite low almost on the same ranks as that of NEFT. However, the only drawback is that it is only internet and online banking specific unlike the other two which can be carried out both online and offline.

New updates of the NEFT you need to know

In today’s world there are many people who are living away from home for the purpose of study or work, sometimes in a different city and sometimes in a different country or continent. Also, in the current scenario of globalization people in the world of trade are conducting their day to day business activities with investors or other businessmen located in countries that are strewn across the globe. Sending money or checks through mails are a risky and dicey affair. When it comes to the financial aspects security is always an important factor. Online money transfer from one bank account to the other is how the financial criteria’s are met in such cases. 

The more the ease and speed of the transfer service, the greater the chances of accessibility. NEFT or National Electronic Funds Transfer is a system of money transfer service that provides for one on one transfer.

Latest Updates of NEFT

According to the latest update the features of the NEFT account stand currently as one of the most secured modes of both online and offline payments. NEFT has no minimum or maximum limit of transfer. Any sum of money can be transferred using NEFT service, only the benefactor’s account and the beneficiaries account need to be NEFT enabled. The benefactor can also track his or her transfer details of the National Electronic Funds Transfer via the branch of origin.

NEFT services were always customer friendly as the processing fee charged for each transfer was always quite low. Earlier the NEFT charges levied were Rs. 2.5 for transfers that were less than Rs. 10,000, rupees five for the transfer sum ranging between Rupees ten thousand to one lakh and Rupees fifteen for money transfers ranging between one lakh to two lakhs and transfers ranging above 2 lakhs were charged rupees twenty-five. However, according to the latest newspaper report that came out on November 6th, HDFC bank has made all NEFT and RTGS money transactions free of any charges effective as of November 1st, 2017. In order to balance the weighing scales, HDFC has declared that any other cheque-related money transactions as well as additional chequebook leaves on top of the already existing twenty-five count will get extremely expensive.

Aside from the processing fee part, the other features of NEFT remain constant. NEFT services cannot be availed of during Sundays and on bank holidays. NEFT transfers can be made only between eight in the morning to six-thirty in the evening during weekdays and between eight in the morning and twelve-thirty in the afternoon on Saturdays.

Why business owners must have a current account?

A current account, also known as Demand Deposit Account, is generally used by businesspeople who have a good number of business transactions with the bank on a regular basis. A business, whether small or big, normally does a number of transactions on a daily or even on an hourly basis. Money is continuously debited and credited and there is generally no savings in the account. A current account has an Overdraft facility that allow businesses to pay their customers and clients even when there is scarcity of funds in their accounts. This is almost like a loan but only for a very short period.
Thus it is imperative for business owners to operate a current account and ensure that their businesses function in a hassle-free manner.

The benefits of a current account are as follows:

• This account helps a businessman to carry out his transactions in an easy and time-bound manner.

• It allows a businessperson to withdraw as much as they want from their account. However, banking cash transaction tax may be levied by the government.

• An important benefit of a current account is that helps to differentiate between business finance and personal finance. Complications may arise when a freelancer or the sole owner of a business parks his/her business money in his/her personal account. This is because a sole owner is not a separate legal entity like a company. If the business transactions are carried out in a single saving account, the proprietor may not be able to gauge the state of his/her business if his/her personal finances are healthy. A separate current helps to differentiate between business finance and personal finance as it records the business income and business expenses.

• Operating a current account helps to elevate your credit standings. Creditors and other lenders often check your credit history before deciding whether to provide credit to you or not. In such cases, a letter of recommendation from your bank where you have a current account may go a long way in facilitating a loan from a creditor.

• Most banks offer services like 2 hours phone banking, door-step banking, internet banking and mobile alert services with current accounts. Sometimes, banks also provide a number of free pay orders or demand drafts and also allow a person to transfer funds instantly using NEFT, RTGS and others. Current account holders do not earn any interest and therefore banks provide a number of value-added services to current account holders.

• The overdraft facility is arguably the most important reason why a businessperson needs a current account. This facility allows a person to overdraw the balance in his account when he/she is short on funds. This is like a short-term loan and the bank may/may not levy interest on this loan.

Smart Facts You Need to Know About the Zero Balance Account

In a growing economy like India, most people manage to save only a small sum of money each month and obviously don't want to be penalized on account of not having a minimum balance in their accounts. Most banks have the account holders maintain a specific amount of balance in their accounts; otherwise, they impose a fine that is deducted from the customers' accounts. Some banks, however, let people open an account on which the minimum balance restrictions are not valid. These accounts are called zero balance savings accounts. Here are the things you should know about a zero balance account where a minimum balance does not have to be maintained.

No Restriction on Balance
The biggest advantage that a zero balance account has over a normal savings account is that no minimum amount of balance has to be maintained. While the amount of the minimum balance may vary from bank to bank, but not maintaining that amount in your regular account will result in a fine that will be deducted from your account. In a zero balance account, there are no such restrictions.

Same Interest Rates
The rate of interest on the zero balance account is same as that on a regular savings account. All normal transactional and non-transactional features are available in this account. You can deposit and withdraw cash at a bank branch as well as an ATM, transfer funds online and avail check book facility in this account just like in a regular account.

Eligibility
According to RBI guidelines, banks are not supposed to levy any restriction depending on the age or income of any individual who wants to open a zero balance bank account.

Limited Number of Transactions
RBI hasn't put a cap on the number of transactions. It is the banks who have come up with this. While there is no restriction on the number of cash deposits that can be made, most banks let the zero balance account holders withdraw cash four times a month, be it a withdrawal at the bank branch or through ATM, RTGS, NEFT, EMI etc.

No More than One Account
You can open only one zero balance savings account in a bank. An existing regular savings account cannot be converted to a zero balance account. If you have a regular account in a bank, you must get it closed within a month of opening the zero balance account in the same bank, otherwise the bank itself closes the regular account after a month.

What are the benefits of the forex card and how can you benefit from it?

A Forex Card or Foreign Exchange Card can make travelling overseas hassle-free for a person. Gone are the days when a person had to go to the foreign currency exchange center every time he/she landed in a foreign country to get local currency. A Forex Card allows the customer to store and electronically transfer money when he is travelling abroad. A person can also use this card to withdraw currency from an ATM located abroad when currency has been loaded into it. Their wide acceptability is due to the fact that they are registered with either the MasterCard network or the Visa network.

Furthermore, such cards can be both single currency as well as multi-currency cards. Multi-currency cards allow a person to seamlessly travel to multiple countries without worrying about cash crunch.

The various benefits of forex cards are:

• Better exchange rates: Usually, loading currencies in this card offer better exchange rates in comparison to purchasing foreign currency as cash. For example, you will usually get an exchange rate markup difference of 50 paise while using a Forex Card. The difference becomes Rs 2 when you buy US dollars with cash.

•  One major benefit of using Forex Cards is that once you have loaded in money in the card, you can stop worrying the fluctuating exchange rates. The money then will become immune to the fluctuations in currency rates and you will be able get full value of the amount that you had put in.

• Needless to say, it is much safer to carry a Forex card that comes with a chip and pin technology than to carry cash. The safeguards that are present in a Forex Card enable you to immediately block it if it is stolen or lost. The balance also becomes frozen and prevents miscreants from getting access to your account. You also have the option of activating a secondary forex card and getting your available balance transferred there.

• Forex cards allow you to carry multiple currencies at once and ensure a seamless travelling experience. Some banks in India allow you to carry up to 16 different currencies like the Australian Dollar, Japanese Yen, Hong Kong Dollars, Euro, US dollars and others.

• You will incur much lesser transaction charges by using a Forex card abroad when compared to the cost incurred while using Debit and Credit cards.

• Dynamic Currency Conversion fee will not be applicable when a person uses a Forex card abroad. This fee is charged when a person uses debit or credit cards for making any transaction.

• Forex Cards have become universally recognized and accepted. It has made life much easier for travelers. It is accepted by most financial institutions, shops, restaurants and other places.

What are the benefits of the ‘Fastag’

Every citizen of India when using the national highways of the country has to pay a form of fee in order to pass the turnpikes which are sometimes owned publicly or privately. These fees need to be usually paid in cash and this policy enables the National Highways Authority to recover the expenses incurred while constructing these roads. When drivers reach the toll tax plazas they need to slow down their vehicles and wait in the formed cues. The drives pay the tax or the fee, are given a token of recognition of their payment and are allowed to pass after it.

This age-old method of paying toll tax changed with the introduction of FASTag. FASTag as the name suggests is basically a tag that is reloadable and allows for subtraction of the toll fees automatically without having to stop at the toll tax plazas. It is a simple, convenient and efficient form of paying tax.
FASTag was introduced by the National Highways Authority of India and the method makes use of a Radio Frequency Identification (RFID) technology.

This technology links the FASTag account of the concerned driver or owner of the vehicle with a prepaid account. A tag is provided by the NHAI which is pasted across the windscreen of the vehicle. The tag is valid for five years after which it needs to be recharged once again. When making the recharge or when paying the amount of FASTag customers of this technology can make the payment through their NEFT and RTGS bank accounts. Customers can also opt for paying with their credit or debit cards or can also indulge in NET banking. This nation-wide Electronic toll collection service guarantees hassle-free driving.

Aside from the benefits already mentioned above, customers by making use of the FASTag feature can cut down on fuel cost which arises as a result of making near non-stop movements. FASTag is not only fuel-saving but also time saving as you no longer need to wait in long ques. It is very environmental friendly as it cuts down on air pollution and guarantees zero usage of paper.

Customers will be able to assess their passage and monetary transactions from their FASTag account by getting a notification on their SMS facility. FASTag is also economically beneficial as there is lowered management at the toll plazas and lowered central monitoring. Many banks across the country are by now FASTag enabled. For both old and new users there is a cash-back of up to ten percent that is being offered of many national banks in the country.

Loan calculator and bikes: Get the best loan rates

In India, a two wheeler has become quite a necessity especially in the cities, because people have to travel very long distances for work, business etc. While a lucky few can afford a two-wheeler say an Activa or a Royal Enfield, there are many individuals who have to diligently save for a very long time in order to purchase a two wheeler.

But with the introduction of two wheeler loans or bike loans, owning one has now become extremely easy. An individual in urgent need of a two wheeler can apply for a bike loan and become the proud owner of the two wheeler of his choice.

Now when it comes to availing a loan, be it for bike, plot of land or even a home, one has to ensure that they get the best loan rate along with minimum overhead charges. In this case it is important that one acquires ample information on the various types of bike loans that are being offered by different banks and non-financial institutions.

The best way to get hold of information about two wheeler loans is through family and friends who have already opted for a similar loan, or the internet. One can check out various online review portals, where a number of individuals offer comments on loan interest rates, tenure and EMI. One can also find out information on the EMI, interest rate etc. being offered by different banks in order to make a fair comparison.

When comparing the loans terms and conditions of different banks one can take the help of the bike loan calculator. A bike loan calculator will not only make calculation easy and accurate, but also allow you to make an effective comparison of the different interest rates that banks are offering. All one has to do is fill in the necessary information and hit ‘calculate’. This, way one can choose the lowest interest rate or the interest rate that suits them the best.

When considering interest rate, also note the overhead charges and fees the banks demand. Many a times banks offers a low rate of interest but their overhead charges and fees are quite high, which amounts to the same as those banks offering a much higher interest rate.

The bike loan calculator will allow you to effectively calculate the EMI and interest rate that will suit you best. Such calculators are easily available online on the websites of various banks.

Apply for a two wheeler loan today with the help of a bike loan calculator and get the best interest rates available in the market.

Steps to open a share trading account

An Indian citizen needs a Demat and trading account if they want to start trading in the share market or stock market. Two depositories, known as NSDL and CDSL provide Demat and trading accounts in our country and this is done through brokerage firms which are also known as share brokers or stock brokers. The trading account is the account where a person can place bids to buy or sell orders while the demat account holds the shares in dematerialized form. Opening a trading account is relatively easy if you follow these easy steps:

• The first step of opening a trading account requires you to find a stock broker or firm. There are two types of brokers- full service and discount. In India, people generally go for full service brokers. The services rendered by such a broker in addition to buying and selling of shares are market research and also providing advice for retirement and tax-planning. Discount brokers are new to our country. They provide a no-frill account and also charge a much lower fee when compared to full-service brokers.

• You should always compare brokerage fees before opening a trading account. This is because all brokers charge some fees or take some commission processing your investments. The charges also vary from one broker to another. Some brokers also charge fees on the basis of the amount of the investments that they handle. Some others also give discounts if the amount is high. Thus, you need to keep in mind all these factors before choosing a stock broker.

• Finally, you need to complete your KYC or Know Your Client form. This form needs to be filled up and submitted along with your documents like Voter ID card, PAN card, birth certificate, passport and others. You will receive your trade account details after the application has been checked and verified.

After opening an online trading account, a person can start trading i.e. he/she can start buying and selling shares or stocks. It can be done over the phone or via the internet.

A demat account is required for a person to trade as it holds all his/her shares in electronic or dematerialized form. A person will not be able to trade in the stock market if he/she does not have a demat account. A demat account offers benefits like reducing the risks of deliveries, reduces costs associated with stamp duty, makes it much easier to hold and there is no fear of damage which can occur in case of paper certificates and  also acts a common bank where you can keep your debt instruments in addition to shares.

Why you need to know about UPI payments?

UPI or Unified Payments Interface is all set to revolutionize the economic sector of India and you must know the nitty-gritty of this game changer. Campaigns like Demonetization and Digital India have given the objective of a cashless India a huge boost. Now, the development of UPI technology is set to give the digitization of a growing economy like India an even bigger impetus.

UPI is a technology that has been developed by the NCPI or National Payments Corporation of India adhering to the rules and regulations set by the Reserve Bank of India. The UPI technology allows you to transfer funds from one bank account to another in a cashless way through a mobile app. Now you may think that one can do the same through internet banking or mobile wallets like Paytm. That's not quite right. If you want to use online banking (i.e NEFT, RTGS or IMPS) to transfer money to an account, you must know the recipient's account number and the said bank's IFSC number. In a mobile wallet like Paytm, you can just enter the beneficiary's mobile number and instantly transfer money but only to the person's Paytm wallet and not to his bank account. UPI has struck a balance between these two transaction methods. With UPI, you can make instant transfer of funds from one bank account to another by simply entering the recipient's registered mobile number or VPA (Virtual Payment Address) and without the involvement of any third-party payment wallet. No wonder UPI has been dubbed the 'Whatsapp moment' in the banking sector of India with its instant money transfers.

Unlike RTGS or NEFT, you can avail the UPI technology 24×7 and also on public holidays. So, in case of any emergency, you transfer funds as and when needed. Unlike online wallets, UPI lets you keep your money in the bank thereby accruing interest on the sum. UPI payment is also supposedly more secure than third-party mobile wallets.

There are many UPI apps available in the market right now. The first and foremost, of course, is the BHIM UPI app developed by the NPCI itself. It is most probably the simplest UPI app available and perhaps the fastest. PhonePe is a UPI app that also doubles up as a mobile wallet. This app too is very popular and provides a great user experience. Many banks like the Axis Bank, SBI, Canara Bank and PNB have also come up with their own UPI apps. Now, it is not necessary for you to use the app of the bank in which you are an account-holder. UPI apps are independent of banks, and so you can go ahead and choose the app that will suit your requirements the most.

What are the factors that can affect the fixed deposit rates?

Money is precious to all of us. We work hard to earn money and most of us wish to save it for the future. It is due to this very reason that we invest our money in a long term fashion in fixed deposit programs. It provides high interest funds on your regular savings account till the time of maturity. The interest rates differ from bank to bank.

We understand that you wish to have the best deal of interest for your hard earned money. It is due to this reason that we understand it is imperative to understand and figure out the factors that can affect your fixed deposit rates.

We have put down 4 different reasons which may influence the fixed deposit rates of your bank account:

1) The RBI policies:


The RBI is the regulating body of all the banks in India and has the power of imposing many norms and restrictions to a maintain credit control and inflow of cash in the nation. It is due to this reason that your fixed deposit rates can be altered even though you do not expect it to.

2) Recession:

Recession is a temporary period of time in a nation’s economy when industry and trade activities diminish. It mostly happens when the GDB crashes or falls rapidly for two consecutive quarters. Due to the shutdown of the economy at the times of recession, the RBI imposes reduced rates on bank interests to release capital into the market system. This can therefore tamper with your interest rates on a fixed deposit.

3) Inflation:

Inflation is completely different from recession, where the government starts printing more money and the prices of goods increases rapidly. Due to this, often the value of the currency decreases in the world market. In situations like this, one can expect their interest rates in the fixed deposit banks to go higher.

To calculate what is going on in your fixed deposit account, several banks provide instruments like fd calculators. It considers inputs such as the deposit amount, rate of interest, and deposit tenure to find out the amount you will receive during the time of your fixed deposit maturity.

Along with that, the fixed deposit calculator gives you the chance to compare the deals given by each bank so that you can deduce which plan is the best for your money.

How to choose the best option from the NRI accounts?

A Non-Resident Indian or NRI often faces a situation where they need to maintain an account in India in Indian currency. There may be two reasons to open such an account. The NRI may want to repatriate the money earned in the foreign country back to India. Or the NRI may want to keep money earned in India in the country. NRIs can open a Non Resident Rupee (NRE) account, or a Non Resident Ordinary Rupee (NRO) account to do this. NRO accounts can also be opened by an Overseas Citizens of India (OCI), or Persons of Indian Origin (PIO).

NRE and NRO accounts’ similarities:

Both NRE and NRO accounts may be opened in Savings or Current accounts form, and are both Indian currency accounts. The average monthly minimum balance of Rs 75,000 needs to be maintained in both these accounts.

NRE and NRO accounts’ differences:

1. NRE accounts are repatriable freely, both the principal and the interest earned on it. However, the NRO account has a ‘restricted repatriability’. Remittance is permitted from NRO account up to net USD 1 million of taxes applicable in a financial year. This too is possible only after the account holder gives an undertaking, along with a certificate by a registered chartered accountant.

2. NRE accounts are free of tax in India. No income tax, gift tax, or wealth tax is applicable. The interest earned from NRO account and credit balance, on the other hand, is subjected to appropriate income tax brackets. Wealth and gift taxes are also applicable as a present.

3. If the income of the NRI originates in India, for example, salaries, dividends, rents, etc., they are allowed to deposit this in the NRO account only. Such deposits cannot be made in the NRE account.

4. NRE accounts may be held jointly with other NRIs, but not with another resident Indians. NRO accounts, on the other hand, can be held jointly with both NRI as well as another resident Indians.

With the above comparisons in mind, you can now choose the best option for NRI account for you. In short,

Choose NRE accounts if you:
• Need to keep your overseas income converted to Indian Rupees remitted to India.
• Need to maintain savings in Rupees, but in liquid form rather than as assets.
• Need to open a joint account with other NRI.
• Need your savings in Rupees to be freely repatriable.

Choose NRO account if you:
• Need to keep India based income in India in Indian currency.
• Need an account where income from India may be deposited.
• Need to open an account with a close relative who is a resident Indian.

What are the features of the NRO account and what are its advantages?

An NRI account or Non-Residential Indian account is such an account that is maintained by an NRI with a financial institution that is authorized by the Reserve Bank of India to render such services. There are two different types of bank accounts in India by which NRIs can manage their income earned in India. The two accounts are the Non-Resident External (NRE) account and Non-Resident Ordinary (NRO) account. A person can open both these accounts in the form of savings, current, recurring or fixed deposit accounts based on his/her requirements. An NRO account is basically a savings or current account to manage income that he/she earns from dividends, rent or pension from abroad. Any NRI can open a NRO account. The NRO account is generally used for domestic or local sources of income.

The benefits of NRO account are:

• It provides higher returns after tax deductions. This can be done by availing the DTAA benefit facility.

• An NRI can maintain this account by keeping a monthly balance as low as Rs 10000.

• A NRO account allows for hassle-free transfer of money through a number of online and offline modes.

• An NRI can earn from favorable interest rates. This account provides 4% p.a. interest rate if your end of day balance is equal to or greater than Rs 50 lakhs. The interest rate for end-of-day balance less than Rs 50 lakhs is 3.50% per annum.

• The interest that you earn in the current financial year is fully repatriable after deduction of taxes. For a bona fide purpose, funds in an NRO account can be repatriated up to 1 million dollars in US currency.
Unlike a NRE account, a NRO account is taxable at the applicable rate. This account also does not allow you to send money to a foreign country. The various features of a NRO account are as follows:

• NRO accounts are taxable and so various taxes like income tax, wealth tax and gift tax are applicable. However, the Double Taxation Avoidance Agreement provides some relief from taxation.

• A NRO account allows you to deposit funds from a foreign country and also those funds that originate in India. You can only withdraw in Indian National Rupees from this account.

•  Unlike a NRE account, a NRO account can be held with another NRI as well as a resident Indian. Generally, the resident Indian is a close relative of the person and this benefit is defined under Section 6 of the Companies Act 1956. Furthermore, a person can transfer funds from an NRO account to another NRO account. But a person who holds a NRO account cannot transfer money to another NRE account.

• NRO accounts are not subject to exchange losses like day-to-day fluctuations in the value of INR and conversion loss. Thus, your money is absolutely safe in a NRO account.

Is the NRE accounts the best choice for an NRI?

Non-Resident Indians or NRIs often face a situation where they need to maintain a rupee account in India while they themselves stay and work in a foreign country. Primarily, there are two reasons for this, either to repatriate money earned overseas back to India or to keep income based in India within the country. In such situation, two choices are available to them, the Non-Resident Rupee (NRE) account, or the Non-Resident Ordinary Rupee (NRO) account. Both these accounts can be current or savings accounts and are in Indian Rupees. The minimum average monthly balance needs to be Rs.75, 000 in both. While both these accounts have their own advantages, the NRE account provides some more benefits over the NRO account to NRIs. Here are some reasons why the NRE account is actually the best choice for an NRI.

Repatriability: Repatriability is the ability of assets of a citizen or investor of one country generated in a country to be moved to the home country. The NRE accounts are repatriable freely. This means that both the principal and the interest earned on such accounts are completely repatriable to a foreign account without any limit. In comparison, the NRO accounts have ‘restricted repatriability’, repatribility is allowed only up to a fixed limit.

Taxability: NRE accounts are tax-free in India. This means NRE accounts are completely exempt from income tax, wealth tax, as well as gift tax in the country. This makes for a good way to save money for emergencies as well as for future plans free of tax. Money deposited in the NRO account is taxable at a rate of 30% according to the Income Tax Act of 1961.

Apart from the above two principal benefits, NRE accounts can be opened jointly by two non-resident Indians, while NRO accounts can be opened jointly with a resident Indian as well as another NRI. NRE accounts provide a way for savings to be stored in the country in a liquid form. Funds generated in foreign countries can be deposited in both these accounts. However, funds generated in India in Indian currency can only be deposited in the NRO accounts.

Withdrawals from both NRE and NRO accounts are in the Indian currency. NRE accounts are subject to fluctuations in the international currency rate.

What is the mistakes you need to avoid when investing in mutual funds?

A mutual fund is an investment policy from a bank that gathers funds from various investors and puts in the money on behalf of these investors. Only a nominal processing fee is charged by the concerned bank to carry out the investment services.  This is a very efficient way of investing money by first timers who do not know the much about investing. This is a group effort where everyone participates by putting their money into purchasing of bonds, stocks or any other kind of securities.

Your share of the investment fund is symbolised by a ‘unit’. The units can be bought or redeemed at net asset value or NAV for short. The Net Asset Value is not constant, and the fluctuations are dependent on the fund’s holdings. So when there is either a loss or a gain, it affects all the investors equally and proportionately.

The Mistakes To Avoid:

• While investing in mutual funds India, there are certain mistakes that you should try and avoid, especially if you are a first-time investor. When you are investing, you should be aware of the risk profile by understanding the mutual fund scheme employed by the fund manager. Before investing it is advised that you should be aware of your financial situation and profile and then make the investment according to your profile and capabilities. Trying to get too influenced by other people’s investment stories whether successful or unsuccessful might not be s very good idea for you.

• A common mistake that investors end up making is timing the market situation. It is always better to aim for long-term investments of 5-7 years rather than short-term ones.

• Do not forget to review your investment portfolio from time to time. Not doing so can affect your profit or loss. Reviewing your portfolio will be a learning lesson for you and help you to better prepare for your next investment.

• A mutual fund scheme has several categories; read your prospectus thoroughly and try to get information about all these share classes. After you have done so, try to make the most of your mutual fund share classes. People end up making the mistake of not reading the prospectus due to time constraints, trusting blindly the words of the fund manager.

• Another mistake that investors make on their journey to mutual fund investment is ignoring the sales load. A ‘sales load’ also known as a ‘sales charge’ is of various kinds; front loads, deferred loads, back loads, etc. A sales load is basically the fee or commission that is paid to the fund manager who is handling your investment on your behalf. Read up on this aspect carefully before investing.

What can you get out of the gold loan?

Owning pieces of gold jewellery in India by families is very important as gold holds both emotional as well as religious sentiments. Gold is the symbol of the Goddess Lakshmi according to Indian mythology and is associated with wealth and prosperity.  The value of gold is very high and is given as presents at weddings, festivals, as birthday gifts, at anniversaries, or for any other occasion. Therefore, almost every household in India has some form of gold or the other.

Gold is considered as an asset in India and has many benefits associated with it. For example, gold can be pawned and can also be used against taking a loan. Opting for a gold loan is a quick and easy process and extremely beneficial too. Gold loans are secured loans where the gold is kept in a vault in the bank. However, in case the loan borrower fails to repay the debt amount then the bank can sell off the piece of jewellery.

The benefits of a gold loan are many; the processing time is less as compared to other loans because the bank has the alternative to sell of the gold ornament in case of default by the borrower. Gold loans are imbued with the special feature where the borrower has the choice of paying the principal amount at the end of closing the transaction and only paying the interest part. Gold loans have an interest rate of about 11-15% as opposed to unsecured loans which have a starting range of 15%, therefore applying for a gold loan will provide you with a lower rate of interest.

When applying for a gold loan, often there is no processing fee and no foreclosure fees as well. In case the borrower has a bad credit history, it is not held against the borrower when he/she tries to apply for the this loan. There is no question of income proof; the monthly income or expenditure of the borrower is not a factor for gold loan application.

As mentioned above some piece of gold jewellery or the other is owned by perhaps every family in India. Applying for a loan against your gold can be extremely beneficial in case of a dire medical, financial or educational emergency. It can be quickly availed of and has low interest rates as compared to personal loans. At the time of application you only need one authentic residential proof and one government sanctioned identification proof such as a passport, or PAN card, voter card, driving licence, passport or even a ration card.

Why term deposits make the ideal rainy day funds

A term deposit is an investment in cash held at a financial organization. You invest your money for a fixed interest rate over a fixed period of time, also called term. Term deposits may be invested in any financial institution like banks, union credits, etc. When you deposit the money, you are to understand that the money will be there for the agreed period. This period may range from 1 month to even 5 years. The interest rate is ensured not to change during that period of time. Normally, you can only withdraw this money on completion of the fixed term. If you withdraw it earlier, a percentage of it is to be paid as penalty to the institution.

Term deposit are preferred by investors who prefer security of capital and a fixed return as opposed to fluctuating investment options like the share market. Investors also use term deposits as a portion of their total investment in combination with other forms of investment. Term deposits are preferable when you have a planned expenditure up ahead in a fixed period of time. However, they may also be used as emergency funds in certain circumstances.

• Emergency funds are usually parked in savings account, from where money may be withdrawn easily. Term deposits allow withdrawal after the term is over, while a penalty has to be paid in case withdrawal is done earlier. In case of a long term deposit, the penalty is proportionately less, allowing you access to a substantial portion of your money even after paying the penalty.

• Some banks have a ‘sweep in’ facility, where you deposit money in a savings account, and when the total balance reaches over a certain amount, a fixed portion of it is transferred to a term deposit. If money is withdrawn, it is done by breaking the deposit. The advantage you get is that interest rate for a savings account is usually low, while interest rates for term deposits are high. So the money you get in return is high.

• Short-term deposits of one year serve best as rainy day funds as the money takes less time to mature but still increases in amount. The short period gives a better chance of you being able to withdraw the money without penalty in case of an emergency.

• Debt funds are short-term deposits that offer variable interest rates according to the market, but the term of deposit is very small. Also, withdrawal of money before the fund matures usually does not have a penalty.

Will your personal credit score affect your business loan application?

Many business owners require financial backing in order to start, expand the business or for business upkeep. Ready capital is extremely important when it comes to running a business.

A business loan may come quite handy for business owners who want a capital in hand to either buy more stock, expand the company or rent an office etc. But before applying for a business loan one should consider some factors that may affect their eligibility for such a loan.

Some of these factor include age of the borrower, type of business, the amount of loan that is required, the reason why one wants the loan and the most important is the borrower’s personal credit score.

While most people try to keep their personal life and work life balanced and separate, this becomes highly impossible for those who own small businesses. Now, when it comes to acquiring a business loan a number of banks do take the owner’s personal credit score into account. Thus, one does not only have to ensure that their business papers and balance sheet are on point, but also have to make sure that their personal credit score and history are made to the satisfaction of the bank.

What is a credit score and why does it matter?
A credit score is a number that is designated by a certain institution that examines and analysis one’s credit history. The higher the credit score, more are the chances of the lenders sanctioning a loan. A good credit score will make a borrower more eligible for a loan, while a bad credit score will make him less eligible.

Thus, when it comes to a business loan, especially a new business loan banks make sure to check the personal credit score of the business owner. One’s credit history and score directly reflect on their capability to return the amount along with interest. If a person cannot take care of their personal finances properly, it is assumed that they will not be able to take care of the business finances well.

Banks scrutinize the personal credit score of new business owners more carefully than old business owners, to ensure that they are creditworthy.

Individuals, who have a bad credit history are less likely to get approval for a business loan. Thus, it is extremely important that one checks his credit score and credit history before applying for a personal loan. If there are a few problems such as pending credit card bills etc. make sure that they are cleared before sending in the business loan application.

Is mobile banking the future of digital banking?

With the ever growing access to smart phones, more and more consumers are choosing to go mobile. Banking services have been made easier with the growing use of online banking. Mobile banking apps offer several advantages over the online banking system. Apart from completely changing the traditional banking scenario, mobile banking is fast becoming the new future of digital banking after online banking.

Here are some of the benefits you can enjoy through the mobile banking app today:

Manage banking better:

Traditional banking process requires you to go to the bank to make any transaction, even for something as simple as depositing or withdrawing money. ATMs made this easier, and online banking brought these activities right into the comfort of your home. However, with mobile banking, you have much easier access to your funds from anywhere and at any time. Just log into your account with your unique customer ID and password and make the required transaction. This takes away the need to be present near a computer.

Simple banking tasks:

For simple banking tasks like checking balances and transactions, you would have to go to the nearest ATM, or open your computer, log in and perform the task. This is tedious and time-consuming. However, with the mobile banking system, you can do this within seconds wherever you are. The mobile banking app is used to sign into your bank account, and you have direct access to your banking account history, transactions made, as well as the final balance, right at your fingertips.

Get real-time alerts:

The mobile banking apps are designed to track all the activity of your bank account. These include activities like funds in the account reaching a particular value or a certain amount of funds being withdrawn or deposited, etc. Since the app is directly linked to the account through the ever-present internet network, you can get instant alerts. Developers have designed the apps to provide real-time alerts for selected activities, allowing you to customize the alerts to your preference. As your mobile is portable and you can carry it around with you, you are instantly updated about your account wherever you are.

Greater security:

In order to access your bank account through mobile banking apps, you need to sign in with a unique customer ID and password, which you can change later. Keep your login details to yourself, and no other person can have to access your account. In the unfortunate event, you lose your mobile, your account will still be protected, as your personal information is password protected. At the same time, it is secured by other additional identity confirmations, like fingerprints, facial recognition, etc. Some devices and apps also have features with which you can remotely wipe out all your login details in such cases.

How to avoid these mistakes with the auto loan calculator

Innumerable banks and non-financial institutions offer car and auto loans today! While various types of auto loans are available in the market and can be easily availed, one should be careful when finalizing the terms and conditions of the loan.

Calculating the EMI of the auto loan, tenure, rate of interest and other technical details can be quite tricky for most individuals. In order to avoid calculation mistakes, one can take the help of an auto loan calculator.

An auto loan calculator is a calculating formula which allows one to play with numbers with just a few clicks. Here are a few mistakes that one can avoid with the help of the auto loan calculator-

• A number of individuals avoid making a fair comparison between various types of auto loans because they do not want to deal with the hassle of complicated calculations. This is a big mistake!
Comparing loan details and offers is extremely important so as to get the best deal in the market. An auto loan calculator allows an individual to make a fair comparison between various loan deals, the EMI, interest rate and overhead charges that will work the best for them.

• While some individuals definitely take out time and energy to make a comparison of various loan offers, calculation mistakes can lead to wrong decisions which are later regretted.

With the help of an auto loan calculator, one can definitely avoid calculation mistakes. All an individual needs to do is go online, locate a reliable car loan calculator, fill in the required spaces and hit the calculate button for prompt answers. Thus, an auto loan calculator has not only made calculation fast but 100% accurate as well.

With the help of an auto loan calculator, one can effectively negotiate the terms and conditions of the loan. The calculator often comes in handy when one wants to try out a combination of options to find out what works best form them.

In fact, the auto loan calculator is of great help when one wants to negotiate the rate of interest on a car loan. One can quickly calculate the EMI and tenure of the loan on the particular interest rates, and renegotiate with the lender on the spot.

Thus, it is very important that a borrower makes use of the auto loan calculator to avoid certain essential mistakes when availing a car loan. Make an effective comparison and be careful to negotiate the loan terms and condition, keeping in mind that the interest rate and overhead charges are fairly incorporated.

Why do more women need to buy health insurance?

An individual’s health insurance should essentially be formulated as per specific needs. Thus, it should be tailor-made depending on a person’s finances and the health issues that he is likely to suffer from. This is primarily why men and women should have separate health insurances.

Recent studies have revealed that about 80% of the women in the country do not have their own health insurance, even though they are financially independent. But one has to realize that a medical emergency or a chronic illness does not really announce itself before it arrives. Medical treatment today can really drain out one’s hard earned money. Therefore it is important that both men, as well as women, apply for medical insurance.

Here are a few reasons why women generally do not get themselves covered by medical insurance-

1. financial dependence
Most of the women in India are well educated and literate. In fact, they may be earning a good sum of money as well. But women in the country even today generally depend on their spouses or a male member to take decisions that concern budgeting and finance.

While prior to getting married it is their father, after marriage it is generally the husband making money-related decisions.

2. No awareness
In India, health insurance is not given much importance because many people are yet not aware about the perks of being insured.

3. No employment, no insurance
In India, the only insurance people seek are group covers which are generally offered by corporate or public sector employers. While women who work do enjoy the benefits of this type of insurance a majority either work from home or are full-time wives or mothers, without an insurance plan.

Here are a few reasons why women should opt for a health insurance-

• Their lifestyle is comparatively more sedentary.
• Women are more susceptible to critical diseases like breast cancer, diseases of the heart or osteoporosis.
• Most health insurance companies also offer maternity benefit as a part of the plan. This may come in handy in case a C-section is needed at the time of birth.
• Accidents are also covered by a health insurance plan.

Opting for a health insurance does not only offer a person medical security, but a chance to make a positive investment- an investment towards one’s well-being. Moreover, it is also a great way to save taxes, as medical insurance generally provides a number of tax benefits to an individual. 

Choose a reliable insurance company offering and effective health insurance plan for women today!

Net banking versus Mobile banking: What are the benefits?

In a world that is going increasingly digital, we all live fast-paced lives that do not leave us much time to do anything redundant. So, instead of disrupting our busy schedule to physically visit a bank, we prefer to use net banking from the comfort of our own home or office. Now, what about those who want to attend to all their banking needs on the go? This is where mobile banking comes into play.

A digital user prefers banking to be fast and convenient. And that is exactly what has happened with internet banking and mobile banking. This digitization of banking started with internet banking that brought our banks to our fingertips. Earlier, we would have to visit a bank even for something as simple as the transfer of funds between accounts. But now we can do that and so much more than sit on the sofa or lay on the bed at home by the virtue of online banking. All you need is your unique customer ID and password, and you can access your account round the clock and make transactions as and when needed. Credit card payment, loan repayment and mutual fund debits and all other possible transactions fall under the purview of internet banking. Net banking facilities are available round the clock and simplify banking to a huge extent.

Mobile banking is the same, only that it comes in handy even when you are travelling. Net banking is typically used via a browser on the customer's computer or laptop. A computer is not mobile and we seldom carry our laptops other than during business trips. You may need to do an emergency transaction at any point in time and mobile banking will help you to do that. It really is like internet banking, just that you do it on your smartphone using your bank's app. Be it a transfer of funds, phone recharge or bill payment, your mobile banking app is really your one stop shop for all your banking needs. Mobile banking allows the users to make transactions 24×7 from any place. You may be travelling or killing time at the railway station or airport, the mobile banking app is always available and comes handy.

Internet banking and mobile banking are the two sides to the same thing really and both have given the objective of a cashless Indian economy a huge impetus. While net banking is the perfect banking solution for us when we are at home or office, mobile banking is sometimes even more useful for a digital user who is frequently on the go.

What are factors that can affect your EMI value?

Banks offer a number of different loans to people for a range of different purposes. People normally apply for a personal loan, a car loan, a home loan, a business loan or an education loan. However, it is of utmost importance to calculate the EMI using an EMI calculator on his/her loan before borrowing. He/she needs to understand what factors influence his/her EMI value and how the cost of the EMI is actually calculated. EMI or Equated Monthly Installment is the fixed amount of money that is to be paid to the bank or lender by the borrower. This instalment is to be paid by the borrower until the entire amount of the loan is repaid. The EMI basically consists of two components: the principal amount and the interest on that amount. The interest is divided across every month of the loan repayment period. A person can use an EMI calculator to calculate the monthly instalment that he/she will have to pay.

The main factors that affect the EMI on loan are:

• Principal – This is the amount of money that you have borrowed from a bank or from a lender. This is one of the most important factors while calculating the instalment that you have to pay. This is because the interest is calculated as a percentage of the principal.

• The second factor that affects the EMI is the interest rate at which the money is loaned from the bank. You should carry out some research and understand what factors will affect the interest rates. Getting a loan at a good interest rate is essential as it will have a direct bearing on the amount of money that you have to pay to the lender every month. The interest rate on any loan depends on factors like credit score of the individual, the amount paid as initial down payment, the tenure of the loan and whether the rates are adjustable or fixed.

• The third factor is the tenure of the loan. This is basically the period for which you have taken the loan. If you want to pay smaller amounts every month, you can opt for a longer loan tenure. Similarly, a person who has availed the loan for a shorter duration of time will need to pay a higher sum of money every month.

The EMI value may change when you are paying back the loan. Some of the reasons that may cause this are if you have made partial repayment of loan, if there is a change in the rate of interest in case of a floating rate of interest or if you have chosen flexible EMIs.

Influencing your child’s financial behaviour for the best education loan

Higher education can be extremely costly when one pursues his/her studies from an institute of repute. It would, therefore, be wise on the part of the parent/s to plan in advance. In the present time, an education loan has become almost necessary for parents to give higher education to their children. Such loans are generally granted to meritorious students whose family members do not have the capability to fund their education on their own. An extremely important benefit of education loans in India is that the bank or financial institution will give a person time after completion of his/her course to get a job and then repay the loan.

The eligibility criteria for getting an education loan are as follows:

• Firstly and most importantly, the candidate has to be an Indian National.

• The person must have gotten admission via an entrance test for a higher education course in an institution of repute in India or in a foreign country. However, if the student has taken admission in an institution without sitting for an entrance test, the bank can decide on the criteria of employability and also take into account the reputation of the college/university.

• Generally meritorious students are given this loan even if they get admission under management quota.

One of the most important benefits of an education loan is that interest that is paid on loan can often be subtracted from your income and this helps to reduce the amount of tax that you have to pay. This benefit traces its origin from Section 80C of the Income Tax Act. The tax deduction is on the income tax filing and not on the other taxes paid.

Some other benefits of an education loan are:

• A person is not required to pay any early repayment fees for his/her student loan.

• You can take advantage of lower interest rates if you make your loan repayments on time.

• These loans are very flexible in the sense that individuals can take their time to repay the loan. However, the interest to be paid increases if someone takes a longer time to repay the loan.

• You do not need to mortgage anything while availing an education loan. However, a guarantor is generally required.

• Depending on the discretion of the bank, a student loan can also cover tuition fees, travelling expenses and even hostel fees.

• Education loans can be taken to pursue different courses like diplomas and other professional courses as long as they are taken from a bank or financial institution for the purpose of higher education. Necessary documentation may be required to be furnished to the bank.

The RBI has fixed some ceilings regarding the maximum amount that a person is eligible to get as an education loan. For studying in India, the maximum amount that a person can get is Rs 10, 00,000. On the other hand, the maximum limit is Rs 2000000 for students who want to study abroad. Education loans are one of the best options for meritorious students to continue their studies.

GST Made Easy: Important factors you need to know

The GST or Goods and Services Tax was implemented in all parts of India on July 1, 2017. GST is a destination based tax that is being hailed as a turning point in Indian economy. GST replaces numerous Central taxes like Excise Duty, Counter Veiling Duty (CVD), Service Tax, Special Additional Duty of Customs (SAD), other charges and the state taxes.

GST was introduced to get rid of tax cascading both at the Centre and in the state to reduce the tax burden on the common citizens of the country. It simplifies the tax system with an integrated Goods and Services tax that is the sum of Central GST (CGST) and State/Union Territory GST (SGST/UTGST).  GST ranges from 0% to 28% and the tax slabs are fixed at 5%, 12%, 18% and 28%. Petroleum products, alcohol and electricity have been kept outside the purview of GST. Now a lot of changes have been made to the GST guidelines since it came into being on July 1. Keeping that in mind, here are the important factors you need to know about the gamechanger that GST is.

• Earlier, a total of 228 items were in the highest 28% GST slab. Now the number of items in that slab has been reduced to just 50. Only sin and luxury goods are currently in the 28% tax bracket and the rest of the daily use items have been shifted to the 18% tax bracket.

• Eating out has become much cheaper as restaurants now impose a GST of 5% as opposed to the 18% they charged earlier. Only five-star restaurants at starred hotels where rooms cost above Rs. 7,500 charge 18% GST and can also utilize Input Tax Credit (ITC) benefits. Outdoor catering also falls in the 18% tax bracket and can take advantage of ITC benefits.

• 13 commodities have been removed from the 18% tax slab and shifted to the 12% tax bracket.

• Two things have been moved from the 28% tax slab into the 12% GST bracket and six articles have been moved into the 5% bracket from the 18% bracket.

• Armored vehicles and wet grinder have been moved from the 28% tax bracket to the 12% tax bracket.

The financial experts, industrialists and businesses have welcomed the revised tax rates. They hope that the revised and reduced rates will increase consumption which will result in the growth of the retail industry and the consumer goods sector.

All you need to know about co – branded credit cards

There are so many credit cards available in the market today. Currently, more than 30 million people in India using credit cards; the demonetization of Rs.500 and Rs.1000 notes and the Digital India campaign have given a huge impetus to the usage of credit cards in the country. Now, there are so many different types of credit cards that it can be quite a task to choose one from the lot. There is a special variety of credit cards called the co-branded credit cards that offer some additional benefits. A bank or financial corporation and a retailer come together to launch a co-branded credit card that provides some special benefits to regular customers.

If you are loyal to a particular brand or retailer, a co-branded credit card might actually get you some financial benefits. Co-branded credit cards can be used like regular credit cards all over the world; when you use the card to buy something from the sponsoring retailer, you earn attractive discounts and rewards. Some of the cards even offer 10x rewards including cashbacks, refunds and discounts. Co-branded credit cards are not just beneficial for the card-holders but also for the banks and the merchants as it ensures building a large customer base. Most such cards do not charge any transaction fee and are also known for waiving surcharge. Among all the cards that are out there, the airline and fuel co-branded credit cards are the best and can be the most rewarding. Every time you use an airline credit card, you win points that you can later redeem against you next ticket purchase. If you are a frequent flyer, a large number of points accumulated over a period of time can even result in a free class upgrade.

Now co-branded credit cards can charge high annual fees and the rates of interest can be slightly higher than that of regular credit cards, So, before getting a card, make sure you have full understanding of the fees and hidden charges because then only you can figure out the actual financial benefits that you can enjoy.  Almost all the major Indian banks have co-branded credit cards that offer many facilities.

Almost all the major Indian banks have co-branded credit cards that offer many facilities. It's not about choosing the best credit card in India but about choosing the right one for yourself.  You should choose a co-branded credit card depending upon your needs so that you can reap its benefits to the fullest. Go through the terms and conditions of each of the cards and then choose on wisely to make some clever savings.

Should you park your emergency funds in a liquid or savings account?

Savings account is a simple traditional bank account where money is saved with a fixed rate of interest. Liquid assets refer to your properties, both immovable (homes, land), and movable (furniture, vehicles, etc.). By selling assets, its value is converted to cash or the ‘liquid’ form, meaning you can use it directly in the market.

So if you are trying to save money, you can either save it in liquid assets, or you can opt for a savings account. In most cases, going for a savings account provides many advantages over liquid assets.

• Savings account give you interest at fixed rates on the money you save in the savings account. More you save, you get more returns as interest, effectively increasing your funds. This is the greatest advantage of a savings account over liquid assets.

• Savings accounts have a small minimum balance requirement, which means you can start saving with a small amount of money and keep adding to it as you save along. The interest you get also multiplies your funds.

• Savings accounts do not need a fixed rate of saving money. You can deposit whatever little amount you save in your savings account anytime you want to save some money, adding to your funds little by little.

• As the saying goes, ‘Little drops of water make up the huge ocean’, saving your money in a savings bank account slowly builds up your funds over time into a considerable amount. During emergencies, this money is readily available to you in bulk to use however you need to.

• Interest on money deposited in savings accounts is tax-free up to a certain amount.

• When kept in liquid assets, money is more likely to be spent easily. If you had been saving it for an emergency, spending it on something tempting would not be a very good decision. When kept in a savings bank account, your money remains yours, but you are less likely to spend it on a whim.

• Saving your funds in a savings bank account protects your money from untoward incidents. Liquid assets may be stolen, may be lost or misplaced, or may be vulnerable to calamities like natural disasters. This can be devastating, especially if the money you saved was for emergency purposes.

When stored in a bank, your money is safe and secure, giving you complete peace of mind.
Therefore, if you are looking to save some money, savings accounts provide a far better option than liquid assets.

Why should you avoid multiple personal loan applications?

A financial emergency can occur at any time, and a personal loan can really help an individual get out of a sticky situation. But when applying for a personal loan, one should ensure that they do not send in their application to multiple banks.

This should be avoided primarily because it can lead to the rejection of the personal loan application.

What is a personal loan?

A personal loan, popularly also referred to as an ‘unsecured loan’ can be opted for in case of an emergency situation. A personal loan is given without any security, thus banks do not ask for collateral when one applies for this type of a loan, instead they sanction the loan amount depending on the credit score and history of the loan applicant.
The rate of the interest in case of a personal loan is generally higher in comparison to other types of loans. This is primarily because it is an unsecured loan.

Why should one avoid multiple personal loan applications?

As a personal loan in India is an unsecured loan, banks generally make a thorough inspection of the CIBIL score of the applicant. If the CIBIl history and score show multiple applications of a personal loan made to different banks, the lender will assume that the loan applicant is credit hungry or has been previously rejected by other banks. This will definitely lower his loan eligibility and his application may be rejected.

Thus, one should first find out detailed information about the personal loans offered by various banks. This would include the rate of interest they offer, loan duration and overhead charges. Once this information is collected, make a fair comparison between the banks and choose one bank that you want to send in the application to.

If that bank rejects the application then you may consider submitting a personal loan application to a different bank.

In case you are applying for a personal loan via the ‘direct sales’ passage of various banks, make sure to inform them to avoid applying to various banks at the same time.

There are times when an individual does not have a great credit score, because of the lack of a credit card or he has not taken any other loan before. Even so, banks consider the application of the individual and sanction personal loan in India. But in this case, if the individual applies for the loan in multiple banks there are high chances that he will be rejected.
Thus, one should be careful when applying for a personal loan. It is important to consider all the factors before sending in the application.