Here are the steps you can take to sanction yourself the much required business loan

Some people are just not cut out to serve under other people. They are born to be leaders and entrepreneurs. Making an individual empowering identity by building a business of his or her own. Not always are people equipped with the right amount of capital for the business plan. So are in need of business loans. But there are a lot of factors to be pondered on before one can actually start off with his own business. Following are the parameters one should get sorted well before they get in their business.

Decide if you are in need of business loan at all

Wait! Think and decide if you are in need of a business loan at all on the very first step. Before you approach a lender; think and analyze the exact amount of money you require to borrow, for how long will you need, whether with your business plan, if you’ll be able to afford to repay the loan, the rate of interest applicable to the business loan, or ongoing fees that comes along with the loan and last but not the least, the security deposit required against the loan. You may refer to the online repayment calculators to get a clearer view.

Chalk out the business plan in full details before visiting the lender

It is more than obvious that the lenders will ask you a lot of in-depth and minute details about the business you are planning to get in. Thus, it is really important that you are able to come up with a convincing and detailed business plan which should include a profit and loss budget and cash flow insights. Try to include as many past and future plans in relation to your business, and even the kind of people who’ll be working in it. Don’t forget to consider the probable market scenario. This information will enable your lenders to assess your business plan or project.

Most importantly the risk assessment

You won’t be sanctioned the business loan without the risk factor being considered. Be it the banks and nay other lenders, anyone, and everyone will have a look at risk factor involved in your business plan, before sanctioning your business loan application. For this, you need to be able to assess the expected amount of cash inflow against your business will come in under specific circumstances, apart from the probable profit and future prospects of your business plan. It will also how effective you are as a manager.

Security deposit against your loan

Loans can be secured by depositing various types of assets like residential property, commercial, rural property or any other form of assets. Lesser value of security deposit means higher interest rates.

Here is all you need to know about what it is to own an ATM card

An Automated Teller Machine (ATM) card is a kind of payment card is issued by financial institutes that enable a customer to access in order to perform transactions like cash deposits, cash withdrawals, accessing your account information, etc. The very first ATM cards were issued by Barclays in 1967 in London.

ATM cards are also known as bank cards, Money Access Card (MAC), client card, key card or even cash card. Even though ATM-only cards are available, you can always use your payment cards like debit and credit cards as ATM cards, etc. But remember that charge and proprietary cards cannot be used as ATM cards.

You need to understand that the use of a credit card to withdraw cash at an ATM is different from a Point of Sale (POS) transaction, which involves interest charges from the date of the cash withdrawal. POS transactions involve customer making payment to the merchant in exchange for goods or after provision of a service. Inter bank networks permit the usage of ATM cards at ATMs of private operators and financial institutions even for other than those of the institution that issued the cards.

With dimensions somewhere around 85.60 × 53.98 mm (3.370 × 2.125 in), ATM cards are also used as “mini ATMs” and merchants’ card terminals where you get to operate ATM features without any cash drawer.

Look wise, a debit card is just like another regular ATM card, rounded corners with a radius of 2.88–3.48 mm. The basic feature that a debit card holds is a Visa® or Mastercard® logo on its face. That means you can use a debit card wherever Visa or Mastercard® debit cards are accepted, for example, department stores, restaurants, or online.

Miscellaneous uses of ATM cards
• You can always use your ATM cards at any bank branch, as identification for in-person transactions.
• Use your ATM cards at ATM booths for banking transactions regarding cash deposits, checking available balance and ledger amount in your account, cash withdrawals, transferring money between different accounts etc.

In order to check the ever increasing production of illegal copies of ATM cards with a magnetic stripe, the European Payments Council established a Card Fraud Prevention Task Force in 2003. This made all the ATMs and POS applications to use a chip-and-PIN solution till the end of 2010. One can check that the “SEPA for Cards” has severed off the magnetic stripe from the Maestro debit cards.

Some banks have clubbed the functions of ATM cards and debit cards into a single debit card, or what is also known as a “bank card”. These are capable of carrying out banking operations at ATMs and also make point-of-sale transactions, with the use of a secret PIN which is known only to the customers.

Demat vs trading account: Do you know the difference?

The stock market is one source that will earn you with handsome returns on investment. So if you are prepared to invest in this industry, you will need to be well prepared and strategize each investment decision you make. The first step you will need to take is undergoing considerable research about the different accounts required for stock market training.

For those who aren’t familiar with this financial market, the trading account, and the Demat account can be confusing. Given below are the details for these different accounts:

What is a Demat account?

As per the government regulation, all shares post 1996 have to be converted into an electronic format. In order to store these electronic shares, you will need a specialized account, which is the Demat account. In order to invest or sell shares on the market, it is crucial that you open this account. However, this account can only be used to store the shares and no other purpose.

What is a trading account?

In order to buy or sell shares, you will need a trading account. This account comes with a unique trading ID which can be used to conduct transactions whenever required.

What is the relationship between these two accounts?

The trading account is the medium between the Demat account and the stock market. When you make a transaction, you will need to use your trading account. Once you purchase a stock, it is stored in your Demat account. Your stocks also get deducted from this place when you sell any shares.

What do you need to remember when opening your account?
Before you open the account, you will need to choose a depository participant. The DP can be in the form of a bank, brokerage, or any other financial institution. You will need to fill up the details of the account opening form and submit the relevant documents. You will also need to undergo a personal verification process, wherein which, you will be provided with an account number and ID. After this, you will need to link your bank account with your trading account, which will help you in transferring funds to make your transactions.

What are the benefits of having a single depository participant?
While there is plenty of options available option in the financial market, it is best to opt for a single DP. Most institutes that offer this service often offer a trading account for free when you open a Demat account. Additionally, the maintenance charges for these accounts will be either cheaper or waived off depending on your trading activity. In this way, you can earn more while getting your funds transferred quickly.

Important factors you need to remember about the RFC account

A resident foreign currency account is a type of saving account that is maintained in foreign currencies. This is the best account for those who have returned to India for a temporary yet long basis, with foreign funds to be invested. This type of account has plenty of benefits, especially since it can be held as a term deposit. This term deposit can further be converted into an NRE or FCNR account when the account holder’s status is converted back into an NRI. This account also holds funds that are freely repatriable.

However, before you open this type of account, there are certain factors you will need to understand:

1. Like the FCNR termed deposit, this account can be used to maintain foreign currency. It can also be used to continue to earn interest.
2. The account holder can maintain the account in the form of current, savings or termed deposits as an individual. In other forms, he can hold it in the current or term deposits.
3. The funds and interest earned on the account can be easily remitted to account overseas.
4. The RFC account can be held jointly. However, it can be held only with close relatives. However, these individuals do not have the power to operate the account during the lifetime of the account holder when he returns to the home country.
5. Not all banks or financial institutes will allow you to invest certain foreign currencies. In most cases, GBP, USD and Euro are some of the common currencies allowed.
6. A pension that is earned abroad can also be deposited in this account.
7. You can use the funds from this account for any local payments. When the required funds are withdrawn, it will be converted to the local currency before being deposited in the residents saving account.
8. Once your status gets converted into an NRI, your RFC account will also be converted into an NRI account. However, you will need to inform your bank of the status, in order to enjoy the benefits of this NRI account.
9. When withdrawing funds from the RFC account in India, the amount that is withdrawn will be converted into the value based on the current exchange rate of the foreign currency and Indian rupees.
10. In the first two years, there is no TDS from you RFC account. Additionally, most banks provide an automatic renewal and nomination facility for the fixed deposits for RFC account

As you can see, the RFC account has plenty of benefits for those who are returning to India for a short period of time. This account is your best choice to invest any of your foreign currency for a short period of time. In the occasion you need to return back to a foreign country, you only need to inform your bank of the change of status. In this way, you can continue to enjoy the benefits of the NRI account.

FAQ’s of FCNR interest rates and taxation you would need to know

Most NRI’s look for options that allow them to invest their foreign currency. Amongst all the different options in the NRI accounts, the foreign currency non-resident bank account is one of the most favourable options. The FCNR can be held by an NRI in a foreign currency while earning interest on the investment.

One of the benefits of this account is that it is free from currency fluctuations. In other words, this account can be held in foreign currency, which is free from the volatile conditions of the market. Thus, this allows the investor to earn favourable fcnr interest rates on the investment, especially if the currency of residence enjoys a high conversion.

However, since this an NRI account which earns interest, there is a question whether the interest that is earned in liable for the tax. If so, the favourable fcnr interest rates will be pointless as the most of the funds that will be earned, will be deducted. Given below are details of the FCNR account interest rates and the taxation process involved with it.

How is the taxation process of the FCNR account based on?

Taxation on the FCNR interest will be based on the applicant’s status. The interest that is earned in the FCNR account is tax exempted, so long as the account holder enjoys the status of an NRI or a non-ordinary resident. Once the status of the applicant changes to a regular ordinary resident or ordinary resident, the interest return on investment will be taxed, based on the global income in India. In other words, the interest that is earned on the FCNR deposit will be taxable in India.

Is the double tax avoidance agreement applicable for the FCNR?

Certain NRI accounts are applicable to taxation under the residency laws as well as the Indian laws. However, with the double tax avoidance agreement, the tax deducted at the source will be reduced.  Although the interest that is earned in the FCNR is not taxable, certain countries like the US, levy tax on the global income of its residents and citizens. In other words, an account holder would need to add this interest to the total income earned in the tax returns, and thereby pay the required taxes.

When a non-resident returns to India, what happens to her FCNR deposit?

When an NRI returns to India, the first step the applicant would need to do is inform the bank. On informing the bank, the institute will take the necessary steps to change the status from an NRI to the resident so that the FCNR bank account can be converted into a resident account. Once this is done, under the Indian tax laws, the interest income that is earned by an applicant is tax exempted, only if he or she enjoys the status of ‘ a person resident outside India’. Therefore, the interest that is earned in the converted FCNR will be taxable. Additionally, the account holder will not be able to enjoy the benefit available to the FCNR account anymore.

How to send an inward or outward telegraphic transfer today

Bank transfers, also known as telegraphic transfers are one of the many types of money transfers. It is also one of the cheapest forms of money transfers. Although telegraphic transfer was a popular mode of transfer of funds electronically before the year 1990s, it is used even today by plenty of businesses.

Through this form of money transfer, funds could be transmitted from one bank to another through the means of a cable message service. Today, this form of transfer is still followed, with offerings of inward or outward transfers. Here is all you need to know about the difference in these services and how you can benefit from it:

Inward telegraphic transfer
An inward telegraphic transfer, also known as inward wire allows a sender to transfer funds from an overseas location which is converted to the local currency. One of the benefits of this account is the low receiving charges, especially when compared with the other transaction charges from other banks.
You can easily make this transfer through the online portals, provided by plenty of banks. In order to arrange an inward telegraphic transfer, you will need to follow these steps:

1. Apply for an inward telegraphic transfer request
2. Choose the country you will be receiving funds from
3. Provide the relevant details in the online form and submit it.
4. Once all the relevant details have been filled and submitted, you will be provided with the deposit instructions. You must save these details as a reference. Additionally, you will need to contact the individual who is sending you the funds.
5. Once you have contacted the sender, you will need to:
a. Provide them with the instruction to their bank in order to arrange the funds being sent to you.
b. Ask the sender to deposit the amount in their local currency in the account you would want.

Outward telegraphic transfer

Like the inward telegraphic transfer, you can also send funds abroad. In order to make an outward telegraphic transfer, you will need to take the following steps:

1. Request for an outward telegraphic transfer
2. Provide details of your residential address along with the residential address of the receiver along with details of the account. These details will include:
1. The receiver’s bank full name
2. The receiver’s bank full address
3. Account number
4. The receiver’s name
5. Residential address
6. You may also need to provide the following details depending on the country IBAN, bank code, National ID number, company number or ABA or routing code.

One of the many benefits of this mode of transfer is that you can track the transfer. This trace can be done anywhere between 5 days to a week after the time has elapsed from the date that the order was placed. This can be done by request of the sender.

Finance and settling abroad: Why the NRO account is your best choice

More and more individuals are travelling abroad for better employment ventures. Some even travel abroad to settle down with their families who have been employed abroad. No matter the reason, if one has a lot of financial investments, one would need to take the appropriate decision to either reinvest in NRI – appropriate option or opt to withdraw the funds completely.

So what are the available options for this kind of situation? For this case, the NRO account has been provided. Here is how this account will assist you:

Account to invest income generated from India:

The real estate market in India is a thriving industry. Therefore, it comes as no surprise that plenty of individuals have invested in this market for a healthy return. Government regulations allow this investment to continue, especially when settled abroad. However, in this case, the individual must invest these earning in the NRO account. In order to do so, you must inform your bank about your migration plans and take the necessary steps to convert your regular savings bank account into NRO savings account.

Account for termed deposits:

If you possess termed deposits such as a recurring or fixed deposits, you will need an account to deposit the interest that is earned. Additionally, if your deposit needs to be deposited after it reaches maturity, you will also need an account for this purpose alone. Keep a track of your maturity and interest dates to take the necessary steps. Convert your regular savings into the NRO account so that you can deposit the interest earned on this account.

Paying off previous debts:

If you previously hold any financial debt that needs to be paid off, you will need an account that allows a flexibility from abroad. Through the NRO account, you can continue to pay off your previous debts, without suffering from any additional costing due to overseas expenses.

Insurance

It is imperative to have insurance irrespective of where you live. This is crucial, even when you travel abroad. With your life insurance, you either continue with the existing plan or opt for a new plan in your residence country. As compared to the insurance plan in India, the plans abroad are considerably cheaper. However, insurance plans such as home insurance will require local funding. This is where the NRO account will be useful.

Multiple investment profiles:

Multiple investment profiles are a great way to ensure that you have a good income. However, each profile will undergo a change, when your residency status changes, as given here:

• Mutual funds or ongoing systematic investment plans will continue with funding from an NRO account. However, this differs depending on the financial institute you are investing in.

• Previously held PPF’s can be continued. However, as an NRI, you will be unable to invest in a new PPF account.

• You can invest in shares and bonds through certain portfolio investment schemes of the RBI. You will need to submit a certain set of documents before transferring the existing shares to this new profile.