What are the financial products you need to invest in to secure your future?

If you have started to earn and contented about your finances, there are several reasons why you should be concerned. In failing to invest in the appropriate investments and policies, plenty of individuals will lose out several financial advantages, in terms of better premium rates and tax exemptions.

However, that is not all there to know about it. You will feel the pinch when you reach your 40’s, where lack of savings and proper investments will lead to financial vulnerability as your expenses will rise. To avoid such a potential situation, here are a few financial products you need to invest in:

Life insurance: The first product you need to invest in is life insurance, especially if you have dependants. With a life insurance policy in place, your family will be financially protected, in the event of your demise. For the best and financially flexible insurance option, you can opt for term insurance. To ensure that your family gets enough funds to compensate for the loss of income through your death, opt for a high sum. You can calculate the sum based on your requirements, potential rise in prices, day to day expenses and goal amounts.

Health insurance: Afterlife insurance, your health insurance is the next important investment. Statistics have indicated that India’s medical inflation is higher than the global average. No debt investment will pay your more than this figure. Therefore, once you have begun paying for your loans, you will need a financial protection against hefty medical bills. While health insurance will protect you during a medical emergency, in the long run it will help protect your savings in the long run. Opt for an insured sum that is enough for you and your family, based on your lifestyle, health and family medical history.

Recurring deposit: You need to create a recurring depositwith your bank, especially in the bank where your income is being deposited. In this way, you can end up saving each month. This will also stop you from spending everything that you are c earning, leading to a steady saving. Additionally, it will help you manage your budget better, allowing you to invest in other investment options. You can even increase the amount you invest in each consecutive year.

PPF account: Like the recurring deposit, the PPF will give you plenty of benefits on investment, especially when it comes to tax benefits. You can first claim deductions under Section 80C for contributions. Secondly, the interest you earn on income is tax-free. Lastly, the lump sum you receive at the end of the tenure is also tax-free. All in all, by investing an amount of Rs. 1.5 lakh per year, you can save at most roughly Rs. 47.86 lakhs over a period of 15 years.
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How can you avoid TDS on your fixed deposits?

Amongst the different financial products available in the market the fixed deposit is one of the most popular options. For one, you can invest a large and fixed amount for a fixed duration. You also get a return on investment at quarterly, half yearly or yearly tenures. At the same time, your investments will be kept well protected against the volatile conditions of the market, as the rates are locked in at the time of investment. To get the ideal investment option, you can always use the fixed deposit calculatorto calculate the ideal amount that you would require.
But while this investment offers you the ideal returns, there is one factor that will put a crimp into your investment. The interest you earn on your bank fixed deposits is fully taxable under the tax deducted at the source (TDS) scheme. Under this, banks are liable to deduct TDS at the rate of 10% on the interest earned, especially if the interest earned is more than Rs. 10,000. Additionally, if you do not submit your permanent account number (PAN) with the bank, you are liable for a deduction at a rate of 20%. The only way to claim the TDS deduction is by filing an IT return and waiting for your refund to be deposited back.
In order to avoid getting into such a situation as this one, you can incorporate the following steps to avoid TDS:
Submit form 15G or 15H: The first step you can take to avoid the TDS, is by submitting Form 15G/15H with the bank. Depositors whose total interest earned for the year is below the exemption limit along with total tax payable for the year is zero, can submit these forms to avoid TDS. These forms are self – declaration forms, that can be submitted by an individual stating that his or her income is lower than the taxable limit. Form 15G is normally provided for individuals below the age of 60. Similarly, form 15H is for individuals above the age of 60.
Distribute your investments across banks: As per the TDS policy, if your interest income exceeds more than Rs 10,000 you are liable for TDS. This will only occur if you have invested a high amount in a single or multiple fixed deposits in a single bank. Thus to reduce your income earned you can invest in multiple banks. You can use the fixed deposit calculator to calculate the ideal amount that will offer you the highest return, and yet avoid being in the TDS bracket.

Time your investments: Another alternate option you can consider is the interest that is being deposited. You can time the interest deposit in such a manner, that it doesn’t exceed Rs. 10,000 in a single financial year. For example, you can invest a lot of funds, with 12-month tenure in October. Since the financial year will close on the 31st of March, the interest will be split in two financial years, thus avoiding TDS.

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What are the key differences between the saving and the current account?

Earning a high income is as good as depositing it in the right financial products. For one, you can always deposit it in the savings or current account. Each of these accounts has different features, requirements and benefits.
However, to make the most of thesediverse attributes, you first need to know the key difference between them. Given below is all that you need to know about the saving and current account in the bank.

• The saving account normally refers to the account that is mean for individuals who want to keep their savings for further financial requirements. The current account, on the other hand, is an active account, which is most beneficial for day to day economic transactions.
• The saving account is designed to encourage the savings of the general public. The more funds are invested, the more the benefits the account holder will receive. On the other hand, the current account ensures frequent or regular transactions are made by the account holder.
• The saving account is most appropriate for salaried individuals. It can also be held for selected parties such as clubs, trust or an association of persons amongst many others for regular savings. With the current account in the bank, it is perfect for business entities, government departments, institutions and societies and other similar institutions, as they need to deal with monetary transactions on a daily basis.
• In the case of the accounts for savings, there is a restriction on the number of daily and monthly transactions. If the transactions exceed the specified limit, additional charges may be applied. In the case of the account for current, there is no restriction on the number of transaction amounts.
• The saving bank account offers interest on investment. In other words, depending on the amount you have in the account, you can earn an interest of 4 to 8%. However, the current account does earn interest.
• Certain benefits like passbook facilities are provided by the bank on the account for savings. This helps in listing the number of debits and credits, to and from the account. It also helps keep track of each transaction date wise. With the current account, no passbook is issued by the bank to the holders of thecurrent account.
• An overdraft facility is provided only to the current account. This helps businesses manage their accounts during crucial transactions, even though there is a low amount of funds invested in the account. This service is not provided to the savings account.
• Saving accounts require a minimum balance amount to open it. In contrast to this, the current account will require a high amount to start the account.

These are the key differences in the account. In order to make the most of your investment in either account, you can utilise these differences with the right investment amount and strategy.


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Saving vs. salary account: Do you know the difference?

There is a considerable difference between a salary account and a saving account that not many individuals are aware of. At first glance, you will find similar features. However, there are a few differences between both accounts, which extended to their features. They include the following:

Salary account: As the name suggests, the salary account is basically opened by an employer. It is mainly used to credit salaries to the account. One of the main benefits of the account is that there is no requirement to maintain any minimum balance. Some banks even offer different types of salary account, based on the salary you normally draw. In this case, however, the amount that is maintained in the account will not be entitled to theinterest rate. At the same time, your salary will need to be creditedto the account for a consecutive three months; else it will be automatically converted into a savings account. Automatically, you will need to maintain a minimum balance in the account. Some of the common facilities provided on this account include a debit and credit cards with a higher limit and beneficial offers on loans amongst many others.

Saving account: The saving account can be opened by any individual. The main purpose of the account is to encourage savings. Under this account, there are several types, based on the services you want. However, you will need to maintain a minimum balance in this account. Failure to maintain a minimum balance in the account will lead to a fee charge or penalty. However, this will depend on the type of account you have opted for and the bank you have opened your account in. You can also transfer your funds from the saving account to a salary account if your employer account is with the same bank. However, you need to ensure that your bank permits the same service. Through the saving accounts, you may be entitled to an easier loan, as well as other benefits such as banking cards. The reason behind this is that the bank has an assurance that the salary is being credited to their bank, and thus will have an assured flow of income.

While both accounts offer plenty of benefits and assets that can differ from person to person, along with their different financial needs. While a salary account will offer plenty of benefits to employees, especially to long-term employees, it will be a drawback to individuals who change their jobs frequently. Most employers offer a fresh saving account, when you join up, as they have better control of the finances and benefits offered by the company itself. However, if you switch your job, you automatically will stop using the account after some time. However, if you don’t maintain the appropriate balance in the account, you will be charged a fee, as mentioned previously.
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Multiple Saving accounts: What are the pros and cons of owning more than one?

Owning a savings account has now become a requirement for most working individuals. However, plenty of these individuals owns more than one single saving account. The reasons may vary, right from getting access to better account features, or as a part of the requirements for a job. No matter the reasons, here are a few pros and cons you can enjoy as a part of owning multiple accounts:

Benefits:

High ATM withdrawals: Most of the savings account comes with their daily ATM withdrawal limits, especially when it comes to free ATM transactions in a day and month. Each additional account you add to your profile, will be added to your total withdrawal limit. Therefore, additional saving accounts will allow you the perfect opportunity to distribute your bank balance across several accounts, and ensure that you get to withdraw more from ATM’s whenever you require it.

Higher branch transactions: The saving account charges a certain processing fee for certain products. They can include cheque clearing, cash deposits and withdrawals beyond a certain limit. With multiple accounts, you have the opportunity to distribute the transactions between several accounts, to reduce the overall banking costs. This is especially crucial if you make payments for purchases of mutual funds, insurance products, bonds and equity shares that are routed through saving accounts. This is also viable for any deposits you get through dividends, bonuses and redemption proceeds.

More offers on banking cards: As a part of the savings account, banking cards such as ATM and debit cards are offered. These cards come with cashback offers, discounts and reward points. By availing multiple accounts, you will be able to make a point of sale and online transactions, based on the best offers, available on your card.

Disadvantages:

 Lower returns: You will need to maintain a minimum or average monthly balance in each saving accounts. This can not only differ from institute to institute but also the minimum amount. For example, the amount can be anywhere between Rs. 500 to Rs. 2 lakh. This, in turn, will offer you a low-interest deposit per annum, which can offer you a higher ROI if deposited in other financial products.

Non – maintenance charge: A non – maintenance of an average or minimum balance will attract non – maintenance charges. This amount can be anywhere between Rs. 1000 to Rs. 4000. Even free transactions will become chargeable due to non – maintenance.

Increased cost: Multiple saving accounts will lead to multiple cards. This, in turn, will increase the annual charges of the cards. It can amount to Rs. 100 to Rs 750 depending on the amount you have invested or the number of cards you have.

No matter the pros and cons of the saving account, you need to remember that no two financial habits will be the same. Therefore, to ensure that you get the best of benefits, without the disadvantages affecting you, you need to ensure that the account is fully utilised in the ways suggested above.

Credit cards: Ensuring a low credit score doesn’t affect your application

A credit card offers you the perfect opportunity and flexibility to make any financial expenditure. Additionally, it offers you the opportunity to borrow funds from the bank or financial institute, wherein which, you can repay it back within a fixed period. However, when it comes to applying for any of the credit cards, there will be certain factors you need to consider. One of these factors includes your credit score. But how does it play a role in your card application?

For one, you might be in for a rude shock, if you find that your application had been rejected, or card rates that are unaffordable. This is where the credit score will come into play.  Your lender will take into consideration your credit score, the basis of which, the appropriate card rates will be provided. If your credit score is low, there is a high chance that your application will be rejected, or you will get card rates that go beyond what you can afford.

While the acceptable limit for a credit score is 650, a score higher than 750 will help you get a better credit card rates. If you think your score is lower than the above-given rates, here are few steps you can take to ensure that your card application is approved right in the beginning:

Check to see if your repayments match: The first factor you need to check is your repayment history of any financial products you have borrowed. In other words, if you have applied for a loan or any other financial products that include borrowed funds, you need to check the repayment history. The reason behind this is that the details of your credit score will come mainly from your lender. If there are any discrepancies in your repayment history, your lender will normally send it to CIBIL. Therefore check to see if your repayment history is matched along with the lender’s to eliminate any possibility of inconsistencies. In the event there are, you can take the appropriate steps to change it.

Repay all current debts: While your repayment history can affect your credit score, so can your current debts. That is because any debt you take on, you will need to have the ability to repay it back. Your credit score indicates the amount of debt you current have, and whether you have repaid it or not. Taking on any additional credit cards is equivalent to taking on additional debt, whether you use it regularly or not. So to improve your chances of getting your card application approved ensure that all your debts are paid off. If you can’t pay off the major debts, ensure that the smaller ones are paid off. Once your debts are paid, ensure that the lender’s system is updated before you begin the application process for the card.

Benefits of Money 2 India Service for NRIs

If you are an Indian living abroad, you may need a swift and safe online money transfer service that can help you send money to your family members back home. This is where the Money 2 India service comes to your rescue. This is a convenient, money transferring service that allows you to send money from any overseas bank account to India. Let us take a look at the various advantages of this online service:

- Secure Transfer: There are many banks in India that offer this service. There is a guarantee of secure transfers as the transactions are carried out only after your approval and within latest firewall security. There are many customized online services from direct debit transfers to online banking amenities, which are made as per your requirements. Also, there are a wide range of security measures that are taken to make sure that your transactions are carried out safely. All banks make sure that the databases and internet systems used are kept separate so that no internal or third party can have access to your bank information. This ensures safety to various customers who transfer money to from other countries to India.

- Convenience to Beneficiary: There are different delivery options that make it easy for your beneficiary to receive the money sent by you. Options like electronic money transfer to Indian bank accounts, electronic transfer to resident Visa Debit Card issued by Indian bank, and Demand Drafts issued and sent to your beneficiary in India are available. Depending on the convenience of your beneficiary, you can choose your delivery mode in order to make a smooth transaction. The Money 2 India service is very quick and has a reach into many parts of India.

- Track Your Transfers: When you use this service, you can also track the status of your transfer by login into Money2India.com and also get notifications and alerts about every stage of your transfer. This makes it easier for customers to trust this service and be assured that their money is in safe hands. The service is available 24 x 7 which makes it more approachable. You can call up customer care, where well-trained professionals answer your queries and brief you in detail about their offerings.

- Cost Efficient: This online service offers great exchange rates and low cost services. This means that you get more Rupees for each foreign currency you send to India. It makes the process profitable for you.

These are the advantages that make the Money 2 India service so favourable for NRIs. Whether you want to send money to set up a business in India or for the maintenance of your home, you can do it with just a few clicks.