Recurring deposit versus Systematic Investment Plan: Which is the best investment plan

It comes as no surprise that plenty of working individuals will recommend investing your earnings into savings as soon as you get your first paycheck. But with so many investment options available in the market, how do you know which is the right one to invest in?

Amongst the several popular options available in the market, the recurring deposit and the systematic invest plan have always been a popular option. But between these two options, how do you know which one is a viable option for your investment?

Given below are the differences between these two investment options and how you can make the most of it:

Investment: SIP’s make for an ideal investment in choice. For one, you can invest it on a weekly, monthly or quarterly session. This works best for those who don’t have a steady income or have multiple forms of income. The choice will depend on your preference. However, the RD account is a termed deposit. You need to invest your funds on a monthly basis on a fixed date. This is ideal for those who have a steady income.

Investment schemes: As far as investment schemes are concerned, SIP’s have a lot more to offer as compared to the recurring deposit. With SIP’s an investor has a choice to invest in an equity or debt scheme. This will depend solely on the risk appetite of the investor. For those who are looking for reoccurring investments, this is an ideal choice. With the RD termed deposit, there is only one scheme available. An investor will only be able to invest in one single form of deposit, with a fixed rate of return along with a fixed term. This is an ideal choice for those who want to invest for a particular financial goal in mind.

Returns: In both cases, the returns are often determined by the performance in the market. In the case of SIP’s the equity or debt market will offer a return of anywhere between 12 to 15% of return. These returns can occur at any time. In the case of the recurring deposit account, the returns are not only fixed, but the investor knows well about the time of the return. Usually, the returns range between 7.0 to 8.5%.

Risk: In both investment options, there are risks involved. In the case of SIP’s, the investment depends on the market performance, which offers a high risk. However, in the case of the recurring deposit account, the risks are comparatively low, as the rates are often fixed at the time of investment.
Liquidity: SIP’s offer a more liquid investment as opposed to recurring deposits. Investors can easily close a SIP and withdraw funds anytime.

Furthermore, there is no penalty for withdrawing funds from a SIP account. Although RD account is liquid, any withdrawal before the tenure is met will attract withdrawal charges, and the full benefits of the account will not be given.

While there is a considerable difference between both investment options, each option is best suited for different financial profiles. To make the most of these investment options, you need to know the strengths and weaknesses of your profile and match it to the required investment options before investing.

4 factors that every shopper should know about the debit card

When it comes to shopping, be it your monthly expenditures, or an occasion-driven splurging, it is important to keep track of your expenditures. After all, you would not want to be in a position where you splurge your savings or even miss out on an important saving deal.

So how to financially make the most out of your expenditures, with the right finance tool? The right tool, such as the debit card will make the ideal choice. Furthermore, with the government pushing to financially digitise the country, this makes it an ideal time to shift to this financial tool.

As a shopper, here is how you can benefit from the debit card:

Debit cards are linked to your account: Love to splurge or over – indulge on your shopping spree? Debit cards will be the ideal choice for your to protect yourself from over indulgent expenditures. As they are linked to your bank account, any expenditure you make on your account will be deducted from your account. The more you splurge, the less of saving you will have. Thus to reduce your expenditures, using a debit card will go a long way to curb any unnecessary expenses.

Debit cards can be used as an ATM card: Not all retail or merchant outlets may have the means to possess a banking card swiping machine. In this case, you can always opt to make your purchase or transaction with cash. You only need to withdraw cash from the ATM, with your debit card, as it also functions like another ATM card. This is also one way to curb excessive expenditures by only withdrawing the amount you want, as compared to a large amount.

Debit cards linked to loyalty or reward points: Plenty of banks and financial institutes offer incentives to promote healthy expenditures on debit cards. This is when the special types of debit card come into place. These debit cards are linked to selected brands, allowing you to collect points if you make a purchase of any product from that brand. These points can be collected and redeemed for more incentives.

Debit cards now come with a security upgrade: With the country slowly financially digitising itself, it becomes more of easy targets for scammers and phishers to collect data about your card and use it to access your bank account. However, in order to combat an unauthorised access to your card or stealing of your data, all the latest types of debit card come equipped with an embedded chip. This chip encrypts your transaction data as soon as it is swiped in the card machine. This prevents any skimmers from collecting data from your card.

How to make your savings grow along with you?

Earning an income is as good as the savings you get out of it. But with so many expenses and upcoming investments which come up as your grow older, you may always end up finding yourself with lack of cash at some point in your life. If ever you need to turn to your savings on a rainy day, what are the options can you can consider?

This is where the recurring deposit will work in your favour. With this termed deposit, you will need to invest a small sum of funds on a monthly basis until the deposit reaches its maturity age. At maturity, you will be able to enjoy the benefits of the termed deposits, along with the added interest to the deposit.

Given below are the steps you can take with the recurring deposit along with the RD calculator, in order to make your savings grow along with you:

Know your projected disposable income: Your disposable income will play an important role for any investment, and this is no different for the recurring deposit. You have a choice of how much funds you can invest in this timed deposit. This can be easily done with a recurring deposit calculator. The more amount you invest, the higher the return you will get. Furthermore, if you think your income will increase in the coming future, you can utilize this projected income to increase your return on investment or shorten the tenure. However, at the same time, you need to take into consideration the tenure and the added interest.

Plan your tenure: As you grow older, your expenditures will also increase. Naturally, your income will also increase at a steady pace. This can be utilized to its full potential, especially if you can predict when you are up for an increment. In this way, you can synch the tenure of the deposit, along with your increment. When this occurs, you can also alter the terms of the termed deposit, to invest the added income for a higher return. The RD calculator will go a long way to help you in this step, as you can use this tool to calculate the possible outcome with different tenures and the projected increase in income.

Fix your interest rate: With this termed deposit, you have the choice to opt for an interest rate that will offer you an affordable or high return. While the interest rate will co – relate with the tenure and the principal amount you will be investing on a monthly basis, determining how much of the return on invest you will receive will be in your hands. You can always use recurring deposit calculator to calculate the ideal outcome of each return on investment. Furthermore, as your income grows with the progression with your age, you can opt for a higher investment amount and higher interest rate.

4 secrets to getting your personal loan application approved

A personal loan will offer plenty of benefits, especially since it can be used for several purposes. For one, it can be used to pay off any previous debts. It can also be used to purchase an expensive gadget, or even finance your holiday trip.

However, while the loan will offer you financial aid, the fact still remains that you need to get your personal loan approved before using it. This can occur only if the lending institute offers the approval on your application.

So what are the factors taken into consideration for this approval process? Given below are the important ones:

Do you meet the eligibility criteria?
This is the first factor that all lending institutes will consider. The list of eligibility criteria’s determine whether you afford the loan in the first place. Under this category, you need to be above the accepted age, earning a sufficient income, and have no previous debts or bankruptcy declaration. tools such as the personal loan EMI calculator will help you get an idea of what to expect in terms of your eligibility criteria.

Are you stable enough to handle the loan?
Your employment and your address are two factors where your lender will use to check your stability. If you have spent considerable years with your employer, your application will be viewed favourably. If you are as self – earner, you will need to provide sufficient proof that you can repay the loans. In either case a personal loan calculator will provide the ideal assistance as to your financial affordability. Residential stability will be more of a challenge if you still live with your parents, or if you move often around. If you own your own home, or you have a signed lease for more than 6 months, the approval will work in your favour.

Can you afford the loan repayments?
While you may earn an income, do you have sufficient disposable income to suffice the repayment of the loan? The lender will want to know if you can afford the repayments, by assessing your income and your expenditures. They will also take into consideration unexpected life events, so that you have sufficient buffer funds to deal with such events. In order to prepare for these factors you can always use the personal loan EMI calculator to get an idea of what to expect.

Can they expect the repayment from you?
Lenders can determine how much of a risk you can be, just by taking a glance at your assets and liabilities. This is basically known as your net worth. The higher your net worth as compared to your liability, the less of a risk factor you pose. By using the personal loan calculator, you can get sufficient data to leverage for an approval from the lender.

Reduce your health insurance premiums with these 5 points

With our lifestyles taking on a fast pace, it is our health that is taking a tool. Hence it is essential to take on health insurance, in order to give yourself the opportunity to stay financially viable, and yet get optimum protection in terms of your health.

However, many individuals view the premium costs of the health insurance policy with trepidation. It is a common assumption that the lower you pay, the lower coverage you will receive, as most of the premium costs are non – negotiable.

However, there are ways and means you can opt for, in order to reduce the costs. Some of them include:

Opt for a higher deductible: The deductible is the amount that you normally pay out of your pocket before your health insurance cover will start. A high deductible will lower your premium. Therefore, by paying a higher deductible, you will be able to reduce the pay for premium for your insurance coverage. You can check your insurance policies for voluntary deductible options, which allows you to pay a part of the medical bills himself, before claiming it from the insurer. This can also be a percentage of the bill amount. However, you must ensure that you choose carefully, as a high deductible will leave you with costs that you will be required to settle on your own.

Look out for top – ups for higher coverage: There are plenty of types of health insurance that offer different covers. However, purchasing an adequate cover is important especially with the rising costs. With a high coverage, you will normally get a high premium. In this case, it would be wise to split the required cover and opt for the top up plan. This top up will come into effect when the base sum is exhausted. In the end, you will be getting covered at a lower cost, for a considerable sum.

Opt for family floater plans: Amongst the various types of health insurance, the family floater plan is a popular choice. In this plan, if one or two individuals get covered under the same plan, the cost for health coverage for each individual will be reduced. This umbrella coverage is one of the biggest benefits of a family floater plan.

Opt for a multi – year premium payment: Most of the health plans come with certain discounts. One of the popular options is to choose to pay an upfront premium for two or more years instead of the annual yearly one. This will go a long way to reduce the premium as well as the policy in force for that duration.

Buy young and stay healthy: The premium you will be paying for your insurance will depend on the state of your health, age and medical history. With the increasing number of ailments in your profile, the more premium you will have to pay. Factors such as blood pressure, diabetes, recurring health issues or even any pre – existing conditions will lead to more premium.

What are the benefits of the UPI money transfer system?

With the aim to digitise India financially, new and convenient methods to transfer funds is now being introduced into the market. One of these measures, is the introduction of the unified payment interface.

Known as UPI, this payment system allows money transfers between any two bank accounts, by using your smartphone. This is becoming a popular choice for many individuals who have settled abroad and needed to send money to India. Furthermore, there is no requirement to input any details pertaining to your card details, IFSC code or even your net banking or wallet passwords.

But how does this benefit you? You can take advantage of the following advantages:

Cheapest way to make a money transfer to India: UPI is becoming one of the cheapest methods to make a money transfer. If you are making a transfer through NEFT, you will need to pay a minimum amount of Rs. 2.5 for each transfer. Similarly, with the IMPS charge, you will need to pay a minimum of Rs. 5. But with the UPI charge, you will only need to pay less than 50 p for each transaction. Because of this low cost, UPI now offers the mean to make small money transactions without incurring a heavy transfer charge.

No requirement to submit details: One of the greatest inconvenience when it comes to making a money transfer to India or even from one bank to another account, is the task of inputting bank details. As this is a meticulous task, which requires you to carefully input all your details into the transfer, it often turns into a tedious job. Furthermore, any net banking transaction you make, by inputting the details, will increase the risk of exposing your bank account details. In the case of card transactions, you will be required to input your card number, validity period and CVV number. However, UPI solves this problem. You only need to provide the virtual payment address, which is quite similar to your email ID. Once you input this ID, there is no requirement for you to input any other details.

Comes with security features: Plenty of individuals, especially those who do not have any previous experience with this form of money transfer, are reluctant to opt for this kind of money transfer. After all, not everyone will have a card, or even use net banking for online payments. Furthermore, the lack of experience will lead to security concerns. After all, someone may take a look at your PIN number or even steal your net banking details. This is where the UPI will minimise this concern. When you want to send money to India or any local bank account, you only need to provide the virtual payment address, which gives no indication of your bank account. The authentication will take place only on your smartphone, which requires you to input two different PIN’s.

5 tips to consider when applying for your car loan

Gone are the days where a four-wheeler was considered as a luxury. Today, it stands as a symbol of essentially for most individuals as they travel to and fro from work. But while the car has become a solution for those who want to save up on time and resources, one inevitable factor remains. That is, how to financially afford the car?

Does one save up on one’s disposable income? Can one borrow from close friends or family? While these may be variable choices, the ideal choice lies in the car loan. With this loan, you can easily get access to funds to purchase the vehicle, along with the added essential and insurance. Furthermore, you can also easily repay back the loan in installments, over a fixed tenure of 10 to 15 years, which is ample amount of time for any loan repayments.

But like any other loan, the process to apply for a car loan will require certain considerations. After all, a loan is a debt that must be carefully considered, lest it turns into a lifelong repayment. Here are a few tips you can consider when it comes to applying for the car loan in India:

Tip #1 - Explore options: You must first shop around for the car loan like you would do with any other purchase. As there are plenty of banks and financial institutes that offer this loan with different rates, shopping around will give you an opportunity to consider all your options. You can approach the financial institute or even a car dealership to get an idea of what to expect in your loan for a car purchase.

Tip #2 – Nail down your research: Take your time to learn about the car – financial industry. Research about the loan rates on the open market. Know your financial history, and determine the deal you would get. If you take the time to understand the current scenario, you will know the appropriate time to apply for a car loan and get the best deal.

Tip #3 – Get your credit report: It is best to arm yourself with your credit report before you negotiate for a car loan in India. If you are aware of how good your credit score is, you will be able to push your lender to offer some concessions.

Tip #4 – Consider old models: Most of the dealerships are determined to get the older models sold before the new models hit the market. If these dealerships are tied up with the bank you consider for a loan, you will be able to pull off a better deal and complete the deal in-house with the right strategy.

Tip #5 – Know the brief terms: Don’t be convinced you’re getting the better deal with lower monthly payments, especially on longer loan terms. You must consider the overall annual rate you’ll end up paying. If you can't, calculate the effective interest rate, ask the loan provider to explain it to you.