Did you know the best way to carry funds abroad on your trip?

While travelling or vacationing abroad especially to any international destinations, it would require plenty of planning, preparations, and the hassle of foreign exchange. While it may take you considerable time and effort to plan and prepare, considerable thought must be given to the foreign exchange. After all, you would not want to be in a position where you carry immense funds and put yourself at risk of loss or theft.

In this case, there is one simple solution when it comes to foreign exchange, the forex travel card. So what is this foreign exchange travel card? The forex card is similar to a prepaid banking card, which can be used to load foreign exchange funds. Depending on the card you opt for, you can also opt for multiple foreign currencies, depending on your travel plans.
Here is what the forex card will offer you:

Locked in rates for foreign exchange: One of the main features of the forex card is the lock-in feature of the foreign funds. When refilling a particular amount on the card, the conversion rates are also locked in. This provides the ideal protection against volatile financial market conditions, especially when the conversion rates are unpredictable. Once the rates are locked in, at the right figures, you can enjoy protection against high conversion rates .

Multiple currencies: Plenty of banking institutes offer forex cards that can be used in multiple countries. While often they may be a premium forex card, they will go a long way to help you save funds, especially if you travel abroad on a regular basis. You will have a choice of over 12 to 21 different currencies to opt for when it comes to these cards. Furthermore, you need not worry about refilling the card in different currencies, as the loading the card with your local currency will automatically convert it into the local foreign currency when used.

High-security Features: Carrying immense funds abroad is a risk that you can easily face with the forex travel card. Like other banking cards, it comes equipped with a unique PIN that can be inputted to access the funds. However, unlike the other banking cards, this card does not come only with the magnetic trip. These cards are also equipped with an embedded chip. In the case of the magnetic strip, skimmers could easily collect data about the transaction, along with the bank details, thus compromising it. However, the embedded chip now encrypts each transaction data it makes.

Remote reloading: If you run out of funds on the card, you can easily refill the card with the funds from the bank account attached to the card. All you need to do is contact the lending bank and make a request to transfer the funds. Within the next 24 hours, the deposit will be made.

NRI Banking service: Steps to follow when opening an NRI account from overseas

Although ventures abroad are financially promising, plenty of Indians settled abroad still retain their investments back home. It is most convenient for individuals to make money transfers to family members back home if they use the NRI banking services. Furthermore, a certain number of investments must be invested in rupee, to make the transfer back home.

But in order to take advantage of these NRI banking services, you first need to open an NRI bank account. However, if you have settled abroad, opening an NRI bank account with an Indian based bank will seem like a tedious job. To help you in investment, here are a few steps you can follow to open your own NRI bank account in order to avail the NRI services:

Step 1: Downloading the form
For those who cannot approach the bank, you can easily avail the opening of a NRI banking account online. Most of the banks provide this service on their respective websites itself. Or you can also contact the bank representative and ask for an online for. In the next step, you will need to fill up the form with you respective details. You will either need to fill up the form online or take a physical print out and fill out your respective details.

Step 2: Submission of documents
In the next step of opening your NRI banking account, you will need to submit documents supporting your identity proof, address proof and even your status proof. This can include your driver’s license, your passport details, your visa details, or even your OCI card. In addition to this, you will also need to provide the payment instrument for the initial contribution. This needs to be enclosed with the application.

Step 3: Attestation
Once you have got the respective documents, you will need to get them attested by the appropriate Indian government body. You can get it attested by the Indian Consulate or an overseas bank. It can also be notarized by a foreign notary. Alternatively, you may also furnish the additional approved proof, along with self – attestation.

Step 4: Provision of KYC
If you are applying for the first time for the NRI services, the bank may require you to fill up the ‘know your customer’ format. Under the FATCA and CRS requirements, you need to disclose your tax residency status and related details. This would entail you to submit additional documents of proof and identity.

Step 5: Dispatch your application
Once you have completed all your forms and provided all the relevant documents, you need to dispatch it to the bank branch. Selected banks offer PO Box service in selected countries. In this case, you can drop off your application in a post box with the respective PO box number.

4 steps to follow when converting a residential account into a NRO account

With plenty of NRI’s travelling abroad settle down or start their own ventures, it is crucial that the financial aspects of one’s banking accounts meet the standard of the foreign residential government’s banking requirements. In this case, these bank accounts can either be shut down, or can be converted into another NRI account, such as the NRO account.

This account functions like any other savings account, however it does have certain restrictions, as mentioned below:

• Repatriation: The NRO account has a restricted reparability of a remitted amount of 1 million USD. If the remitted amount exceeds this amount, an undertaking along with a certification from a charted accountant must be provided.
• Tax treatment: The interest earned and the credit balances on this account are subjected to certain taxes.
• Deposits of income earned in India: If any income is earned in India through financial products such as salary, rent, dividends etc, then the deposit can be made in this account only.
• Joint Holding: The NRO accounts can be jointly held with both NRI’s as well as residents.
If you are looking to convert your residential account to the NRO account here are a few steps you must follow:

Step 1: Fill up the conversion form from the bank – As a part of bank account conversion process, you need to get a specific form from the bank. While you can always approach the bank for this form, you can also down the form from the bank’s website. You can convert all your bank accounts into your name, under the same customer ID.

Step 2: Submitting the required documents – As a part of opening the account, a certain set of documents are required to be submitted. They include the address proof of the overseas address, applicant’s passport, valid visa or work permit. The PIO card will also be required to be provided.

Step 3: Maintaining minimum balance – During the conversion process, the account in question must have a minimum amount in it. If it has zero balance, the required sum of funds must be deposited in it.

Step 4: Submission – The form and documents must be submitted to the required bank branch. Plenty of these banks offer a PO box facility in foreign countries, which allows you to drop off the required documents and forms for processing. On submitted, it must be verified by the bank. Once the verification process has been processed, the account will be re – designated as an NRO account.

In this step, the re – designation may not change the account number, but in all the bank accounts, it will be flagged off as an NRO account. When making this conversion, you need to be aware about the possible charges for carrying out the conversion process.

Are you aware of the different benefits of the NRE account?

As an NRI, you will have a benefit of applying for any of the NRI accounts, namely the NRO or NRE account. But while the NRO account has been a popular choice for investments with the income originating from India, the NRE accounts offers plenty of other benefits, which has been mentioned below:

Tax benefits: This is one of the most important and beneficial factors that you need to consider before investing in this account. The interest that you will earn with this saving account, as well as the fixed deposit, will be tax-free in India. Even if you do have any income originating from India, it is not counted. By this alone, the account is one of the most secure and high yielding investment options available to NRI’s.

Repatriation benefits: Apart from the tax benefits, the account also has repatriation benefits. With the savings account, funds can be easily moved from account to another, since the interest and the principal amount can be repatriated easily, and freely.

The requirement of low balance: Due to the rising competition, plenty of banks and financial institutes are dropping the requirement for the minimum account balance. A minimum balance of Rs 10,000 is normally used as a minimum balance in the recent months. This is a relatively low amount for most earning NRI’s.

High-interest rate: Both the saving account and the fixed deposit NRE accounts offer a high-interest rate. Although it may differ from bank to financial institute, you can expect an interest between the ranges of 4 to 6%. The interest I calculated on the daily closing balance. Furthermore, the interest is paid half – yearly, which is normally June and December.

Convenience benefits: Apart from its other benefits, it the NRE account also offers convenience. You can easily open this account at your local bank or even online. All you need to do is fill up a form online, make a copy and attach the required self-attested document copies. You can even take advantage of the Free PO Box Service to send your documents depending on the country you are residing in.

Joint holding: Joint account holders offer plenty of benefits, which is no different for the NRE accounts. Having a joint will offer one of the best ways to manage your investments and earn more along with another account holder.

Mandatory holder benefits: As per the features offered by the NRE account, you can appoint another individual to operate your account on your behalf. Through this mandate, you give an individual of your choice the authority to operate your bank account on your behalf.

Global Advantage: Plenty of Indian banks are now offering NRI’s a variety of global offerings. By opening an NRE account, you can get to handpick exclusive offering catering to your needs both in your residential country as well as in India.

Managing your NRI accounts when returning back to India

With the change in the global scenario, plenty of NRI’s are now returning to their home country in order to pursue better ventures. But while the change in status from NRI to a resident may seem like a simple process, it bears a great impact on the financial investments, especially in terms of the NRI account. After all, all NRI investments made globally have been formulated in terms of the global financial market rules and performance, which is completely from the residential functioning.

So what exactly happens to your NRI bank account when you return home? Here are a few changes that will occur:

NRE/NRO/FCNR account: These are the first NRI accounts that will change. If you have any of these accounts, you will need to inform your holding bank of the change in your NRI status and so that they can begin the procedure to convert the NRI bank account into the local bank account. In this way, all your holdings can be still held in your account, without the need to transfer them into another account. Furthermore, you can also enjoy the benefits of the local banking accounts.

RFC account: If you don’t wish to convert your NRI account or accounts into the resident account, you also have an option to cover the account into a Resident Foreign Currency account. This is normally the option for the NRE and FCNR account. Individuals who have been an NRI for a continuous period of not less than 1 year, and have become a resident in India as per FEMA Act on or after April 18, 1992, can open RFC account. However, the RFC account can only be denominated in any freely convertible foreign currency.

Through this account, you can maintain the funds in foreign currency. Moreover, both the principal and the interest rate can be repatriated back home.
The process to change the designation:

Step 1: Fill out the form updating status: You need to first inform the bank of the change in your status. The banking institute will provide you with a form asking for the details of your status.

Step 2: Provide details pertaining to KYC documents: In addition to submitting the document, you will also need to submit relevant details pertaining to the KYC documents. Banks normally request for the KYC documents in order to update your profile in the bank accounts.

Step 3: Attestation of documents: Before you submit the documents to the lending bank, you will need to get the relevant documents attested by a recognised government institute. Once the documents have been attested, you can send in the document along with the relevant forms.

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.