Do you know what is a recurring deposit account?

It is a savings avenue and it is very similar to the mutual fund’s systematic investment plan or SIP. Its a recurring deposit a particular amount of money is deducted every month from your bank account. In order to have a functioning recurring deposit, the very first thing you require to do is to apply for a recurring deposit account and request the bank to deduct the amount you wish to be deducted from either your savings or current bank account every month. Almost all banks offer the facility of internet banking through which your deposit can be deducted as well. What’s more the deposit can start from as little as Rs 5 and Rs 500 with private sector and private sector banks respectively. The investment time ranges from a minimum of 6 months to a maximum period of 10 years.

How do you calculate the interest?

It is absolutely the same, just like in bank fixed deposits. As of now ICICI bank which is a private sector bank is giving up to 7.5 percent interest for a period of one year and SBI which is a national public sector bank offers 7.75 percent for a deposit period of one year. However the senior citizens are entitled to an extra 0.5% interest .

Can you withdraw the amount before the maturity time?

Yu surely can do it. However the interest paid will be lower than the base rate for the time the deposit has been with the bank. Some banks have a penal interest of 1–2 %. Having said that it is always sensible to know that a recurring deposit account has a lock-in period of one year and if you want to withdraw the amount in less than a month’s time, you will not get any interest.

What if you are a defaulter?
If in case you end up being a defaulter which means you have missed paying your installments for one to 6 months, the bank is entitled to discontinue your account. However you can very well get the account back when you pay the outstanding amount within a month from the date on which you defaulted.

Are there any other benefits?
Yes! The main benefit is that you can also take a loan or a avail an overdraft facility up to 90% against the ¬required amount . this is surely a better option during an emergency instead of withdrawing your fixed deposit because that will continue to earn interest and at the same time you would be getting a loan at a rate lesser than a personal loan.
When is the right time to apply?

It is a good saving method to create an emergency funding for something you have in mind anyone who has a lower income or perhaps are starting off their career can very well make use of a recurring deposit account.

Different types of debit and ATM cards in India

A debit card is a card that is used for monetary transactions instead of cash. It is also called plastic cash, bank cards so on and so forth. With a debit card you can easily access your savings bank account in any bank from ATM’s you can deposit and withdraw cash whenever you want to and this would even save you the hassles of standing for hours in a long queue. A debit card can also be used in mobile and internet banking.

Do you know about different types of debit cards are available in India?
Visa debit cards: Such debit cards are issued with the bank’s tie-up with Visa payment services and this is why they also provide the Verified by Visa platform for online transactions.

MasterCard debit cards: A MasterCard cirrus card or a MasterCard Maestro Card gives worldwide access to the funds of the customers and this is why they can easily carry out online transactions using their bank accounts by making use of the MasterCard SecureCode platform.
Visa Electron Debit cards: Visa electron debit cards are absolutely similar to the Visa debit cards and the only feature that is missing from these are that these cards do not provide the overdraft feature.

RuPay debit cards
NCPi had introduced this card as a domestic card scheme. These cards help to carry out online transactions on the Discover network and ATM transactions under the National Financial Switch network

Contactless debit cards
Just a tap or wave of the contactless debit cards enables the customer to make a payment near PoS terminals as these cards work on Near field technology also known as NFC therefore making any electronic payment transfer is safer and secure.

Maestro debit card
Maestro from Master Card is a premier international debit card. It was founded in the year 1992.It is a service that has been popularly adopted at over 13 million locations that has been overspread across more than 100 countries across the globe. The signature logo on every Maestro partner card makes them easily identifiable. And this popularity instantly enables the customer to gain immediate access to his or her money  through a network of compatible ATM’s, POS outlets and online resources that are at once international and at once robust.

Do you know there is a difference between an ATM card  and a debit card?

The main difference between an ATM card and a debit card is that ATM cards can be used just in ATM machines to withdraw cash whereas a debit card can be used in ATM machines and in stores and restaurants as well for online payments.

Do you know all about Demat accounts and how to open a demat account?

The function your savings bank account fulfills for your money, your demat account does it for your shares. To be straight and succinct, a demat account holds all your shares in a dematerialised and electronic format.  All your financial machinery including government securities, mutual funds, shares, bonds are held by Demat accounts. If you want to trade in the stock market it is mandatory that you have a demat account.

Now lets see how a demat account works:

The CDSL and NSDL are two depositories in India that holds all demat accounts. A unique identification number is associated with every demat account and this is the number that you are supposed to provide while buying or sharing any share or bond in short making any transaction. This number make the companies identify you and deposit the shares and bonds in your account.

Then there are depository participants who provides a connection to the central depository. They are the brokers or financial firms that offer demat services.

Whenever you check your account,m you can see all the securities your demat account holds, this is also called portfolio holding. Whenever you make any transaction, these portfolio holdings and details are automatically updated.

Now lets get to the brass tacks! – how do we open a demat account?

The very first step is to choosing a Depository participant. There are many depository participants out there sone of them are 1. Globe capital market limited, 2. SMC global securities limited, 3. HDFC bank limited, 4. Sharekhan limited, 5. Edelweiss securities limited, 6. Kotak securities, 7. India Infoline limited so on and so forth.

Once that is done and you have chosen a depository participant, you have to fill up a demat account opening form  with the required documents and a pan card! After which, a copy of the rules and regulations and the terms and agreements will be handed over to you which will also include the charges that will be borne by  you. When Depository participant is done processing your documents for the account opening, it will give you your account number and the unique id that has been spoken about earlier on.  You have to use these details to access your details on your demat account whenever you want to. A monthly charge of maintenance of the demat account has to be paid by you and at the same time you also have to pay the charges for buying and selling securities, these charges differ in almost every depository participant.

Unlike a normal savings account a demat account can be opened even of one doesn’t hold and shares and the maintenance of shares in the account is not necessary to keep the account operable.

So, you want a car? How do you apply for a car loan?

Are you tired of the bus and train journeys and you want a car for yourself? Do you have enough funds to buy a car yourself? If you do, well and good otherwise you have to opt for a car loan like most other people do.

In order to avail a car loan the first thing that needs to be done is getting a credit check.

You have to check your credit, the moment you decide to get a loan. This score is more of an assurance to your lender about you being able to repay your loan. There are three main credit bureaus from where you can know your credit rating. 1. Trans Union, 2. Equifax, 3. Experian.

Determining how much you can afford.

Whenever you are going in for a loan, it is always advisable to check how much of the loan amount can be borne by you. Generally it is sensible never to exceed more than 20 percent of your take home pay. You also have to deliver about, how much down payment you can make, what would be the EMI and the interest rate on the loan.

You have to take a lot of things into your realm of thought when you are taking up a car loan

1. Depreciation – A car loses its value as it ages and hence it is a depreciating asset
2. Interest rate – The yearly interest fee that is added to your principal loan amount.
3. Insurance premiums – You have to figure out how much your car insurance will cost you, if in case repair cost of a particular car tends to be higher, the insurance premium too would cost higher
4. Fuel – You also have to determine how much gas will your car consume
5. Maintenance – This cost varies, one doesn’t know what kind of maintenance a car might require but the most common ones include, costs of changing tyres, oil so on and so forth.
6. Tax and fees – There are a umber of taxes and fees that are charged on on-road cars for instance for registration of your car with the state, you will be paying sales tax and not to forget the annual property tax as well.
7. Federal tax credits – You also have to do a good research, in the cases of some cars, the government incentives are available.

Below enlisted are some of the questions you need to ask before you apply for a car loan.

1. documentation – What are the documents that I will be required to produce for the loan?
2. How long will it take for processing my car loan?
3. Do you have a set amount that needs to be submitted as down payment?
4. What would be the base interest rate for the car loan
5. How much loan will I end up paying over the course of the loan?
6. What are the fees that are included in the loan?
7. Can I make early payments without penalties?
8. Can you ask me to make full payment of the loan? If yes, why?

All you need to know about current bank accounts

All those businessmen who have a greater number of banking transactions regularly with a bank open current bank accounts. These transactions might range from contra transactions, cash deposits and cash withdrawals. A current bank account is also known as Demand deposit account.

One can open a current bank account in commercial banks as well as cooperative banks. One doesn’t even have to give any notice in order to deposit or withdraw cash from one’s current account. Payment initiation to creditors using checks, that too is feasible through a current bank account. When any cheque is obtained from customers, it can be deposited in a current account for collection.

With cash deposits ranging from Rs 5000 to Rs 25000 in a bank, you can open a current account in India. Being a current account customer you will be eligible to make cheque withdrawals from the current account and one more thing worth mentioning is that in a current account the customer will not be paid any interest on the amount that is lying in it.

Lets dig deeper into some of the main characteristics of a current bank account

1. They are most operated to run a business.
2. It is a bank account where the sum lying in it will not accrue any interest
3. The minimum balance that needs to be maintained in a current account is more that what is needed to maintain a savings bank account.
4. We one borrows short-term funds from the bank, ti charges interest.
5. You can continue to own a current bank account as there is no time period for owning a current account. It is ongoing.
6. Before opening a current bank account, you have to do the proper KYC documentation with the bank.
7. The main objective of current bank accounts is the smooth functioning of businesses.
8. Unlike savings bank accounts  a current bank account can have as many deposits as possible.
9. No constraint on the number of cash withdrawals made through current bank accounts.
Now let us get to know the good it does to won a current bank account
1. Proprietors, businessmen, firms so on and so forth open current bank accounts  for large banking transactions and smooth operations.
2. The withdrawal amount has no cap and hence the withdrawal is limitless unless the government plants to levy some cash withdrawal taxes.
3. When a current account is opened in home branch of a bank, the deposit amount and he number of cash deposits are also limitless.
4. Businessmen can make direct payment by issuing cheques, demand drafts and pay orders.
5. The owner of a current bank account can avail of the short term loan facility
6. With internet banking  and phone banking, one can make transactions a cakewalk!

4 Types of insurance policies that are almost mandatory!

Human beings live as if they are going to remain the way they are. They are completely oblivious to any problem that might happen in the long run, they forget everything and continue to do things in the same fashion. One thing that should never be forgotten is that everyone will grow old and things will not be the same anymore. Or worse if any accident takes place and you suffer a disability and you are no longer able to work. From where are you going to get an income? This is where the long-term disability insurance comes in, if you take this insurance, it will ensure that you are covered if in case you have any disability and you will be able to carry on the current lifestyle without having to work.

Life insurance:

A life insurance is a must especially if you have your spouse, your family relying on you. Take into consideration the duration you want to keep working, think of the hardships and problems your family have to face once you are dead. While taking a life insurance you have to think about  how much you earn as well so that when you die, you family will not have to suffer frugality. Think of the burial costs as well. For many families, any unexpected expenditure is a cause for huge concern.

Health insurance:

Health insurance should be a necessity especially with the cost of medical treatments touching the sky.just a simple visit to a family doctor can be too heavy on the pocket. Forget about staying in a luxury resort, nowadays if anyone suffers a serious injury the cost he/she has to pay for a week’s stay in a hospital will equate the price with the resort. If one suffers with any injury that might require some sort of surgery, it is obvious that the cost will be in Lakhs. The cost of a health insurance is a bit on the higher side for everyone, but the costs of not having any would be even more!

Home insurance:

Replacing a home is definitely very expensive. However if you have the right homeowner’s insurance, the process is made simpler. Therefore it is advisable that if you are actually buying a homeowners insurance you have to pick and choose the one that covers the structures and the contents in addition to the cost of living  somewhere else while your home is being repaired.

You already own the piece of land and hence the cost of rebuilding doesn’t have to include the cost of the land. It would depend on what amenities are there in your house and the age of your home. All of these factors determine whether the current price of your house is more or less than the price you paid for buying it. To get an accurate cost estimate, it is sensible to find out how much the local builders are charging per square feet and then multiply it with the amount of space you want to replace. Make sure you include the cost of the features and upgrades. You also have to carefully include the cost of any injury that might happen in your property.

Current Account: 4 reasons why you need to open one today

When earning an income, it is crucial that you invest your earnings in the appropriate asset. There are several options you can consider, one of which includes the banking account. In this account, the savings account is one of the most popular choices of investment, as it offers a return on investment. At the same time, it also offers plenty of other assets and benefits.

However, over the last few years, the current account in the bank is becoming a popular choice for many investors. While normally used only by private companies and organisation, plenty of individuals are now opting to open this form of banking account. Here are some of the reasons why you need this account today:

It provides proof of payment: In today’s financial management, you need to provide a paper trail or a written proof that you made a payment from your current bank account. This is crucial especially for any tax purposes, such as making a tax deductible at any charitable donations. If you need to look for any of these records, you can always access your account statement, your chequebook, or even a duplicate cheque if you are using one. In fact, plenty of banking organisations now offers a printable front and back image of your cleared cheque for any proof of payment.

Current bank account cheques provide more security: This is a benefit mainly for the older generation. After all the current account in the bank can be mostly used to making payments through cheques over cash. After all, any cash taken will be spent by anyone without a trace. However, a paper trail of cheques will discourage theft. Furthermore, if you need to send funds for special occasions such as birthdays or anniversaries will be more beneficial over sending cash. A bonus is that cheques are less expensive than money orders or even casher’s cheques.

Pay or get paid easily: Most of the current accounts come with a free bill payment these days, which allows you to make and pay all of your bills online. This offers the ideal convenience to reduce any unpaid bills or even reduce increasing paperwork. In addition to this, most banks are now offering a facility where you can make person to person payments without any transaction charge. This is extremely handy if you need to make a quick payment via a bill pay.

Online banking access ease: With so many financial expenditures and channels available in the market, it is difficult to maintain a core banking system. In fact, most people don’t even balance a chequebook anymore. All they do is link their financial accounts to the latest software and manage their funds from there. However, a current account with an online access will give you an easy way to keep track of all your expenditures and help manage your finances.