All you need to know about NRE and NRO accounts

All Non-resident Indians whoare residing out of India have to open an NRE account  because NRI’s who have an NRE account are only permitted  to hold and maintain foreign currency earnings in Indian rupees and all the funds along with the accrued interest  are freely repatriable  and the interest that is earned is not taxable in India. An NRO account also lets the Non-resident Indian to maintain aRupee account in India.

Similar points to note between the NRE and NRO accounts

1.Repatriation – NRE account is freelyrepatriable i.e. the principal and the interest earned onthe other hand an NRO account has a limited repatriability i.e. permitted remittance is allowed  from NRO is upto USD 1 million net of the applicable taxes inthe financial year after submitting an undertaking and a certificate from a chartered accountant .

2.Tax treatment – NRE account is tax-free which means there is income tax, wealth tax and gift tax in India on an NRE account. On the contrary the interest that is earned inan NRO account and all the credit balances are subject to respective income tax bracket and the gift tax and wealth tax are also applicable.

3.Deposit of rupee funds generated in India – If a Non-resident Indian (NRI) or a Person of Indian Origin (PIO) or an overseas citizen of India (OCI) is earning income originating in India which might be salary, house rent or dividends so on and so forth, he or she is only allowed to deposit into the NRO account. Such earnings are barred from being deposited into an NRE account.

4.Joint Holding – NRE account can be jointly held with another NRI but with not a resident Indian. On the contrary the NRO account can be jointly held with another NRI as well as a resident Indian which has to be a close relative as defined in the section 6 of the Companies Act 1956.

5.You can choose an NRE account if your primary reason is to park  your overseas earnings remitted to India converted to Indian rupees or you want to maintain  savings in Rupees and want to keep them liquid or you want to make a joint account with only another NRIor you want your rupee savings to be freely repatriable.

6.Go for an NRO account only when your primary reason is that you want to park India based earrings  in Rupees in India, want your account to deposit income earned in India such as rent, dividends so on and so forth or you want to open an account with another resident Indian who happens to be a close relative.

Some ways to remit money to India

Transferring money to India has never been easier

If anyone wants to send money to India the procedure is very efficient and there are a lot of ways to do it. There are multifarious money sending options  available  that the business decision of which to use is also very demanding.  Here are mentioned are some of the ways to send money to India.

1.ACH transfer – an ACH transfer or an Automated clearing house transfer is a very good option for businesses based in the US. You just have to send the money from your bank account by the ACH transfer and whoever you are sending it to will get it in the next 4 days. In this method one doesn't need to make additional trips to the bank and neither does one have to pay any charges and thus this is quite a promising way to send the money because of the fact that it saves you both the time and the money.

2. Online transfer – This method of money transfer is perhaps the most basic and the most used as well. All you need for this kind of money transfer is the basic details of the person who is the recipient of the money for instance the name of the person, address and bank account. You can do this whenever you want to from the comfort of your own home, a computer and an internet connection.

3.PayPal -  Paypal is the largest online payment processor. You can easily transfer your money to India from a bank account to another without directly using your credit card or bank account. Whoever sends the money is not required to pay any fee but the recipient has to pay a nominal fee on the transaction

4.Wire Transfer – This is a traditional method of payment,, it is also the oldest method and this method existed for the last 10 years. In case you want to use this method, you have to go through the banks and other agencies so that the money can be sent. Just when you provide the institution with the required information about the recipient , they will start the money transfer procedure and then send the money. This process is actually pretty long drawn. A wire transfer may actually take a few days before the recipient gets the money. One important aspect about wire transfers is that they cannot be used to transfer small amounts of money because the fees depend on the money and the destination as well.

These are few of the methods for remitting money to India.

All you need to know about co – signing a loan

A loan is often a practical solution for most financial situations, along with offering plenty of benefits. Through these bank loans, you can easily repay back any financial debt, purchase a home, finance an education degree or even just finance a car purchase.

But while there are plenty of loan types available in the financial market, the fact remains that once the funds are borrowed, it must be repaid back at some point in time. Very often, this can be a sticky situation, especially if there is a chance that the borrower may fail to repay back the funds. Furthermore, the borrower’s financial profile may not allow them to get the ideal loan rates, and ultimately the financial aid to help get out of a financial issue.

This is where a co – signer will help. A co – signer, also known as a joint loan holder will share the responsibilities of receiving and repaying the borrowed funds. This has plenty of benefits as well as disadvantages. For one, with a property repayment strategy and sufficient funding, both applicants’ credit score will improve. If not, not only will both applicant’s score will drop down, but the mark of the debt will remain until the loan is fully repaid.

So if you are planning to become a co – signer for any bank loans, here are some tips you need to keep in mind:

Know your borrower: As a rule, you should keep your finance safe and avoid any risky options. This is equally applicable for when you become a co – signer. At this stage, you need to know your borrowing partner very well. This is including family members and close friends. No matter how closely intimates you are the borrower; you need to be careful before you sign up as a co – signer for the bank loans. After all, this is a debt both parties will share and bear until the loan is repaid. Only if you have absolute trust in the repayment capabilities of your borrower should you proceed with the co – signing.

Review your budget: When investing in the loan as a co – signer, both parties will be responsible for repaying back the borrowed funds. This also includes ensuring you have sufficient funds for the repayment. In the event the primary borrower defaults on the loan, you should be well prepared for the added strain on your budget. However, before taking this step, you should ensure and insist that the other borrower also maintains a sufficient budget to repay the debt obligation. This help assesses and maintains some level of confidence in their ability to repay back the debt. If it looks like there is a possibility that either budget will give way, review your budget strategy for better loan rates.

Get copies of everything: As a co – signer, you will get copies of the loan documents. But you must insist on duplicate statements. If you must, ensure that you get the required login credentials, so both parties are aware of the status of the debt payments.

What are the insurance policies to opt for in your early 30's?

You may be used to the finer things in life, thanks to your well - earning partner. But at any point in your life, you may be reduced to a situation where you will need to struggle to get even the basic of a meal. That is what happens to most individuals who rely on other earning members to maintain their lifestyle.
This is why it is crucial that you insure yourself. With the right insurance cover, brought at the right time in your early life will not only offer a good coverage but also save funds.

So if you are planning to opt for any insurance policies, here are the important three policies you need to opt for:

Term life Insurance: A life insurance may not seem much at a young age. However, there is a possibility at that point in your life; you may be repaying a loan. You may even have parents who are about to retire and who may be partially or fully financially dependent on you. In such a situation, a term life insurance will help in any case of any eventuality. In fact, the younger you are, the cheaper you can buy your term life insurance cover. Experts recommend purchasing a cover that is at least 10 to 15 times more that one’s annual income.

Personal Accident Insurance: Another one of the insurance policies that must be purchased is the personal accident insurance. This is one insurance cover that no individual should ignore, as most working individuals especially in the urban area, is prone to accidents given the required lifestyle. It has plenty of covers that offers a nominal pay, in the event where disability or death occurs. Barring any adventure sports and self-inflicted injuries, this insurance covers plenty of accidents that arise in the normal course of life. 

Health insurance covers: The incidences of hospitalisation may be low at a young age, but it cannot be ruled out completely. In fact, a hospitalisation caused by dengue can cost anywhere between Rs. 50,000 to 1 lakh. While your health cover may be covered by employers providing a health insurance cover, the high propensity of jumping jobs will reduce this likelihood. Furthermore, if you join a start-up, there is a high chance you do not even get the health insurance, putting you at a complete risk. The ideal health insurance cover for such individuals can be anywhere between Rs. 2 to 3 lakhs. As you progress in your job or age, you can then include covers with hospital cash, critical illness or any covers that include specific diseases.

Before you opt for any of these covers, you should use the service of online websites and check all the available options in the market. Avoid considering one factor, such as premium payable, before you make your decision.

Multi – currency card: How to pay less for foreign currency

In preparing for a trip abroad, it is crucial that you explore currency exchange. While your trip may be fully sponsored by an agency or your company, there will come a time where you may need to spend from your own funds. At this time, you still need to be aware of how much you will be spending if ever the time came you need to spend from your own pocket.

But instead of opting for your own banking cards, or relying on expensive foreign local funds, you can always opt for the multi – currency forex card. This card functions like any other banking card, but it is mainly used to access foreign currency. To make the most of this multi-currency card here are a few factors you can keep in mind:

Check conversion rates from a genuine source: The value of foreign currency is always in a state of change. Plenty of companies and lenders who offer currency conversion facilities also offer values of the current currency exchange mostly through their websites. In order to get an idea of a fixed value you will be investing, you can check these websites out. But how do you know which is the right value? Certain government based websites offer the day’s current conversion rates. You can check out these rates, thus giving you a ballpark figure of the best rates to invest foreign cash.

Shop around: Most banks offer foreign currency rates with wide gaps. In other words, the value of a single foreign currency will be different for different banks. For example, the British pound has been undergoing plenty of changes ever since Brexit, with the difference in values such as 0.9 pounds. Plenty of banks is offering different conversion rates based on this factor. By shopping around, you can get an idea of what to expect with a particular foreign currency value.

Exchange rates are constantly changing: It is difficult to predict the exact value of the foreign currency. A few months before you can monitor the value of the currency for a while and make an invest in your multi – currency forex card when the time is right. Don’t worry if the conversion rates increase after you invested in this card. Once you load the funds on the card, the conversion rates are locked at the time of loading.

Access to physical cash: In certain cases, you may want to access physical cash. This multi-currency card will help you access funds from any ATM or bank. All you need to do is approach the cash dispersing machine, and put in your PIN. Once this is done, you can easily withdraw a number of funds you want. This will help eliminate the need to access funds from your other debit or ATM cards, which will be charged at international conversion rates.

Debit card: Teach your children to be financially smart with these tips

Being financial literate is no longer an option, but rather a necessity. As adults, you will face several financial incidences, which require appropriate decisions, strategies and planning. At such a time, being financially ignorant will not only cost you but will also allow you to lose out on an opportunity for better financial investment.

The best to be educated about finance is by starting young. Your kids, in fact, have a better opportunity to become financially aware and experienced at a young age. All you need to do is introduce the debit card to them. But how will this bank card will work in their favour?

Here are some tips that can help them:

Learning all about account fees and minimum value: Most of the debit cards are linked with a bank account. This an ideal opportunity to acquaint your child with how banking accounts function. Most banks allow joint accounts with a minor. Therefore you can also invest a small amount of funds now and then. At the same time, you can teach your child about maintaining the minimum balance and maintenance fees. This way, your child can learn to manage and limit withdrawals from the joint account. Similarly with the fees, get your child to understand the fee structure and how the funds in the account will be charged for them. Encourage them to communicate with the bank on how to manage the fees and how to reduce them.

Managing funds: Urge your child to get into the habit of reviewing his or her debit card statements, physically or online. Suggest that they sign up for email or text alerts, especially if the bank account funds dips below a certain value. You can even opt for apps that can help track account balances, which will go a long way to managing spending and budgeting.

Explore the card features: Most of the different types of debit card comes with various features. For example, certain cards come with protection, which helps provide protection against unauthorised purchases or even reduce the unlikelihood of fraud. You may even sign up your child for ID theft alerts. Some cards even come with price protection which means, if your child has found a product with a lower price on an item within a specified amount of time after purchasing it at a high price, you can get the difference between the price you paid and low advertised price.

Debit versus prepaid card: While there plenty of different types of debit card that can be used, there is also the choice of prepaid cards. A prepaid card is an independent card minus the link to a bank account. You only need to load the funds on the card for spending purposes. There is a benefit of your child not racking up overdraft fees with a prepaid card. However, it also restricts their financial learning.

How to save up for a financial goal with the recurring deposit calculator

Savings your funds for the future is the need of the day. You may be earning more than your sufficient needs. But there will come a time where you will stop earning, and rely on your savings for survival. Furthermore, if your savings are not used for one purpose, can be used for several others, without harming your initial investments.

But to save, you need the ideal investment option and the ideal investment rates. Furthermore, you need also to calculate how much you need to save on a daily basis and what is the final amount you require. All these queries will be answered with the recurring deposit; a simple termed deposit that requires a fixed deposit every month till the tenure is met.

To help you calculate the ideal investment amount for this termed deposit, you can easily opt for the recurring deposit calculator to assist you. Here are few factors you will need to consider before using this tool for your RD investment:

Financial goal: This is the main factor you will need to consider when opting for recurring deposit. While it may be simple to start investing without any goal in mind, it will not serve any purpose. Furthermore, by setting a goal, all the factors of the investment will be set accordingly. For example, you need to save up for a family function or even a purchase of a particular product. Through this RD calculator, you can set up the amount needed to be met, along with the tenure that will be required to meet it. Accordingly, you can also opt for an interest rate that will suit the investment.

Income: Your income is another factor that needs to be taken into consideration when investing in this termed deposit. Once you have paid off your monthly expenditures and any other debts, your remaining disposable income can be used for your own leisure. But instead of indulging in a carefree expenditure, a small sum can be used to invest in the recurring deposit. You can use the recurring deposit calculator to calculate the ideal amount from your income to invest. Accordingly, you can adjust your income to be invested for the desired result.

Interest rate: The interest rate is normally the amount that is deposited at a fixed tenure. This based on the lender’s offered rate, along with the tenure you will be opting for. Higher the investment amount, higher the interest rate, the more will be the return on the investment. By using the RD calculator, you can easily calculate the ideal interest rate that will give you the preferred rate and outcome.

Tenure:  Tenure plays the most important role when it comes to this investment. After all, it determines how long the rates will be locked in. Furthermore, longer the tenure the more you will receive regarding return on investment. Using this tool, you can calculate the ideal tenure that will offer you the outcome you want.