Everything about FDs

Fixed deposit or FDs is a very safe and secure investment option that allows you to invest your money for a specific time span and at a fixed rate of interest. During the tenure of your FD even of the rate of interest of the FDs go up or down, you will; have it pay to same rate of interest that was decided during your initial investment procedure.

The Fixed deposit accounts pay a higher rate of interest than the savings bank account. All the other conditions are equal; you would definitely be in a much better position if you put your money into an FD account instead of a savings bank account. The interest can be paid to your quarterly or half yearly or annually. If in case you are a senior citizen the rate of interest on your FD might even go up.

There are two kinds of FDs-
Bank and Non-banking financial institutions FD – This kind of Fixed deposits are offered by banks and non-banking finance companies the RB regulates th4ese institutions.

Corporate FDs - These are offered by the companies that are in the hunt to raise money from the open market. Corporate FDs give you a higher rate of interest but at the same time it also has a higher risk quotient when compared to the bank FDs.

Here are the Pros –
FDs give a safe return – FDs are more than secure and very low-risk investments, bank FDs are guaranteed up to Rs 1 Lakh by the deposit insurance and the credit guarantee corporation.

You can take a loan against your FD -
You can borrow up to 85% of the FD amount in some banks this can happen only after a few months of the existence of your FD however this is valid only for Bank Fds and not the NBFC FDs or the Corporate FDs.

Low maintain –
Unlike other investments like stocks, mutual funds or real estate, you do not have to keep an eye on your FDs daily or monthly or undertake any kind of risks or maintenance work.

Here are some of the cons-

Low Returns –
The FDs are very low-risk investments and hence even though the returns are guaranteed they are on the lower side especially when compared to the other investment options like stocks, shares and real estate.

Lock ups –
once you create an FD account and you deposit your amount in your account for the decided tenure, you cannot withdraw the amount before the expiry of the tenure. If the e arises and you do have to withdraw each you have to pay the penalty for pre-withdrawals which would include a reduced interest rate and charges around 1% of the amount that we invested.

Everything you need to know about online tax payment

Nowadays you don’t need to fill up cumbersome details or wait in the queue with other tax payers to pay your tax. You can pay your tax online.  To pay taxes online, you have to log in to the http://www.tin-nsdl.com > Services > e-payment: Pay Taxes Online or you just have to click the tab "E-pay taxes" provided on the said website. Provide a proper link of e-payment.

The next step would be to select the pertaining challan i.e. ITNS 280, ITNS 281, ITNS 282, ITNS 283, ITNS 284 or Form 26 QB demand payment (only for TDS on the sale of property) as applicable.
Once that is done you have to punch in the PAN / TAN (as applicable) and other mandatory challan intricate details like accounting head under which payment has been made, the address of the person who is paying the tax and the bank through which payment is to be done etc.

When you have submitted the data that you had entered, there will be a confirmation screen will be displayed. If PAN / TAN is valid as per the ITD PAN / TAN master, then the full name of the taxpayer as per the master will be displayed on the confirmation screen.

On confirmation of the data so entered, the next step will be that you or the taxpayer will be directed to the net-banking website of the particular bank.

The taxpayer has to login to the net-banking site with the user id / password provided by the bank for net-banking purpose and punch in the details of the payment that is to be made at the bank website.
When the payment is successful, a challan counterfoil will be shown containing CIN, payment details and bank name, this is the same bank through which the electronic payment has been made. This is also the counterfoil and is also a proof that the payment of the tax has been done.

These steps that facilitate an easy online tax payment have eased a lot of difficulties and paperwork for the tax paying citizen of the country. All these latest developments in the realm of the Prime Minister Mr. Narendra Modi’s call to make a digital India. These latest developments are all an indication that India is slowly but steadiliy is moving towards a developmental goal that has been dreamt about by the Prime Minister of the country.

The online method of payment of taxes is being accepted widely by all and sundry. Everyone has been talking high of the online tax payment initiative and there has been a massive response from people all over the country and that is perhaps one of the biggest achievements for the BJP led government in the country.

All You Need To Know About The Features Of An RD Or A Recurring Deposit Account

RD offers you a fixed interest on the amount that is invested with specific frequency till the term that has already been predetermined or upon maturity. At the end of the term the amount upon maturity which also would happen to be the invested capital is paid along with the remaining and accumulated interest.

The following are the main features of an RD account

Recurring deposit schemes are made in order to inculcate the habit of savings amongst public; the lowest amount that can be deposited in an RD account varies from one bank to another, and however the amount can be as small as Rs 10.

The minimum period of deposit stars from a meagre six months and the maximum tenure till which a customer can deposit his money is 10 years. The rate of interest is equal to that offered for a fixed deposit and is hence higher than any other savings scheme. Premature and midterm withdrawals are not allowed in a recurring deposit account and this feature is semblative to the feature in fixed deposits. If that happens the depositor has to pay a minimal fine for premature withdrawal. In a recurring deposit account the depositor can let his savings in the account and at the same time can take a loan on the amount by using it as collateral. About 80% to 90% of the amount can be given to the RD account holder. The RD account can be funded from time to time according to the standing instructions which are actually the instructions that have been given by the customer to the bank to credit the RD account every month from his or her savings bank account.

Duration of the RD account

The customers are free to choose the tenure. They can make their calculations and choose the tenure which suits best. In an RD account the compounding of the interest will be done on a quarterly basis. The deposit term begins with a minimum period of 6 months and it goes up to a period of 10 years. However the minimum period for an RD account depends on the banks as well.

Eligibility for holding a Recurring deposit account

Most Indian banks offer resident Indians and Hindu undivided families the opportunity to open an RD with them. What’s more some banks even offer RD schemes for children and on this case the minors too are eligible to open an RD account but of course they do need the supervision of their guardians so that the finances can be taken care of.

These are some of the points to be kept in mind about RD accounts.

What is a trading account?

When a company lists on the stock market, its shares become available for trading on the stock exchange. Earlier, the exchange had an open-outcry system. In the mid-90s, the stock exchanges adopted the electronic system. This means, all trades were conducted electronically. Simply put, you didn’t have to go to the counter and place an order physically. You could do it through a computer, which would verify the details, the market price, and process the trade.

For this reason, you need a special account through which you can conduct transactions. This is called the trading account. Without one, you cannot trade in the stock markets. You register for an online trading account with a stock broker or a firm. Each account comes with a unique trading ID, which is used for conducting transactions.

WHAT IS THE DIFFERENCE BETWEEN DEMAT AND TRADING ACCOUNTS?

Yes. A trading account is used to place buy or sell orders in the stock market. The demat account is used as a bank where shares bought are deposited in, and where shares sold are taken from. Trading account with Kotak Securities helps you trade seamlessly in the stock market.
Let’s use an example.

You have Rs.100 in your wallet. You go to a shop and tell the seller that you want a packet of chips, you check the price, and finalize the transaction. Then, you take the money out of your wallet and give it to the seller. In this case, the wallet acts as the demat account, while you act as the trading account.

HOW TO OPEN AN ONLINE TRADING ACCOUNT?

Just like the demat account, a trading account is a must for investing in the stock market. This is because to trade in the stock markets, you need to be registered with the stock exchange. Stock brokers are registered members of the exchanges. They traditionally conduct trades on your behalf. Most often, stock broking firms have thousands of clients. It is not feasible to take physical orders from every client on time. So, to make this process seamless, it is advisable to open an online trading account. Using this trading account, you can place buy or sell orders either online or phone, which will automatically be directed to the exchange through the stock broker.

All about Netbanking

Netbanking, also known as online banking, e-banking or virtual banking, is an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution's website. The online banking system will typically connect to or be part of the core banking system operated by a bank and is in contrast to branch banking which was the traditional way customers accessed banking services.

To access a financial institution's online banking facility, a customer with internet access will need to register with the institution for the service, and set up a password and other credentials for customer verification. The credentials for online banking is normally not the same as for telephone or mobile banking. Financial institutions now routinely allocate customers numbers, whether or not customers have indicated an intention to access their netbanking facility. Customer numbers are normally not the same as account numbers, because a number of customer accounts can be linked to the one customer number. Technically, the customer number can be linked to any account with the financial institution that the customer controls, though the financial institution may limit the range of accounts that may be accessed to, say, cheque, savings, loan, credit card and similar accounts.

The customer visits the financial institution's secure website, and enters the online banking facility using the customer number and credentials previously set up. The types of financial transactions which a customer may transact through online banking are determined by the financial institution, but usually includes obtaining account balances, a list of the recent transactions, electronic bill payments and funds transfers between a customer's or another's accounts. Most banks also enable a customer to download copies of bank statements, which can be printed at the customer's premises (some banks charge a fee for mailing hard copies of bank statements). Some banks also enable customers to download transactions directly into the customer's accounting software. The facility may also enable the customer to order a cheque book, statements, report loss of credit cards, stop payment on a cheque, advise change of address and other routine actions.

Today, many banks are internet-only institutions.

Due to netbanking A customer can do non-transactional tasks through online banking, which include Viewing account balances, Viewing recent transactions, Downloading bank statements, for example in PDF format, Viewing images of paid cheques, Ordering cheque books, Download periodic account statements, Downloading applications for M-banking, E-banking etc.

• Bank customers can transact banking tasks through netbanking, including – Funds transfers between the customer's linked accounts, Paying third parties, including bill payments (see, e.g., BPAY) and third party fund transfers, Investment purchase or sale

• Loan applications and transactions, such as repayments of enrollments, redit card applications, Register utility billers and make bill payments

Steps to take for a smarter education loan borrowing

With the education field getting more competitive with each passing year, more and more individuals are pursuing the highest most possible education qualification in their respective fields.

However, with this progression comes the financial requirement which can be easily satisfied with an education loan. But like any other loan, you as an applicant will need to be smart about it. Without the right steps and strategy, you may soon find yourself with a debt that can last a lifetime and cripple your finances.

The trick here is to be a smart loan borrower. Here are some steps you can consider:

Step #1 - Borrowing the loan from the right institution: There are several financial institutions that you can consider when it comes to borrowing a loan. On one hand, there are several banks you can consider. On the other, there are several private financial institutes that you can consider. Each of these institutions will offer you a wide variety of benefits. Choosing the bank loan will offer you several benefits for a long term, as you can use the linked bank account to make the fund transfer more convenient, if not more manageable shortly.

Step #2 – Weight your anticipated debt with the anticipated income: At some point in your life, you will decide on the type of career you would want to pursue. Once you have your career in mind, you can easily plan the type of career you want, and the income you would expect or generate. Take, for example, the careers of the MBA, medical, dental or a law student will be easier to plan after graduation. This is an important step, as it will help you plan and take the appropriate loan borrowing decisions. This will include the type of school institute you would want to attend, the approximate income and payments you would need to make and take. As a result, you may choose to attend a school with a low tuition or even borrow less.

Step #3 – Use an education loan calculator: It is better to understand the true cost of your financial decisions so that you do not face any surprises anytime later. This is why it is imperative you get the estimated cost of your education loan before you start the loan application process. You can use the loan calculator to calculate the appropriate amount that will suit you and how much you can actually afford.

Step #4 – Develop a loan repayment programme: Borrowing the appropriate loan is not the end of your journey, although it may be an easy step to take. In fact, as much as the loan is your priority, so should be the repayment. This is a crucial step you will need to take, even before you borrow the loan. With a repayment plan in place, you will know what to expect when the first repayment summons begins and enjoy financial freedom.

All about investments and investment banking

An investment bank is typically a private company that provides various financial-related and other services to individuals, corporations, and governments such as raising financial capital by underwriting or acting as the client's agent in the issuance of securities. An investment bank may also assist companies involved in mergers and acquisitions (M&A) and provide ancillary services such as market making, trading of derivatives and equity securities, and FICC services

Unlike commercial banks and retail banks, investment banks do not take deposits. From the passage of Glass–Steagall Act in 1933 until its repeal in 1999 by the Gramm–Leach–Bliley Act, the United States maintained a separation between investment banking and commercial banks. Other industrialized countries, including G7 countries, have historically not maintained such a separation.

The two main lines of business in investment banking are called the sell side and the buy side. The "sell side" involves trading securities for cash or for other securities (e.g. facilitating transactions, market-making), or the promotion of securities (e.g. underwriting, research, etc.). The "buy side" involves the provision of advice to institutions that buy investment services. Private equity funds, mutual funds, life insurance companies, unit trusts, and hedge funds are the most common types of buy-side entities.

Investment banking is split into front office, middle office, and back office activities. While large service investment banks offer all lines of business, both "sell side" and "buy side", smaller sell-side investment firms such as boutique investment banks and small broker-dealers focus on investment banking and sales/trading/research, respectively.

Investment banks offer services to both corporations issuing securities and investors buying securities. For corporations, investment bankers offer information on when and how to place their securities on the open market, an activity very important to an investment bank's reputation. Therefore, investment bankers play a very important role in issuing new security offerings.

Corporate finance is the traditional aspect of investment banks, which involves helping customers raise funds in capital markets and giving advice on mergers and acquisitions (M&A); this may involve subscribing investors to a security issuance, coordinating with bidders, or negotiating with a merger target. A pitch book of financial information is generated to market the bank to a potential M&A client; if the pitch is successful, the bank arranges the deal for the client. The investment banking division (IBD) is generally divided into industry coverage and product coverage groups. Industry coverage groups focus on a specific industry—such as healthcare, public finance (governments), FIG (financial institutions group), industrials, TMT (technology, media, and telecommunication), P&E (power & energy), consumer/retail, food & beverage, corporate defense and governance—and maintain relationships with corporations within the industry to bring in business for the bank. Product coverage groups focus on financial products—such as mergers and acquisitions, leveraged finance, public finance, asset finance and leasing, structured finance, restructuring, equity, and high-grade debt—and generally work and collaborate with industry groups on the more intricate and specialized needs of a client.