What can you expect from a cut in the repo rate for home loan interest rates?

A Home Loan at low interest rates is an idea that would definitely appeal to you. It is possible for you to enjoy the benefits of minimal home loan interest rates if you are aware of repo rates. By definition, a repo rate is the rate at which commercial banks borrow from the central bank. A cut in this repo rate would mean significant benefits if you are looking to take a home loan. You can expect the following things from a cut in the repo rate for home loan interest rates:

• More funds for banks- Repo rate is the interest rate that the central bank charges commercial banks for lending funds. When there is a cut in this rate, commercial banks will find it preferable to borrow more from the central bank. This in turn will allow the banks to increase their credit creation market, that is, to give out more loans to their customers.
• Reduced EMI for home loans- With a cut in repo rate banks usually pass on the benefits of lower interest rates to the consumers. They do this by giving their customers cheaper loans. In case of big ticket loans like home loans this will mean reduction in EMI.
• Reduced cost of credit- A cut in the repo rate also means that the banks are most likely to provide more number of big ticket loans to their customers. This will be beneficial for you as it will result in reduced cost of credit for home loans.
• Option of switch over to MCLR rate regime- For base rate borrowers, that is, those who have borrowed from banks at the lowest available rates, a cut in repo rate can provide added benefits. It gives them the option to switch over to MCLR (marginal cost of fund based lending rate) rate regime. MCLR rate regime offers the customer an option to reset the interest rate once every year. In this way they can take advantage of lower home loan interest rates.

So a cut in the repo rate, that is, the interest rate decided by the central bank for lending funds to the commercial banks, will provide the commercial banks with an initiative to borrow more from the central bank. Subsequently it will allow the banks to expand their credit creation market. This in turn will lead to the banks providing home loans to their customers at reduced cost of credit and will also bring forth a reduction in EMI for home loans in case of new customers. So if you are looking to take up a home loan or you already have one, keeping an eye on the current repo rate scenario may prove beneficial for you.

Reasons Why Should You Invest In Multiple Recurring Deposits

Have you ever wondered how nice it would be if you could have enough money to buy the thing you always wanted? For example if it’s that new phone you were craving to buy for a long time now or that leather jacket that so you were dying to buy for years now. All this can be possible if you take small steps in the present. Invest in multiple recurring deposit accounts today to reap the fruits of your labour in the future. And if you are still not wholly convinced why, read on to find out.

Here are some reasons why you should invest your money in Multiple Recurring Deposits.

• Completely Risk-Free- Investing in multiple recurring deposit accounts is a risk-free affair and there are assured returns on your invested amount. It is an extremely useful option if you have short-term goals in mind. As opposed to probably a fixed deposit where you would have to deposit a lump sum amount at the time of opening the account and leave it untouched for that stipulated period of time.

• Baby Steps- Some banks give you the benefit of investing in amounts as small as rupees 100. So if you are someone with a low income right now or someone who is at an entry level/fresher you can also invest in a recurring deposit.

• Your Finger In Many Pies- If you have multiple goals in mind such as your child’s school/ college tuition fees, your home loan, buying a new phone or saving up money for your daughter’s/son’s wedding, then multiple recurring deposit accounts would save you the hassle of keeping aside money for such various plans. The minimum duration of investment in majority of banks is one year.

• Enjoy Hassle Free Deposit- Many banks save you the trouble of investing in money manually. If you have a set amount you want to set aside every month for different goals then the concerned bank (giving you this benefit) will subtract this money from your monthly credited amount. So you do not have to stress about it or keep track yourself.

• Seniority Matters- The interest rates for recurring deposit account is determined by different banks based on the amount you decide to invest every month and the tenure of investment. Numerous banks offer senior citizens special benefits and rates. Senior people should opt for banks that have this feature to avail at best rates for their investments.

So, you see, whether you are starting out new in the world of employment or are a retired person or senior citizen the world of recurring deposits offers you numerous benefits to avail and enjoy. So be wise and invest your finances in multiple deposits today.

How to manage your bike insurance premiums with these tips

In India motorcycles and scooters are a popular mode of private transport, primarily because they are more fuel efficient and are easy to maintain as compared to a car. Moreover, bikes are easier to navigate on Indian roads and streets. As per the Indian law, a motorcycle has to be insured. While insurance prices are constantly on the rise, one needs to choose carefully so as to get the most out of his bike insurance.

Here are a few ways through which one can effectively manage their bike insurance premiums-

Try to maintain a clean record

You are more likely to avail a good premium deal if you are a safe driver. Thus, if one does not have a history of road accidents and has a clean slate when it comes to rash riding, they can avail a much lower premium for the insurance coverage.

Make a wise choice when purchasing a bike

This is a very important factor to consider when it comes to managing bike insurance premiums. If the bike that one purchases is very expensive and has a hi-tech engine and over the top features compared to the present market standards, the premium on the bike insurance will also be quite high. If a good but standard bike is purchased instead, its premium will be comparatively lower and more managble.

Make yearly premium payments

Pay the premium amount on a yearly basis rather than monthly basis. This way one may pay less on the total amount. A number of insurers reduce the premium amount if it is paid all at once.

Become a part of a riding association

Almost all bike insurers offer a small discount to members of a riding or Automobile Association.

Take proper security measure

Make sure that the bike is secure against any vandalism or damage. Insurers lower the premium payment in case of bikes that are equipped with effective safety measures.

Try not to claim insurance for small damages

Avoid claiming insurance in case of a small scratch or a mere dent. Get it fixed and pay for it yourself. This way one can enjoy a no-claim discount at the end of the year. If one does claim insurance for a tiny damage, he will not get a no-claim bonus for that year.

Opt for package deals

Insurers prefer that their customers opt for multiple policies. Thus, if one already has home insurance say with insurer A, opt for a bike insurance with him as well. He may offer a discount on the premium.

Why using the NEFT service will benefit you for fast transfers

National electronic funds transfer (NEFT) is a popular method of transferring funds online all across the country. Through this system of payment an individual can transfer a sum of money from one bank to another individual who has an account in another bank under the same scheme.

All one needs in order to do an NEFT is- internet connection and a net banking account. Banks generally charge a very small amount during an NEFT, but even so it is still a comparatively cheaper option than a RTGS transfer (Real Time Gross Settlement).

The charge for a NEFT transaction generally differs from one bank to another. But a bank cannot charge more than 30Rs for transactions up to 2-5 lakhs and more than 55Rs for transactions higher than 5 lakhs.

How is NEFT done and who can avail this service?

While a NEFT transfer can be quite conveniently done via internet banking, one may also initiate a transfer through the branch directly.

If one has a savings account or a current account at a bank, they can avail the NEFT service. Any sum of money can be transferred through NEFT, but there are some banks that do have a limit.

Those who do not have an account are also allowed to make a cash deposit at any bank that allows NEFT. But in this case only a certain amount and not above that may be transferred.

Speed of transaction through NEFT

Although NEFT is quite a convenient way to transfer money, earlier the transaction process did take some time to complete. This is why many individuals opted for other transfer methods in case of an emergency transaction.

But this year, the Reserve Bank of India (RBI) is all set to make this transaction system faster and better. Fund transfers will now be done in half hour intervals. Before they were undertaken every hour.

The settlement cycle has now been increased to 23. Previously it was 12. When one makes a bank transaction, a clearance request is forwarded to the RBI, and the RBI processes it in the following settlement cycle. Therefore, as the cycles will increase this will facilitate faster transfers.

The settlement time will being at 8 am in the morning and end about 7 pm in the evening. With the introduction of 11 more settlement batches, the RBI strives to make customer service more efficient and increase the speed of the entire NEFT process.

One should thus opt for NEFT, in order to carry out transactions and payments. With the new updates that RBI is brining into play, a NEFT transaction well be quite fast and efficient.

GST Payment: Myths busted

The last couple of years have brought in great economic changes into the country, with demonetization during the end of 2016, and GST taking over 2017. With the launch of the good and services tax (GST) this year, a lot of discussions are being done on the extent of its effectiveness, and if this will be a simpler form of taxation system in comparison to the previous one. This has led to the rise innumerable rumours about goods and service tax payment.

Here are some popular myths about GST, and the actual truth behind them-

1. One system of tax for the entire nation- This is definitely a myth!
While this was the initial idea of GST, at the time of it launch certain products like petrol, diesel and liquor were exempted from GST payment. Which is why petrol prices are still high in some states of the country while comparatively lower in other states.

2. Small business will face difficulties- No True!
Many were of the opinion that small business men will go through tough times with the launch of GST payment, primarily because they will have to switch to computerised billing. This is not true as manual billing is allowed under GST. Internet connection is only essential when the monthly return has to be filed. This can be easily done from a cyber-centre.

3. GST is the only direct form of tax, no other tax will be in place- This belief has proved to be a complete myth!
Primarily because GST is only charged instead of central and state taxes. Local body taxes are not included under GST payment. For example, the government of Tamil Nadu has permitted its local bodies to take a 30% tax on film tickets, excluding tax that needs to be given as GST, making movie tickets extremely expensive. This led to a strike in the state, which was called by cinema hall owners who were obviously not happy with this decision.

4. Prices will rise, creating inflation- This has also proved to be a myth!
While the government may have increased the tax rate on some goods, taxes have also been lowered in case of many consumer good items. Moreover, earlier there were a number of hidden taxes that one did not see in their bill. With the launch of GST, the full tax is now visible to the consumer. For instance, the prices of any chicken dish in Kerala should fall considerably, because earlier about 14.5% tax was charged on live chicken in the state, but now there is 0 tax on the same.

Why should you be making your online tax payment today?

Sorting out taxes has never been an easy job. It involves major paperwork and is generally quiet time consuming. But it is a necessary evil and cannot be ignored.

One effective way of dealing with taxes is switching to online tax payment. By doing this, one can save himself the trouble of extensive paperwork and stamps when it comes to filing taxes. Switching to online tax payment, will also allow one to organize his taxes better and make payments promptly.
You can pay a number of different taxes online, such as- Service tax, wealth tax, corporation tax, tax deducted at source (TDS), central excise tax as well as income tax.

Here are a few reasons why one should shift to online tax payment today-

It is a speedy process

Tax payments can be made within minutes when done online. All one needs to do is schedule their payment date and mark their calendar. You do not have to bear the burden of filing taxes through mail, and worrying if it will reach on time.

Convenient

One does not have to wait in long lines in order to file their taxes. Payment can be done online anytime from anywhere. All that one requires is an internet connection and a laptop or computer.

Easy to file taxes and make payments

Once you start online tax payment, one will have to follow a simple process that will help him schedule tax payments regularly. When this process is complete, all that is required is an online transaction of the amount on the scheduled date.

Safe to use

Online tax payment is quite safe. User information is confidential and has to be typed in every time in order to log in.

Timely payments

As payments can be scheduled well in advance, a person knows exactly when he needs to clear his taxes and is less likely to miss the date. This also helps with effective planning. While businesses are allowed to schedule online tax payment about 120 days before it is due, individual taxpayers can schedule their tax payment a year in advance.
 
Once the online tax payment is done, one will receive a digital copy of the acknowledgement of the same. In order to maintain a physical record just take a print out of the copy of the challan for future reference.

Online tax payment will greatly reduce the pressure and stress involved with the filing and payment of taxes every year. The process of enrolment may seem tedious initially, but it is for the best.

What is the difference between a trading account and a demat account?

In order to conveniently deal with shares in the stock market of the country, it is essential to have a trading account as well as a demat account. While before the 90s, shares were physically sold and bought, sometime during the mid-90s, the purchase and sale of shares shifted to electronic transactions, which made it necessary for share traders to hold a demat and a trading account.

To understand how the share market and trade works, one has to first establish the difference between these two types of accounts-

Nature of use

While shares purchased or meant for sale are stored in demat or dematerialised accounts, their transaction is done through a trading account. Thus, a trading account acts as an arbitrator between the bank and the demat account. The trading account takes shares from the demat account and makes them available for trade at the share market.

Hence, while a demat accounts acts as a savings account, the trading account works as a current account.

Difference in function

Financial instruments, for instance securities as well as shares, are retained by a demat account. A demat account can also convert electronic securities to their physical form. On the other hand, the purchase and sale of such financial instruments is done via the trading account. If one deals with trade in futures and currency only, just a trading account is enough. But if one also trades in stocks both demat and trading account are necessary.

Account fees and charges

While one can open more than one demat account or trading account, a certain fee is charged. In case of demat one needs to pay a yearly maintenance charge for each account he owns. Moreover transaction and custodian fees also have to be paid.

In case of a trading account a certain fee is charged when the account is opened. One incurs no extra costs afterwards.

Process of account opening

A PAN card and a Voter’s ID card have to be submitted so as to own a demat account. But in the case of a trading account, the only pre-requisite is the existence of a demat account.

To make the entire process of stock trading easier, a number of banks offer customers the convenience of managing 3 different types of accounts- demat, trading and a savings account through one single bank account. Therefore, when opening a trading and demat account check if the bank is offering this type of service. It will definitely make purchase and sale of shares more simple and convenient.