Reasons why you need an offshore bank account today

An offshore bank account is an account held by a resident of a country in a foreign land. This means that the account is not in your country of residence but is located in another country, generally having a low tax structure. The concept of having an offshore bank account gained popularity after the 1934 Swiss Banking Act. This act barred the bank employees or the bank authority in general from revealing details of any account holder to any government or agency. This urged the public to look into opening accounts in banks outside their own country to enjoy greater benefits. Following are the reasons why you should consider opening an offshore bank account immediately:

• Political Risk Dilution- One of the biggest threats to your savings can be the policies of your own government. The government may decide to increase bank deposit taxes like in Spain, or introduce capital controls like in Iceland. These measures can be taken up by the government to get more funds if they fail to meet their own financial requirements. Having offshore accounts reduces this risk as you can have savings outside your government jurisdiction.

• Currency Diversification- Offshore accounts can also act as a means to internationalize your savings. This means that you can hold your savings in foreign currencies in this type of accounts. It provides protection to your purchasing power and also diversifies your portfolio risk which is the risk related to each investment.

• High Interest Rates- The interest rates of all the commercial banks in a country are almost the same. There is not much variation among these interest rates. But if you decide to open an offshore bank account then your range of options increases multifold. You can then choose a bank provides you with higher interest rates.

• Secure Medical Care Abroad- Having an offshore account will ensure that you have access to your savings at all times. In case of medical emergencies where you may need to go abroad, it will save you the hassle of having to transfer funds from your home country for payment. You can easily use the savings in your offshore accounts for this purpose.

So, if you have one or more offshore accounts it will certainly prove beneficial for you in the long run. It will provide you benefits like high interest rates, save your savings from high tax rates and would also ensure medical and financial security in any case of emergency.

Do you know these secrets about Mutual Fund Investments?

Mutual funds are investment schemes that are professionally managed by banks or asset management companies. These companies or banks take deposits from the public and invest their money in bonds, shares and other securities. Investment in mutual funds is a great way to earn good returns in the long run. All mutual funds are registered with SEBI (Securities and Exchange Board of India) which is the regulatory body for securities market in India. There are many companies and banks that offer lucrative mutual funds investment schemes. However, there are some secrets about mutual fund investments that you must know before you invest your hard earned money in it:

• Truth about top performing funds- A common trend of investing or a common investment strategy followed by mutual funds investors is to invest in best performing funds. They tend to pick out the top bunch of funds looking at the past performance records and invest in those funds only. This is not an efficient strategy as the stock market is ever changing and every company suffers ups and downs. You should not invest in any fund solely on the basis of their previous records.

• Fund management charges- The truth about fund management charges is one fact about mutual fund investments that most investors are not aware of. The very low expense ratio of about one percent is one of the most misleading truths. Investors tend to think of it as one percent of the profit they earn when in reality it is one percent of their profits and their total investment capital. This makes up for a large sum of money that has to be paid as fees for managing mutual funds.

• Disguise of actively managed funds- Aggressive investors prefer to invest in actively managed funds based on their performance. Actively managed funds are costlier than index funds, that is, their fund management fees is a lot more as compared to index funds. However, these funds are nothing but index funds in disguise under fancy names. This leads to investors spending way more in fund management fees in comparison to the returns they get.

• ETFs are better- Exchange Traded Funds (ETF) have more liquidity than mutual funds. They can also be sold at real time rates at the stock exchange, that is, they can be traded at currently existing market prices. On the other hand mutual funds can only be bought or sold at closing NAV prices. This makes ETFs a better investment option than mutual fund investments.

These are some of the major secrets about mutual fund investments that most of the investors are unaware of. If you are well informed regarding the truth of these secrets it will prove to beneficial for you while investing in mutual funds.

How can an NRI benefit from the NRE account

In banking terminology, an NRE account stands for Non-Resident External account. It is an account meant for Indians who are not residents of the country, that is, the NRI. In India, NRIs cannot hold resident savings account as it is deemed illegal according to the regulations set up by FEMA. You can suffer huge penalties if you are an NRI and continue to use resident savings account. That is why you either need to convert your existing account into an NRE account or open a new NRE account. There are several benefits an NRI can enjoy from having an NRE account, such as:

Ease of opening account- It is very easy to open an NRE account. Anyone residing abroad can easily open it. You just need to fill up an application form online, take a printout of it and then courier it along with a self attested copy of all the required documents to the bank in India.

Investment of overseas earning- Having an NRE account allows you to invest your overseas earning in India. You can save your earnings in it and you can then invest them in India at a later point of time.
Joint Account- A key feature of this type account is that you can open it with another NRI as a joint holding account.

Repatriable funds- The funds accrued in an NRE account are repatriable. Both the principle and interest are fully repatriable.
High rate of interest- It gives you high interest rates on savings account as well as on fixed deposit accounts.

Tax benefits- There are no tax levied on the interest earned in NRE accounts. The interest earned on both savings account and fixed deposit accounts are not taxable. This is one of the major benefits of NRE accounts, and hence one of the biggest reason why you should open one if you are an NRI.

Low minimum balance- Another key feature of this type of account is the low minimum balance required to open an account. You do not need to deposit huge amounts as some banks allow you to open an NRE account with a deposit as low as ten thousand rupees.

So, if you are an NRI it is a good idea to have an NRE account. It can act as a place where you can deposit your overseas earning and get good interest on it without having to worry about taxes. It also provides you investment options and you can easily convert all your foreign earnings into domestic currency when you visit the country.

All you need to know about UPI Payment

UPI or Unified Payment Interface as it stands for, is an app or a payment system launched by National Payments Corporation of India (NPCI) that allows you to transfer money between any two bank accounts using your smartphone. The things that you need to know about this relatively new banking feature are as follows:

What can you do with it?
UPI is an app that allows you, the customer, to make payments from one bank account to both online and offline merchants. It saves you from going through the hassle of giving things like IFSC codes, net banking passwords, credit card details.

How to get it?
You can download the UPI app on your smartphone from the Google Play Store. At present, about twenty banks have launched their UPI apps on the Play Store.

What do you need to start using it?
To use this new feature launched by NPCI the first thing you need is a bank account. Then all you need to do is download the app on your smartphone from the Play Store and then install it. You need to set the app login, create a virtual address, add your bank account, set the M-pin and then you are ready to use it.

Is it safe?
UPI payment is a completely safe and secure mode of transaction as it shares only a virtual address created by you and does not provide any other sensitive information.

What transactions can you make using UPI?
You can use this feature of UPI payment to perform various transactions like bill payments, remittances, and merchant payments.

What is the transaction limit?
 You can make a money transfer up to Rs 1 lakh per transaction through UPI.

How to make a transaction?
The payment transaction using UPI is very simple. For the goods and services purchased online, you can make in–app payments. You just need to click on the buy option of any site or app and it will automatically trigger the link for UPI payment. Then you just need to verify the transaction details and enter a secure PIN to complete the transaction.

These are all the necessary information you need to know about UPI payment that was recently launched by the NPCI. It is a new feature in the sector of banking and making online payments in our country. It has not only made payment transactions easier but has also made it more secure and safe. You can now make UPI based payments in offline stores across the country instead of making cash payments.

What are the best investment options you can consider for a high returns?

The basic objective of investment is the need to obtain financial security. The general view of people is that they can earn more money if they work more. But you need to put in a lot of time and effort for gaining financial security if you are following this idea. This is where investment comes in. The concept of investment is to maximize your earning potential by making your money work for you. There are several investment plans that can help you get high returns. Some of the prominent and best investment options for high returns are:

• Mutual Funds- Investing in mutual funds is among the best investment plans that will give you high returns. It is a popular market choice that is guaranteed to give good returns in the long run. You can invest in mutual funds with an amount that is as low as five hundred rupees.

• Public Provident Funds (PPF) - It is one of the safest investment options that can give you good returns in the long run. Investing in PPF will lock your money for certain time duration in your PPF bank account or post office account but will provide you with tax free withdrawals.

• Company Fixed Deposits- Investing in Company FD schemes can be beneficial as it offers higher interest rates in comparison to bank FDs. You can use a fixed deposit calculator and plan your investment period accordingly.  It gives higher returns in the long run because once you invest in Company FD you are allowed to withdraw money from it only after the maturity period. This is why using an fd calculator before investing is a good idea.

• Real Estate- Investing in real estate is one of the best decisions you can make. It is a rapidly growing sector in the country. The biggest feature of this sector is the low risk of losing your capital as the rate of property tend to go up in very short periods of time.

• Shares or stocks- It is one of the most popular investment options. It gives high returns in a short period of time but also carry higher risks. You should research and analyze the stock or share if you plan on investing in it. Proper planning can yield high returns in long run.

• Post Office Schemes- It is a safe and secured investment scheme that can give you high returns. It has monthly income plans suitable for salaried employees and retired people with regular income. You can use fd calculators to know and plan your investment accordingly.

• Tax free bonds- Investing in tax free bonds is a good option for you if you are worried about taxes on high returns. It provides you good rates of return and you don’t have to worry about paying tax for it.
These are some of the best investment options that you can consider for high returns. You can opt for investing in any one of these options like real estate. You can also invest in multiple of these options like shares as well as Company FD using fixed deposit calculators to plan your investment properly and get high returns. Proper planning and a little bit of research before investment will ensure you good returns in the long run.

Rules to effectively trade on the stock market

The stock market is a place where public listed companies trade their stocks or shares. The companies on stock market sell their shares to attract investment and lower their risk factor. Investing in stocks or shares can prove to be beneficial in the long run. It can act as a passive source of income where you don’t need to work but you will still earn money. In order to effectively trade on the stock market you need to know certain things or follow certain rules like:

Have a trading plan- The first and foremost thing to do when you enter a stock market is to create a trading plan and follow it religiously. A proper trading plan should have a written set of rules that contains a well defined entry, exit and risk management strategy.

Do proper research- It is absolutely necessary to perform a proper research before investing in the stock market. You should do a thorough study of the companies you want to invest in instead of just investing based on the name or reputation of the company. Now-a-days you can even use the research and analytical tools available in your trading account for this purpose.

Invest in business you understand- It is better if you invest in business that you understand. Investing in stocks of a company that you have a decent knowledge about is better as compared to investing in a company where you don’t know what business the company is in.

Don’t time the market- Attempting to time the market is something you must try to avoid at all costs. It is a very inconsistent method as it is not possible to successfully time the market over multiple stock market cycles. It can in fact, lead to heavy losses in the long run.

Control your emotions- In order to add more dividends or returns to your trading accounts you must have control over your emotions. In the stock market you need to take decisions with a clear mind. You must not let your emotions cloud your judgments.

Invest only surplus funds- Investing in stock market can be a risky business. So you should always invest only the surplus funds that you have. Investing more than you can afford to lose will result in high chances of you suffering loss in the long run.

Learn from your losses- In trading, loss is a certainty. You will be successful at times and at times you will face losses. But it is important that you must accept your loss and learn from it. Learning from your mistakes will broaden your perspective and help you make better decisions in the long run.

So, trading in stock market requires you to learn to do proper research and observe the trends in the market over time. You must be patient and level headed if you want to be successful at trading in the stock market. Proper plans, good decision making ability and learning from your mistakes are some of the key rules that can help you trade effectively on the stock market.

Tips To Help You Manage Your Personal Loan With Ease

Most of you reading this article have at some point of time or the other taken a personal loan from the bank for purposes such as- travel, wedding, medical emergency, renovation, education, etc. It is a great solution for those of you aiming to avail of instant cash. So once you have taken a personal loan India how do you manage it?

Read these tips to find out.

Here are some tips to help you manage your personal Loan with ease.

• Debt Snowball Method-Firstly, start off by listing all the outstanding debts that you have by prioritizing the smallest one at the top or the head and then the next bigger one and then the next. So, after you have made the list and you realize that you have more than one personal loan to pay back, opt for the ‘debt snowball’ approach- here the order of paying back your loans works from the smallest to the largest one. This method helps you lessen the burden of repaying loans. However, some people consider this method to be a more long-drawn affair as opposed to the ‘debt avalanche’ approach.

• Debt Avalanche Method- The ‘debt avalanche’ approach works in a similar fashion but with few minor differences here and there. While you do begin by making a list but you order them not by their balance but by their interest rate. So in the debt avalanche method you go from the debts with the highest interest rate to the ones with the lowest. Number of people think this method to be money saving and in certain cases even faster.

• Ensure To Save- Most of the time people get so caught up in the thought of repaying back their loan that they forget to concentrate on their savings. Giving attention to one financial aspect shouldn’t mean that you completely neglect the others. Do not forget to invest in your retirement savings even while you are engrossed in managing your debts.

• A Little Disciple Goes A Long Way- Prioritize your financial liabilities and be disciplined about paying back your debts on time. If you make it a habit about paying them back your bills late and at random times you may have to face the problem of an escalation in rates. At this time do whatever it takes to keep your additional expenses low. By repaying back your debts on time every month you will avoid any chance of missing payments.

• The Right Bank- When considering taking a personal loan India choosing the right bank is extremely important. When you are selecting your bank keep certain criteria in mind such as- the reputation of the bank, their interest rates, their reliability and the refunding options. Keeping these things in mind will eventually help you to manage your personal loan with ease when you are trying to pay it back.