Travel financially smart on your travels abroad with the multi-currency card

A multi-currency Forex card is a prepaid card in which multiple currencies can be loaded. They are front-loaded cards that offer a traveller who is going overseas the convenience of using it as a normal debit or credit card. This card provides protection and security from currency fluctuations, cross currency transaction charges and also allow for minimum charges to be levied on using this card at overseas ATMs. This multi-currency card saves a person the trouble associated with finding currency exchanges, cashing traveller’s cheques or carrying a lot of cash when he or she is travelling abroad.

The benefits associated with the multi-currency card are as follows:

• If a traveller is travelling to multiple countries, he does not have separate cards for different currencies. Only one card would suffice.

• There is no need to search for any outlet to encash the amount loaded in the card or to convert currency.

• You can use the card at merchant outlets as well as for regular e-commerce transactions.

• It enables you to withdraw cash from any Visa or MasterCard outlet with minimal charges.

• Do not worry about paying your bills when you are dining outside or indulging in any form of entertainment as this card will take care of all that.

• Furthermore, this card is widely accepted by merchants and ATMs.

In addition to these features, this multi-currency card have other benefits like:

• You can have a pleasant shopping experience when you are abroad. This is because it enables you to pay in the currency with which you are most familiar and help you take informed decisions.

• There are no hidden charges. Whatever you spend is reflected in your card statement as it is.

•  These cards are actually less expensive than credit cards when you are travelling abroad. This is because in case of credit card, the rate of exchange rate applied is the day’s rate. While for this card, the rate of exchange is fixed the day you purchase this card.

• It will be difficult for somebody else to use this card even if it is lost or stolen because the card is protected by a Personal Identification Number.

Today, more and more people from India are travelling abroad every year. What they require inevitably is foreign currency before they embark on their trip. The multi-currency card has made foreign travel much easier and hassle-free. This card can be used even in remote areas of a country which you are visiting and where the Dollar or Euro is not so prevalent. This helps the local traders and allows you to have a holiday experience like no other. Some cards also offer good deals on air tickets and holiday packages and even provide you with travel insurance. This means it is a win-win situation for you.

Why a current account is a must for entrepreneurs?

A Current account, also known as a demand deposit account is a bank account suitable for businesses. Though it may seem like a normal account, these accounts offer more features than a savings account. Current accounts actually play a very important role in determining the health of the economy. It is the sum total of the balance of trade (goods and services exported minus the imports), net income from abroad and net current transfers. A positive current account balance indicates that the nation is a net lender and vice versa.

A current account can be opened with a financial institution such as a commercial bank or co-operative bank with a minimum balance starting from INR 5000. Some banks also offer zero current balance accounts. Because of the various extra features it has over savings account, you can not avail any interest on the money in your current account.

Since the number and amount of transactions is not limited in current account, it is extremely handy in the smooth functioning of your business on an everyday basis. A Current account is the life blood of modern trade and commerce. Listed below are some of the major factors that why current account is a must for entrepreneurs:

• One of the key aspects of a current account is that it has an overdraft facility. You can borrow money from the bank through your current account on a short term basis.

• By having a current account you have a clear picture of your business and its growth. It helps you in showing the actual profit and loss statements as it does not offer any personal transaction feature.

• It enables you to carry out your everyday business transactions promptly and properly so that your day to day business activities do not suffer on an account of financial issues.

• It is also very useful to businesses as it allows them to make direct payments to their creditors through cheques, demand draft and pay orders.

• The number of transactions and the withdrawal amount is not limited as compared to a savings account which help you to carry out as many transactions as needed.

• Many companies ask for credit worthiness letter from the bank before handing over a project. So if you have a current account which is well maintained without any defaults, you can get a recommendation for your credit worthiness without any hiccups.

• All the transactions made in your current account are eligible for tax exemptions. These tax exemption feature helps the business save money on taxes.

Having a current account for your business also gives you a more professional presence. At the same time it gives you more flexibility to carry out your business as compared to a savings account.

Why the demat account should be your first account for investing?

Demat account stands for de-materialized account. This account is similar to your bank account; the only difference is that instead of money, it holds your stocks and other financial instruments in paperless or digital format. Earlier the trading of shares and mutual funds or other financial instruments were done on paper and you needed to retain a copy in order to prove your claim as an investor. Thanks to the internet which has paved the way for the demat account, now you can hold all your investment online.

If you are planning to invest in stock market, the first thing you need is to open demat account along with a bank account and a trading account. Companies into banking and broking generally offer you all the three accounts combined together known as a 3 in 1 account. You need to open demat account with a depository participant (DP) via your bank or other financial institutions, the two DP registered under SEBI are National securities depository limited (NSDL) and Central depositories securities limited (CDSL).

The need for having a demat account and its advantages:

In order to deal in securities in the Indian stock market, it is mandatory for you to open a demat account with depository participants (DP). Once you have the demat account registered under any of the depository participants, you are all set to buy and sell stocks and securities at will. Investing in stocks and securities through a broker and having a personal demat account gives you far more freedom and advantages, such as:

• It is the most convenient way of dealing in securities as all the transactions are carried out online. You are able to buy and sell securities from anywhere on the go.

• It ensures immediate buying and selling of securities as all the transactions are done electronically.

• It saves you a lot of time and hard work as compared to paper transfers as you don’t have to keep track of huge paperwork.

• The risks associated with paper securities such as bad delivery, fake securities, delays and thefts are totally eliminated.

• There is no limit for purchasing and selling of securities. You can even buy and sell one security at a time.

• The transaction cost is very low compared to paper securities as you don’t have to pay any stamp duty.

Because of the above mentioned points, a demat account is very much helpful especially for new investors, who are totally unaware of the workings of the share market. It allows you to be free from stress by providing maximum freedom while choose transactions according to your needs.

What are the do’s and don’ts of internet banking?

Internet banking is a system which allows individuals to perform their banking activities at home via the internet. Some online banks also have a physical presence while others are online only. A customer can perform all routine transactions like account transfers, balance inquiries, make payments and even apply for loan or credit cards. The most important feature of this mode of banking is that it enables a person to conduct your banking activities from the comfort of his home and at any time of the day.

Some people are skeptical about using internet banking and this is not without cause. In spite of all the advantages, there are quite a few drawbacks of this mode of banking. Unscrupulous people may try to trick you and steal your money from account if you are not careful. However, the primary advantages of banking over the internet are as follows:

• You do not have to physically visit a branch but can do your banking from anywhere and at any time of your liking. The account is accessible 24 x 7.
• You can use a wide range of devices for conducting your business activities. For example- mobiles, tablets, computers, laptops or anything else that supports internet.
• All the transactions are updated immediately and this allows you to have access to your account information without going through the hassles of documentation.

There are, however, a number of dos and don’ts that you need to keep in mind while banking over the internet. They are:

• It is highly recommended that you choose a safe and secure password for mobile banking. You should not use family name, pet name, date of birth or any such commonly known names as your password.
• Do not provide account information if you receive any random e-mails asking for such. Do not divulge any information even if it is stated in the mail that it has come from a bank or any other government entity.
• You should always visit your bank’s banking site directly and avoid accessing the site through other third party link or e-mail. You should verify the domain name before you log in.
• You should log out of your internet banking site as soon as you are finished with your business. You should not close the window without logging out.
• You should avoid using public Wi-Fi and you should also install a suitable firewall and security antivirus to protect your computer and its contents.

While using your mobile to do banking,

• You should never save your log-in details or your password.
• Always keep your phone locked to prevent unauthorized use and also report loss of phone immediately to the bank.
• Never download apps from shabby websites and always log out of your account.
• You should keep a tab on your account balances regularly.

Inculcate these habits if you are banking over the internet and keep potential harmful elements at bay.

The difference between invest and protection

Whenever you think of the term insurance, the first thing that comes to your mind is protection. The insurance industry has evolved pretty quickly from insuring life to goods and services, and now there are companies that re-insure the insurance companies. Insurance is basically the promise of being compensated by a company in case of death, damage, loss, illness or theft in return for the monthly premium you pay. At present anything and everything is being insured by insurance companies.

The different types of insurance policy in India are endowment policy, term insurance, whole life insurance, children policy and annuity plans. People in India are getting more and more familiar with insurance and are using it for multiple reasons. The first and foremost part of insurance is that it is a protection against uncertainty, but many people are also using it as an investment.

The sole purpose of insurance is to cover your/ your family’s expenses in case of any mishap. There are different types of insurance policies that give you economic protection and also cover your risks in case you meet with an accident. Insurance policy covers your expenses and also encourages you to save money. Moreover, it gives you a sense of comfort and eliminates dependency. The most common insurance policy among Indians is life insurance which is further classified into whole life insurance and term insurance. Contrary to this some people also use insurance as an investment. Most people usually are unaware of how insurance can be used as an investment. Mention below is some of the points of how insurance can be used as an investment:

• Insurance gives a you a tax deferred growth that is you don’t have to pay any taxes on the interest, dividends and capital gains from the insurance until you withdraw the proceeds.

• There is no fixed term on life insurance which means you can keep it as long as you want and keep on getting earnings as long as you want.

• Insurance policy can also be used as collateral in buying a property on seeking a loan. This gives added advantage to policy holders as they not only earn from it but also use it as fluctuating capital.
There is always a debate when it comes to using insurance policy as an investment or protection.

Taking all the above points into consideration, it is always beneficial to use insurance as a protection as by disturbing the insurance amount and premium may lead to early expiration and also deprive you of some of the benefits that you have.

Why the festive season is the best time to purchase a car with a car loan?

Buying a car has become more of a status symbol than being just a necessity. Banks are offering loans at competitive rates to lure customers into availing these loans. Furthermore, many people look forward to buying a car during the festive season. This is due to the fact that both banks and non-banking finance companies usually lower their lending rates on car loans and even offer subsidies on processing fees. Some banks even offer 12-month loan waivers. In spite of its pros and cons, availing a car loan has enabled many people from middle-class backgrounds to buy their own car.

Some of the benefits of availing a car loan are as follows:

• Wider eligibility – Due to the presence of numerous financial institutions which are offering loans at competitive rates, more and more people are getting their loan applications approved. Anyone with a basic minimum source of income is getting eligible to get a loan to buy a car.

• The procedure to apply for a car loan has been simplified by banks to attract more customers. The documentation and approval processes may require less than a day.

• It is becoming more and more convenient for people to avail a car loan as banks are providing up to 95 % of the on road price of the car. This saves a customer the trouble of bearing the expenses of accessories, insurance and registration.

• The car can be treated as collateral in case of such a loan and eliminates the requirement of providing other property as additional security for getting a loan. Furthermore, the car loan lets the borrower be the complete owner of the vehicle and enables him to do whatever he/she pleases with the vehicle.

• The financiers allow the borrower to choose the repayment plan according to his/her capacity. If a borrower pays a higher margin amount, he can reduce the amount of the EMI that he needs to repay over the stipulated period of time.

• Finally, dealers of cars are ready to provide you with more benefits and thereby reduce their commission margin. This is because they are under pressure from their higher authorities to increase the sales volume and this actually benefits the customer.

The festive season in India is a period of time when many people all over the country buy houses, apartments, cars and other luxury items. Banks and financial institutions provide all sorts of perks to attract customers. And these are not always false promise. Lower interest rates sometimes enable a customer to buy a car at a price lower than what he would have paid had he bought the car during some other time of the year. A good credit standing and sufficient savings in your account place you in good stead to get a loan to buy a car.

Personal loan Interest rates: How does it impact you?

Personal loans also known as consumer loans is an unsecured loan which are given on the basis of the borrower’s credit history and the ability to repay the loan from his/her personal income. It is mostly taken on short term and the interest rates vary from bank to bank and person to person. Personal loan interest rates in India range from 11% to as high as 22%.

You can avail a personal loan in India of up to Rs 30 lakhs. The personal loan interest rate in India depends on many fixed and variable factors. Fixed factors are those which are set by the central bank that is the Reserve bank of India and must be followed by all the banks. They are:

• Repo rate – the rate at which the Reserve bank of India lends money to bank in case of any shortage. The repo rate is a tool to control inflation as the reserve bank of India lowers the repo rate if it wants to put more money in circulation and vice versa.

• Reverse repo rate- the rate at which the banks lend money to the reserve bank of India. It is a fiscal tool used to monitor money supply by the reserve bank of India.

• Cash reserve ratio- the percentage of money that banks has to keep with the reserve bank of India is called the cash reserve ratio (CRR).

• Statutory liquid ratio – it is the ratio between liquid assets (cash, gold) and the net demand and time liabilities (NDTL) that a bank has to maintain in order to meet urgent requirement of liquid cash to meet all the liabilities.

Considering all the above factors and the base rate which is also set by the Reserve bank of India to ensure transparency and low cost funding for personal loans, different banks have different variable factors which determine your loan amount and the personal loan interest rate. They are:

• Credit history – it is the sum total of all your credit taken earlier in terms of loan or credit card and the repayment of that credit. So if you have never defaulted in your repayments then you have a good credit/CIBIL score which will make you eligible for lower interest rates.

• Nature of employment – the nature of your job also determines the amount and the interest, whether you are salaried or self-employed. If salaried, then the status of your organization and if self-employed then the nature of your business.

• Bank-customer relation – if you apply to the same bank where you have an account, the bank generally gives a lower rate as you are an existing customer.