Here is how to manage your bank accounts when you return home

The evolving global development has seen many Indians returning to the country. This amounts to the change of their status from a Non-Resident Indian to an Indian Resident as far as money matters are concerned. One must inform their banks about changes in their residential status. The necessary paperwork is required to be followed to give effect to this change of status.

Here are few types of bank accounts that may in such cases. They are as follows:-

• NRE / NRO account- The first step to be taken when an NRI returns back home, is to
inform the bank about the change of status. The NRO and NRE account that he holds will have to be re-designated to resident savings account. NRO account or deposit must be then re-designated into a resident rupee account. FCNR and NRE account can be closed immediately or can be allowed to run up to maturity. And if anyone continues till maturity, he/she will be credited with extra interests. Pre-withdrawal will attract penalties.

• RFC account- An NRI  also has the option to convert the existing NRE account to a Resident Foreign Currency (RFC) Account. In this account, you can maintain funds in foreign currency with the funds being fully reportable. This account can be held in the form of savings, current or even in term deposits accounts. This account allows funds from abroad to be deposited in this account. The funds can include foreign currency from sale of assets outside India or income that is received outside India such as income from employment, assets, investments. You can also transfer the balance to the RFC account. You should be aware that no penalty is payable for premature withdrawal of FCNR/NRE accounts in such cases. Funds in this RFC account can be freely remitted abroad or credited to fresh FCNR/NRE account if you regain non-resident status.

• Form for re-designation of account- A declaration for re-designation of NRO or NRE account to Resident or the RFC account will be required to be filled up by the returning NRI. You would be required to provide details such as account number, joint holder details (if any), and customer identity proof which need to be filled up and signed by all account holders. This form must also be submitted at the local branch of the bank. The Process involves re-designation to Resident Rupee Savings account or to Resident Foreign Currency account once the bank receives the declaration. Once the given NRE account is converted to Resident Savings account, interest earned thereon becomes taxable.

One is advised to consult a tax advisor before making any decisions regarding such matters. These are the things one can do for managing their bank accounts when they return to India.

Must know rules for NRI’s investing in Home Loans

More and more NRIs want to buy property in this country as RBI has simplified the rules relating to their purchase. The Foreign Exchange Management Act (FEMA) defines an NRI as someone who stays outside India for ‘employment, carrying on business or vocation in circumstances as would indicate an intention to stay outside India for an indefinite period’. Real estate transactions and, by extension, NRI home loans are governed by the rules under FEMA. India’s economy has strengthened over the last decade or so and this has provided a favourable environment for NRIs to invest in real estate here. But there are certain rules and regulations that govern the entire process of NRIs buying property with home loans in India.

The rules for NRIs investing in home loans are:

• An NRI cannot purchase more than two residential properties in India. This is irrespective of the fact whether he or she has a property in the country of his or her residence. Most importantly, NRIs are not allowed to buy agricultural properties in this country. There are no such restrictions on commercial property though. NRI home loans can also be availed to purchase, renovate or construct a new or existing house.

• How much home loan you an NRI get from a bank depends on his income an educational qualification. Banks generally expect the borrower to have a graduate degree.

• Various documents like passport, visa, work permits, salary proof and statement of non-resident external (NRE) or non-resident ordinary (NRO) accounts are required.  You can even submit these documents online instead of coming all the way back to India.

• Different banks provide different amounts of loan. However, the tenor for NRI home loans is generally lesser when compared to normal home loans. This is because repayment capacity of NRIs is considered to be better than resident Indians.

• NRIs have the option of paying back the home loans through EMIs. However the repayment can be done only through NRE and NRO accounts with remittance from abroad. The down payment should be done though normal banking channels or NRE or NRO account in India.

Other rules include that if an NRI is buying an under-construction property, he or she has to give the power of attorney to your builder or trusted associate. The guidelines issued by RBI indicate that nri home loans shall be given based on the same criteria as those applicable in case of residential Indians. NRI home loans are secured by equitable mortgage of the property that the NRI wishes to purchase. It is, however, to be kept in mind that there are no limits or restrictions on the number of properties an NRI can purchase or retain in India. But he is allowed to remit sale proceeds of only two properties out of India as per existing guidelines. The only portion of sales proceeds that which was paid using the foreign currency can only be repatriated.

Why the payment app is the need of the hour today?

The government of India introduced demonetization in November 2016. This move put 80 percent of the usable currency in the country into disuse. The government has been encouraging the use of online interfaces to conduct our financial transactions ever since. Although new notes have come into circulation and have replaced the older ones, the importance of payment apps has grown considerably. You can add your debit or credit card into an app and pay for goods or services as easily as you use your physical card. Payment through mobile refers to the payment services that take place under financial regulation and are performed from or via a mobile app.

The benefits of using mobile payment apps are as follows:

• Your information is secure – Do not worry about your personal information getting leaked or your bank account getting compromised as these apps have built-in security features. Your real card number is never stored in your phone or with the retailer. When you make a purchase, the system hides your number by assigning a random number or token for each purchase.

• It is convenient – Would it not be nice if you could just leave your wallet at home? Payment apps enable you to do just that. You do not have to cash when you go out for shopping. It would suffice to just carry your phone. These apps also provide an easier way to use your debit or credit cards.

• Good for small businesses – Small businesses previously did not accept payment through credit cards for want of infrastructure and as they were cash-only facilities. Now these mobile apps have made it possible for these businesses to accept payments from people who are short of cash. This has increased their business volume and also contributed to an enhanced customer base. The digitization of transactions also helps small businesses to understand the customers’ preferences.

• Cost and engagement – A mobile card reader or a barcode scanner is less expensive than a credit card terminal and therefore can be employed easily. The time required to complete a transaction is also reduced if shops use mobile payment apps. This allows a retailer or a shopkeeper to service more customers than he could have within a stipulated amount of time.

• Paying through these mobile apps would also cost you less as they charge you less than most credit card companies.

Thus, payment apps are the way forward now. In this era of globalization and digitization, it is surely beneficial to adopt new technologies and techniques that will make our lives easier. From paying taxi fare to shopping for groceries to paying the bill at a nightclub, everything has become much easier if someone uses these apps. No need to argue for the change that the auto-rickshaw driver owes you. Simply use the mobile app to pay the exact amount.

How to use your credit card offers smartly?

A credit card is a card that is issued by a financial company and which gives the holder the option to borrow funds, primarily at the point of purchase. They are usually used for short-term financing, and institutions which provide credit cards generally charge interest. A credit card can be used to make purchases, reduce the cost of expensive debts or to earn cash back and rewards. It is a type of loan that you avail from a bank or any other financial institution. Interest is added to the amount a person spends if he or she does not clear the balance at the end of the month. Furthermore, banks provide awesome credit card offers that more often than not lure users into spending more with their cards. This result in a person actually spending more than what they are actually capable of. A person should be careful enough not to fall into such a trap if he or she uses a credit card.

Some of the benefits of using credit cards are:

• Cash back: Banks provide credit card offers if you use your card to pay your bills or even if you make purchases of a certain amount of money. The most common of such offers is the cash back facility. You get a certain percentage of your spending debited to your online account which you can use later to buy something or avail any other service.

• Reward points: Banks also provide reward points for every purchase that you do with your credit card. The card company earns a fee from the merchant outlet every time you use your credit card. They share a part of these earnings with you in the form of reward points to encourage you to use the card more frequently. You can redeem these reward points at any partner merchant outlet or website. Generally, people use the reward points to buy air tickets or convert them into air miles.

• A credit card enables you to avail the EMI option when you are making any big ticket purchase like television, laptop or a car. It allows you to make the purchase even if you do not have the entire amount required to buy the thing at that time.

• Grace period – One of the primary advantages of using a credit card  is that banks offer a grace period of about 50-60 days before you need to start paying back. This helps you to plan your expenses accordingly.

• Credit cards are safer than debit cards.

There are credit card offers to meet the needs of everybody. From flier miles to discounts on purchase of automobiles to various perks when you shop, credit card companies are putting in all the efforts to keep their customers happy. The credit card offers often come with an expiry date. The most convenient way to redeem these offers is by making some purchase online as you do not have to contact the bank to help you out with this.

Best car loan: How to get the best loan rates

Car loan or auto loan is one of the easiest and best ways of owning a car. In India, car loan industry is on constant rise for the last decade or so and is expected to rise furthermore in the near future. It is also one of the most sought after loans in India. Due to extremely large number of borrowers in India and an equally large number of lenders, the car loan industry is nothing short of a fish market. In this cut throat competitive market you must be street smart before opting for a car loan so that you get yourself the best car loan.

The loan amount and the interest rate on auto loans depend on your monthly income, credit score, type of car and the down payment, which may vary from 9% to 13%. The tenure for car loans in India may vary from 2 to 10 years. So if you are thinking of buying a car in the near future, here are some of the points you should consider in order to get yourself the best car loan:

• Don’t go for any pre-approved loan offered by car dealers. You should shop for loans in different financial institutions to give yourself the best possible option.

• You should limit your loan shopping for a period of two weeks. Applying to loan brings down your credit score.  One of the rarest known fact but the loan enquiry made over a period of two weeks is considered as one. So your credit score is affected only once if you stick to this.

• You should also time your car loan to perfection. Try to visit banks at the start and closing of the month, as banks have monthly targets there is a high chance of you getting a better deal at the end of the month.

• Always consider a high down payment as it not only brings down the loan amount but also the interest rate and the total interest to be paid during the loan tenure.

• Choosing a car model can also affect your interest rate and the loan amount. The interest rate for less popular and outdated car model is higher as compared to those in the popular or premium category.

• You should know your credit score before applying for any loan as it not only makes you realize your financial status but also makes you aware of the interest rate that you are eligible for according to your credit score.

Shopping for loan and car separately is always an added advantage. All of this combined with a little hard work and a bit of patience is definitely going to help you in getting the best car loan.

How to make car buying easier with auto loans

The young working class of India rides on their own set of wheels as soon as they land up with a good job. Due to this reason, the auto loan India industry has grown by leaps and bound in the last decade and is still growing at a rapid rate. If you are thinking of buying a car, you need to be able to finance it in order to enjoy its comforts and at the same time relive yourself from the pressure of spending a large amount of money at one go. An auto loan is one of the most sought-after loans in India and hence it is also easily available.

Auto loans are loans given to individuals for purchasing automobiles against their monthly income. Auto loan India is a very huge market with lots of direct (banks) and indirect (auto loan financer) financial institutions ready to help you buy your first car. The interest rate varies from 10% to 13% depending on the person’s income, the choice of car and his/her credit score. Auto loans in India generally cover up to 85% of the total cost of buying a car.

Auto loans are definitely a savior when it comes to buying a car. Mentioned below are some of the reasons on how auto loans make it easier for you to buy a car:

• The first and the foremost reason is that you don’t have to pay a large amount of money in order to own a car. The auto loan can finance up to 85% of the total cost of the car.

• The tenure for loan amount generally varies from 2 to 10 years which makes it easier for you to pay the loan back in easy monthly installments over that period. The ideal EMI for a loan applicant is around 20% of their net salary.

• As compared to other loans, the interest rate of auto loans is quite low as it is secured against the car itself. So you don’t have to pay a large amount money on interest and can buy the car at the lowest price possible.

• If you are buying a car from a company which is also financing it, you can avail extra benefits such as free road tax for six months, free services etc.

• The entire procedure is a hassle free process as everything is done at one place, saving you the time and energy required for multiple visits.

All these points combined with the fact that coming up with a large amount of money to purchase a car at one go is not possible for everyone. This is where opting for an auto loan is a good idea. But it is also equally important to consider all the possibilities before opting for an auto loan.

Protecting your ATM card: All you need to know about bank card skimming

Bankcard skimming is the latest crime of the 21st century where you don’t have a clue that you are being robbed. It is called skimming because your debit card or credit card gets skimmed using a device similar to a card reader by attaching it to the ATM machines. This method is widely being used by fraudsters all over the country to steal money from your bank accounts.

The device generally consists of two important hardware; a camera to see your ATM pin and a magnetic card reading device to capture your details and clone your card. However, there is always a new method being developed to carry out skimming such as the use of any piece of material to jam the enter button of the ATM. So once you are done with making the transaction, it will not process as the enter button is jammed. Once you leave the ATM thinking it to be not working, the skimmer would remove that material and hit enter to process your transaction.

It is almost impossible to notice such minor tricks in your daily busy life. However you can always take precautions in order to avoid such incident. Here are some of the easiest ways to protect you from such crimes:

• Always check the card reader before inserting your ATM card. If it moves then something is not right as ATM machines have card reader attached to it which is fixed and doesn’t move.

• You always check the ATM machine before using it. If you find anything out of place or any additional piece of equipment then it’s a no go.

• Always protect your ATM pin by placing a hand over it while entering your ATM card password. This will block it from the view of the camera if it’s placed inside.

• Never lose the debit card out of your sight if you are using it at a restaurant or retail stores for making payments. It can easily be copied or used to make extra payment.

• You should always take a good look inside the ATM especially at the machine to check for any cameras or if you notice anything unusual such as the keypad, lower bottom of your screen.

• You should also take a good notice if a person inside the ATM is just standing idle and pretending to do a transaction.

• Last but not the least is that you should always monitor your bank account. Keeping a regular check on the transactions is always a smart thing to do