Are you aware of the UPI payment process?

Prior to the demonetization last year, most of the major banks in India underwent a crucial change. They introduced a new and convenient form of payment known as the UPI or the Unified Payments Interface. As with any new scheme or policy, most people in India are still unaware of what the UPI does.

So, here is a look at some of the things one should to know regarding UPI and how you can take advantage of the process-

What is UPI?

UPI is essentially an easier mode of transaction between two individuals or account holders. Through it, people no longer need to remember bank details of the person they want to transfer money to. Instead, the payment is made through a mobile application. Most banks in India have developed such an app and made it available through the Google Play Store and App Store.

You can download the UPI app of your bank and register yourself in it. After the registration is complete, you need to only enter the UPI username of the individual you want to transfer money to along with the bank that he/she is affiliated with. The fund transfer process is now that simple thanks to this procedure.

How to get started?

The first step to using UPI is to download the UPI app for the bank in which you have an account. These apps are available for free in the Google Play and App Stores. Next, sign up for the UPI process. To do this, you will need to create a UPI username, which will be known to others and used to make payments to you.

You will also have to enter a 6-digit

https://www.hdfcbank.com/personal/making-payments/fund-transfer/upi

pin. This pin will be used to authenticate any transaction that you initiate through your mobile. After you select the pin and the username, the app will send an OTP to your phone number, the same number which is linked to your bank account. You need to re-enter the OTP on your phone to complete the registration process.
Once all of these steps are complete, you can begin transaction freely. This method of payment is completely secure and safe. So, you need not worry about getting scammed out of your savings. However, remember to keep the UPI pin secret, so that no one else apart from you can execute a UPI payment.

With UPI payments, banks will once again be able to establish their footing in the market which they had lost since the arrival of various mobile wallet applications. UPI essentially allows one to do the same transfers that PayTM or MobiKwik does, making those apps redundant over time.

What are the factors you need to consider when investing in mutual funds?

Investments are a great way of making money from savings. Most people invest in mutual funds. Mutual funds are nothing but a group of investments made by different people. The mutual fund invests this money on behalf of the investors. The mutual fund charges a small fee for investing this money.

However, as is the case with all investments, “mutual fund investments are subject to market risks”. So, to avoid incurring a loss, you must remember these factors prior to investing money on the same-

What is the objective of the investment?

Every mutual fund follows a certain objective or goal. Determine what the goal is for a certain mutual fund. If this goal matches up to the one that you have in mind, then the investment will prove fruitful to both the parties involved. The style of the investment is also important. You can select between small cap, large cap, mid cap and micro cap funds. Other options include multi-cap and flexi-cap funds.

Check the performance of the mutual funds

Before investing in a mutual fund, ensure that you check how well the fund performs in the market. In fact, it is advisable to study the profitability and stability of the mutual fund for a long period of time prior to the investment. This will let you know the risks that you may face with your own investment.

Experience of the fund handler

The mutual funds manager or handler is responsible for investing the money in such a way that it garners substantial returns. The manager needs to be experienced and an expert in the investment market. This will ensure that the fund does not incur unnecessary losses. So, it is essential to have a dependable manager at the helm of the mutual fund.

Mutual fund expenses

The firm managing mutual fund investments charges certain fees in exchange for the investment. As an investor, you need to check whether the expenses that you incur are higher than you can handle. Some mutual funds who charge more as a fee also offer greater returns to investors. So, you should check these aspects out carefully before investing.

Check the exit load

An exit load is the added charge that an investor has to pay if he/she decides to sell their units before the tenure runs out. The higher the exit load, the greater the penalty fee you will have to pay. However, it is advisable that you do not sell off your investment, as long-term mutual fund investment increases the chances of return.

Consider all of the above factors in order to make an informed decision regarding mutual funds.

How to open a demat and online trading account?

Over the years the stock exchange market has become electronic. Adopting the electronic system, the purchase and sale of shares today can be done via the computer and even through smart phones. In order to actively deal in the stock market, one requires to maintain a trading account as well as a demat account.

While a trading account helps in the purchase and sale of stocks in the market, a demat account is where one deposits the shares. When it comes to online trading account and demat account opening they go hand in hand. One generally opens both the accounts at the same time.

Here are the steps when it comes to online trading account and demat account opening-

• One has to first approach a depository participant (DP), generally a broker or even a bank. A DP functions as an agent who helps in the purchase and sale of shares.

• This is followed by acquiring and carefully filling-up forms in order to open the accounts. Submit the form along with relevant identity proof documents. Pan card, proof of identity such as a license or passport, proof of residence such as a ration card and a photograph that is self-attested are documents which are required.

• An agreement is then formulated between the investor and DP. This set of rules and regulations will be signed by you after which you will receive a copy of the same.

• After the agreement papers are signed and the submitted documentation is crosschecked and verified, one will receive their online demat account details, including the number. This number is called the BO ID (Beneficiary owner’s identification number). This ID will come in use in each and every future transactions.

• Once you get the online trading and demat account details, you can start buying and selling mutual funds, shares as well as debentures through the accounts. Bear in mind that unlike other accounts, no minimum securities need to be maintained in a demat account.

Legally, one can have multiple online trading accounts and demat accounts under one PAN card. They may hold multiple accounts with the same broker or even other brokers as well. In case of multiple accounts, annual fees for maintenance need to be cleared for each and every online trading account and demat account that one has. Apart from the annual account fees, one also needs to pay for the transactions fees as well as custodian fees. In case of one single account none of these charges apply, except the fees one covers at the time the account is opened.

IMPS: All you need to know about the advantages and limits

Banking is continuously evolving with the advancement of electronic media. With the emergence of smartphones and tablets, the banking process has also become simpler. Mobile banking and internet banking have become popular as well. A new mode of money transfer known as Immediate Payment Service or IMPS was also introduced. However, many people in India are still not aware of IMPS and what it stands for.

What is Immediate Payment Service and what are its advantages?

It is a form of digitized banking, which is available 24x7. Funds can be transferred even after the banks close for the day and even on bank holidays. It involves mobile banking. This means that the funds can be transferred securely from your mobile to the other person’s mobile. From the phone, the money is then deposited into the receiver’s account.

IMPS was accepted by the National Payments Corporation of India or NPCI in 2010. There is essentially no minimum limit of funds one can transfer using IMPS. However, to facilitate the transfer, you will need three important information about the receiver. Firstly, you will need to know the full name of the beneficiary. Next, you will need the account number of the receiver. Finally, you will also need to know the IFS code of the beneficiary.

Two other things are required to complete IMPS transaction. Upon registration to IMPS, the bank will generate a 7-digit MMID number. The MMID number of the beneficiary is required to complete the transaction. Lastly, the ten-digit mobile number of the receiver is also needed to complete the same.
This form of payment ensures instant money transfer in a safe and secure manner. Unlike National Electronic Fund Transfer and Real Time Gross Settlement, IMPS can be facilitated even when the banks are closed.

Disadvantages of IMPS

Even though IMPS has made life easy for everyone, there are still some limits to this mode of transaction. Firstly, the banks apply certain IMPS charges on every transaction. This charge varies from bank to bank and is also dependant on the amount being transferred. Higher the transfer amount, greater is the IMPS charge levied on the same.

Secondly, there is a limit to how much one can transfer through a single IMPS transaction. This upper limit varies from bank to bank. However, if you are looking to transfer a substantial amount of money using this method, it may not be a viable option.

What are the different types of banking cards available in India?

Indian banks offer a variety of options to individuals for conducting financial transactions. People can pay for items and services that they purchase through banking cards. There are primarily three types of cards in India – credit cards, debit cards and prepaid cards. Here is a detailed look at the features of these cards.

Debit cards

These are the basic banking cards, which are assigned to an individual when they open an account in a bank. Through the use of debit cards, people can pay for items and services without cash. However, to ensure that the payment goes through, the bank account must have the required funds in it. For instance, if you pay Rs.3,000 through your debit card, the bank account associated with the card must at least have the same amount in it.

Debit cards are the most common form of banking cards in India. This is because no addition eligibility criteria need to be met in order to qualify for a debit card. Aside from this, using a debit card is much safer since it does not require a repayment to the bank at a later date. You are essentially spending your own money and not lending out a sum from the bank.

Credit cards

Credit cards are the second most common type of cards. Credit cards are issued by banks and through these an individual can purchase items and services on credit. This means that you may pay a certain amount of money, which you may not have in your own bank account. The bank essentially lends out this money. However, the card holder will have to repay the entire amount to the bank along with interest on a later date.

Credit cards are not issued to every person in the country. Each bank has a list of eligibility criteria, which must be met before one can apply for a credit card. Since credit cards are a form of short-term loan, the banks check the income of the individual along with the bank statements prior to the application for the card.

Prepaid cards

Prepaid cards or prepaid credit cards are form of banking cards, which bear resemblance to both standard debit and credit cards. With such a card, you are responsible for depositing a sum of money into the account prior to making any purchases. This money can then be spent on the items and services that you wish to buy.

In case of such cards, you are the one setting the credit limit and at the same time, you are not borrowing money from the bank.

How to get the assurance of approval on your bank loan application

The reasons for taking a bank loan can greatly vary from person to person. While some take it to buy a car, others may apply for a loan to build a dream home or even renovate an existing one. Whatever the reason may be, applying for a loan is a tedious process as banks maintain very strict application standards. The high standards that banks set for borrowers can often make those who apply wonder whether their loan will be approved or not.

However, individuals can ensure their loan gets the assurance of approval. Here’s how-

1. Check your credit score

Whether you take an online loan or an offline one, the bank you apply to will check your credit score to determine whether your loan will be approved or not. The credit score is calculated on the basis of previous loan repayments (if any). Those who have a high credit score are generally given preference by banks than those with lower ones as it shows their ability to repay the loan in time. Hence, you should try to increase your credit score to ensure that your loan is approved.

2. Reduce your debt

If you want to improve the chances of your bank loan getting approved, it will be a wise idea to reduce existing debt. Large amounts of existing debt hold the potential to hurt your chances of qualifying for as well as getting an approval on your loan as it’s taken into account when analyzing your debt-to-income ratio. Hence, if you cannot clear out any existing loan entirely, consider reducing it to be on the safe side.

3. Apply for an amount you can manage

One common thing most people overlook, or rather overestimate when applying for an online loan is the amount. For example, if you require 10 lakhs to renovate your home but ask for a loan of 20 lakhs, the bank will question you about your intentions for the rest of the loan amount. In such a case, the bank may decide to reject your application, deeming it to be a risk in comparison to those who apply for an amount that is not above what they need. Hence, before applying for a loan, fix the right amount.

4. Get all the documents ready

Gathering as well as furnishing all the right documents as and when the bank asks can go a long way in getting your loan approved. Key documents that can help in getting your loan approved include tax returns, pay slips, bank account statements, KYC documents and whatever else your bank requires.
In the end, as long as one prepares well, their loan will get the stamp of approval without much problem. In case of any questions, be sure to consult an expert.

Getting an online personal loan is now made easy

A personal loan is the best way for one to purchase an expensive item that one always wanted but couldn’t afford to, such as a bike, an expensive gadget or even a piece of jewelry. Earlier on, getting a personal loan used to be quite a hassle as one had to make several visits to the bank. On top of that, the filling of several complex forms was a mandate and then there was the waiting time for approval.

However, now getting a personal loan is very easy as one can just apply online and get instant approval. Here’s how-

1. Check your eligibility criteria

The eligibility criteria for an online personal loan is fairly simple. Qualified individuals include salaried professionals such as CAs, salaried doctors, engineers, any employee of a private limited company or a public sector employee. Applicants should also be aged between 21 and 60 years and should have had a job for at least last 2 years with a minimum of the last 1 year with the current organization. A minimum net income of Rs 15, 000 per month is generally considered acceptable.

2. Register yourself

The first thing you have to do is get on the website of the bank you wish to take a loan from. In the menu section of the website, you’ll see an option for personal loan. Click on the apply button (or whatever the option is on the website). You will be taken to an online form which you will have to fill in correctly.
Details you may be asked to furnish include your basic KYC (know your customer) information such as your name, address, date of birth etc. along with your annual/monthly income.

3. Get your documentation in order

Fortunately, to get an online personal loan, you do not have to furnish a long list of documents. Simply uploading the scanned copies of basic documents is enough. That said, the documents you have to furnish include
• ID proof, which could be a copy of either your Aadhaar, passport, voter ID card or driving license
• Your address proof, which can be a copy of any one of your ID proofs
• Your bank statement of the last 3 months
• And your latest salary slip or salary certificate

4. Choose your offer and apply

Banks may offer several personal loan schemes with varying rates of interest. Generally, the details of these schemes will be available on the website and you must go through them before making your choice. Also, search the website for the details of the fees of the loan. Once you’re done making your choice, and have already carried out the above steps, apply for your loan.

Most banks process the loan instantly or in 4 to 5 hours. That’s how easy it is to get an online personal loan.