Why opening a savings account for your child is crucial now

Banks in India now allow savings accounts for kids who are ten years or older. Kids can operate these accounts, even though parents need to be partially involved in it as well. While most banks now offer various types of savings account curtailed to children, very few people in India take advantage of this feature. There are several important aspects that a child learns when he/she operates their own bank account from a young age. Here are some of the reasons why your kids should have their own savings accounts.

Understand the value of money

Most children are now aware of the importance and the value of money, since they are provided for by their parents. This is why many of them take money for granted from a young age. With their own savings account however, children start to realize the importance and value of saving money. They start to understand that money can be an asset when saved in a proper manner.

Avoiding unnecessary expenses

Kids will be more prone to spend all of their savings on useless items such as chocolates and similar products at first. However, you can encourage your children to save their money so that they can afford to buy something useful. For instance, your child may really want a bicycle. As a parent, you should advise your kid to save his funds so that he can afford the bicycle. This will teach them that savings can be useful in getting the things that they really want.

Basic idea of banking

Each and every person needs to be aware of the ways in which the modern day banking system works. With your child’s savings account, you are giving him/her a practical lesson on the same. They may not learn the intricacies of finance, but they will be able to comprehend how the bank computes interest on the savings that they have inside the account. This will further increase your kid’s desire to save money in order to earn greater interests.

Furthermore, calculation skills are also improved when the child manages such an account. They will comprehend just how much savings they have and how much more they need to save in order to reach their financial goals.

These are some of the reasons why opening such an account for a kid has become crucial. However, parents must be involved in this process as well so that they can guide the child to become mature in terms of money and finance. They must also select the type of savings account best suited for their child.

How mobile payment apps are now making it easy to handle finance

With the advancement of technology, banking and finance are also evolving continuously. With the advent of smartphones and tablets, a new form of payment also came to the forefront, namely mobile payment. Several apps have been developed, which allow customers to carry out a transaction through their mobiles itself. These apps not only make it easier for the customer to purchase an item without cash, but it also proves to be quite beneficial for the vendor.

What are the advantages of mobile payment apps for the consumer?

The consumers can use these apps to make payments in an easy manner. For instance, in case of a cash payment, you would need to carry the cash amount with you prior to the purchase. In case of payment through credit or debit cards, you would need to swipe the card and then sign on the memo. However, in case of mobile payment apps, you only need to transfer the funds digitally to the vendor and you are done.

Mobile payment apps also provide a secure way to make payments. With the use of such apps, you no longer need to worry about carrying cash in your wallet or the cash getting stolen from you. The credit or debit card information associated with such apps are not stored locally in smartphones. Instead, the details are stored in cloud-based systems making it impossible to be stolen, even if the smartphone is nicked.

However, aside from the benefits received by the customers, the vendors also profit from such a transaction. This is why, most vendors now support such payment methods.

Advantages of mobile payment apps for the vendors
Vendors are liable to pay less for using a barcode scanner or other forms of mobile payments to complete a transaction when compared to the cost of a credit card transfer. The vendors are charged monthly fees for such transactions and are also charged for each instance of payment through credit cards.

A shop or service that offers mobile payment as a valid option for transaction may earn the goodwill of customers as well. People are looking for convenient means of payment whenever they go out. Shops, which provide such facilities are likely to have increased business and returning customers.

Mobile payment apps are becoming so popular that cash transactions are dwindling with each passing day. More and more people are finding this mode of payment easy and convenient. There may come a time when the entire economy of India will become digitized and cash will become a thing of the past.

Linking your bank account with your Aadhaar Card

Aadhaar cards have become the most important personal identification document in India in just a few years. Most people have already been assigned an Aadhaar card along with their own personal 12-digit Aadhaar number. Most government services and telecom companies have made Aadhaar linking mandatory. In 2017, the Indian government also decided that Aadhaar linking would be made compulsory for bank accounts.

What does Aadhaar linking mean?

Prior to the advent of the Aadhaar card, people had to rely on either the PAN card or the Voter ID in order to open a bank account. However, since the Aadhaar came into existence, most banks now ask for the same in order to register new accounts. The Aadhaar provides better security verification due to the biometrics embedded in it. So, the Government of India decided to bring the entire banking system under a uniform identification process. This is why people who did not open their accounts with the Aadhaar will now have to link the same with their banks.

Why is Aadhaar linking important?

Aadhaar linking comes with its own set of benefits. For instance, the government subsidies, such as LPG and others for retired persons will be transferred directly into your account after the linking is done.
Aadhaar linking is also likely to reduce tax fraud and prevent other money laundering schemes. Just as linking Aadhaar to PAN has allowed the Income Tax department to weed out duplicate PANs, the bank account linking is also expected to prove beneficial to the country’s economy.

Aadhaar linking will also enable a new mode of accessing the account from anywhere. This method is known as Aadhaar-Enabled Payment System or AEPS. Through this feature, users will need their 12-digit Aadhaar number along with their fingerprint verification to access their bank accounts. After online bank account opening, money withdrawal may also take place online.

How can the Aadhaar linking be done?

Some banks offer the option of linking Aadhaar to the account through that bank’s ATMs. People will need to swipe their ATM cards and follow the instructions for Aadhaar linking from there. However, the best way to link the Aadhaar number to the bank account is to visit the nearest branch of your bank and ask for assistance there.

Many citizens have already linked their bank accounts with their Adhaar card. Other Indian citizens with access to such accounts in banks will have to link their Aadhaar number with those accounts within March 31, 2018. The previous deadline was deemed to be December 31, 2017, but this has since been revised.

Here is how you can get the best deal on your car loan application

Car is no more a luxury but a necessity these days if one is living in a metropolitan city in India. With travel distance and increased complexities in terms of availability of public transport, cars have become an important asset one should own if they desire to save intra-city travel time. Getting a car has nowadays become super easy with car finance options being offered by almost every bank known.

The approval of a car loan to a great extent depends on the manner of its application. If one is thinking of opting for a car loan to purchase a car there are certain things he may keep in mind to get an attractive deal on the car loan application. This is how one can look for the best deals-

• Conduct a detailed research on the car price- It is often seen that different dealers quote different prices for the very same model. One can choose and zero down on the best offer made. By choosing the dealer who quotes the best price one indirectly also reduces the principal amount for the car loan.

• Check various options available in car loans- Car finance is a dynamic sector as far as loans are concerned. Different banks offer different rates depending on criteria such as the loan amount, duration, credit history of the customer and so on. Often the bank with whom the dealer has tied-up with does not provide the best offers. So, before buying the car the customer must check the various loan options given by different banks to assure that het gets the best loan deal.

• Credit profile of the person who is opting for the loan- The interest rate and monthly EMI of a car loan to a certain extent depends on the credit profile of the person who opts for it. If one has certain credit discrepancies such as pending EMIs of other loans and unpaid debts, the bank is more likely to charge relatively higher interest rates for the car loan.

• Opt for an optimum duration for the car loan- When a buyer is thinking of purchasing a new car by taking a loan he must choose the shortest possible duration. This ensures that the loan is productive. Higher the loan tenure, a borrower will have to pay more interest on the loan. The ideal duration for a car loan is 2.5 to 5 years.

Lastly, before finally signing the papers one must read the fine print to assure that all terms and conditions are known and agreed upon.

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.