The ideal guide to choosing the best insurance policy

A person always needs a back-up plan to deal with any contingencies in his/her life. There may be a sudden death in the family or there might also be some medical emergency. A death of a working member of a family may result in the family being plunged into a world of plight. This is where a life insurance policy can prove to be extremely beneficial. Such a policy entails that that an insurance company will provide death benefits to the beneficiary of a policy in exchange for some payments that are to be made on a regular basis.

There are a number of life insurance policy plans that a person can choose from in accordance with his/her needs.

There are a number of factors that a person should consider before deciding which plan should work best for him/her.

• A person who does not want a complicated plan can opt for a simple plan. Such a plan normally comes with single premium options and guarantees a beneficiary that is assured a lump sum after the death of the policy holder. The assured sum is normally 15-20 times the present annual income of the policy holder.

• A person should insure himself/herself or any other member of his/her family who is suffering from any critical illness. Health insurance may not suffice in such cases as such a policy only pays for the hospitalization costs. However, a person suffering from a critical illness will generally require a lot of other funds as well. Thus, it is of vital importance for such a person to get a financial shield in the form of critical illness clause when he/she is applying for an insurance policy.

• A person can also avail accident cover with his/her life insurance policy. This will be hugely beneficial for a person as it can provide security in a number of uncertain situations like road accidents. This cover only costs a little extra and offers extra benefits to the family of the deceased in addition to the one-time payment.

• A life insurance will also enable your family to earn a monthly income even after your death.

• Different insurers even allow a person to choose how that person wants to receive the pay-out.
He/she can choose from multiple pay-out options to suit his/her different financial requirements.

• Do not always opt for the life insurance policy plan that requires the payment of the lowest premium. This may result in the loss of various benefits and also cause you to adopt a policy that does not meet your requirements.

• Choosing a proper insurance provider is also a key facet.

A life insurance policy lets a person provide financial security to his/her family and also enables the person to live a peaceful life.

How to qualify for the best business loan?

Business loans are extremely useful when one is investing in a new business. These loans may help set up the business, so that one can easily repay the debt as the business starts generating profits. However, as with any kind of loans, not everyone is qualified to receive a business loan. Most lenders have a list of stringent eligibility criteria that the borrower needs to fulfill in order to get a loan sanctioned. Here are some steps through which one can easily qualify for the best bank loan for business.

High credit scores
Credit scores are a form of measurement, which assesses how good you are at repaying loans. There are two kinds of credit score that the bank may check, prior to sanctioning a business loan. The personal credit score keeps track of the past loan repayments of the loan applicant. For instance, if you pay your credit card bills and other loan EMIs on time, your personal credit score will be higher.

The bank may also checks the business credit score. This is the credit score of an established business and includes the past repayment of business loans for such an organization. However, in case you are applying for the loan for a new business, the banks will not check the business credit score.

Meeting the eligibility criteria of the lender
Each lender will have their own requirements and minimum qualification criteria for a business loan. Ensure that you are aware of these criteria and also fulfill each of them. This will allow you to get your loan sanctioned easily and without any added hassle. In some cases, the lender may be flexible if you have high performance in certain sections and are under the eligibility limit in another.

Financial and legal documents
Before applying for the business loan, ensure that you have all of the financial and legal documents ready with you. Some of the paperwork which might be needed include personal income tax returns as well as business income tax returns, balance sheet along with income statement and personal/business bank statement, photocopies of personal identification, financial projections for your business and other documents. Check with your bank or lender prior to application regarding the documents that need to be provided.

Collateral
Most banks will demand a collateral in case of bank loans for business. Collaterals are financial assets that you possess. For instance, you may put up your house as a collateral for the business loan that you are applying for. The bank may then take possession of this house in case you are unable to repay the business loan.

The above factors should be kept in mind in order to qualify and easily get a business loan.

RTGS vs NEFT: All you need to know about the difference

Interbank transfers are form of money transfers that occur between two banks. One may want to transfer a certain amount of money from an account in one bank to another account in a different bank. This will count as an interbank exchange. There are two main modes of interbank transfers in India, namely National Electronic Fund Transfer or NEFT and Real Time Gross Settlement or RTGS.

However, one must understand the essential differences between these two modes of money transfer to take advantage of them. Both are useful in their own ways and are used in case of retail banking as well as corporate banking. Listed below are some of the main differences between the two.

Minimum transfer limit
For NEFT transfers there are no minimum limits, as people can transfer very low amounts of money with the same as well. However, For RTGS, the transfer amount should be at least Rs. 2 Lacs. The RTGS limit ensures that smaller sums of money cannot be transferred using this procedure.

However, there is no upper limit for either NEFT or RTGS, which indicates that you can transfer as much money as you like using these methods.

Settlement
Since RTGS refers to real-time settlement, the fund transferred through this method is debited into the receiver’s account instantaneously. There is no waiting involved for the banks to clear the transaction. However, in case of NEFT, the funds are settled throughout the day in batches. This is why if a NEFT transfer is initiated toward the end of the day; there is a high possibility that the settlement will be completed the next day.

Timings
For NEFT, the timings are 8 am to 6.30 pm Monday to Friday, while on Saturday, the timing ranges from 8 am to 12.30 pm. On the other hand, for RTGS the timings are 9 am to 4.30 pm between Monday and Friday. On Saturday, the RTGS transfers can be initiated between 9 am and 1.30 pm.

Suitability
NEFT has no minimum limit and is thus more suitable for transfer of small amounts of money. The RTGS limit signifies that this kind of interbank transfer is more suited for greater sums of money. Mostly corporate transfers are completed using RTGS. This may involve a large-scale business or a transaction between two banks. For such organizations, instant settlement of the funds is very vital, which is why RTGS offers real-time transfers.

In any case, both of these modes of interbank exchanges are useful, even though they cater to different clients.

What are the recent updates on GST?

The entire country has been figuring out how GST works since its implementation about 6 months back. The concept of GST, which stands for Good and Service Tax was first introduced by the government in the year 2000. This new idea on tax implementation finally came into function on the 1st of July 2017. Since then, GST has undergone several changes as the nation slowly accepts this new system of taxation.
  
The last council meeting with respect to GST was held on the 16th of December 2017, and a number of changes have been made regarding GST payment.

Some of the fresh updates include-

• The E-way bill with respect to GST online payment, will be introduced for trial on the 16th of January 2018. The rule of the bill will come into implementation from the 1st of February 2018, and the states of the country will have to start following this bill system before the 1st of June 2018.

• The council has brought down the list of goods and products in the 28% tax slab from 228 items to about 50 items only. Among the 50 items in the list most are luxury goods and products. Items which are used daily have been shifted to the 18% tax slab.

• The high GST rates on restaurants and hotels has been lowered. Now a GST of only 5% minus the input tax credit benefits will be charged. Although in case of starred hotels that have rooms costing more than Rs7, 500, the GST levied will be 18% along with input tax credit benefits.

• The GST rate on about 12 items has been brought down to 12% from its former 18%.

• The council after the meeting has even extended the due date for some related forms.

• The council has also reduced late fees in case there is a delay while filing NIL returns. The late fee has been brought down to Rs200/day to Rs20/day.

• Small and medium sized businesses that have a turnover of less than Rs1.5crore, can now file their taxes quarterly instead of monthly. Thus, they can now make their GST payment quarterly. This switchover will begin from October, the taxes for the months of July, August as well as September will have to be done on a monthly basis.

• Provisions for TDS/TCS have now been postponed till the 31st of March 2018.

GST payment is quite new, and the government is making a great effort in bringing about changes so as to make this new tax system business and consumer friendly. GST online payment is also a feature that has simplified the method of clearing taxes.

What are the best options to remit to India?

NRIs who stays and work abroad, are generally quite familiar with the term ‘remittance’. This refers to the transfer of money from an overseas account into an account located in India. This transfer of funds usually involves a certain amount of the money being deducted as processing fee for the transaction. However, one can remit to India through several valid methods such as Bank wire transfer, online money transfer and transfer of money through agencies. They have been further elaborated below-

Bank wire transfer

This is perhaps the most direct form of remittance. In this form of money transfer to India, you can directly transfer the funds from your foreign bank account into an Indian account. It usually involves the usage of SWIFT or Society for Worldwide Interbank Financial Telecommunication code. In such a form of remittance, processing fees may be levied on the transaction. A limit to the amount of fund transferred may also be present for bank wire transfers.

Online money transfer

With the evolution of the internet, several websites and portals have also come into existence, which offer the users a safe and reliable way of transferring funds from overseas. These online transactions can include the transfer of money directly from the account of a foreign bank into the account of Indian counterpart. Users can also transfer funds directly from their credit cards.

Money transfer through agencies

You can approach any remittance agency abroad to have your money transferred to India. An agent needs to be given the details of the transaction as well as the details of the receiver. After handing out the money to the agent, he/she will provide a special code to you. This code needs to be revealed to the receiver of the money.

A representative of the agency in India will hand over the funds to your contact, given that this contact is able to recall the code given out to the sender. This form of money transfer to India usually involves a small fee, which must be paid by the sender. This fee varies from one bank to the next.

These are some of the most common and most reliable ways through which an NRI can remit money to India while living overseas. However, one must be careful to check the processing fee that their bank deducts on each of these transactions. Try to save money and send greater sums at once. Some banks also offer free remittance in case of higher amounts of money. Furthermore, ensure that the method of transfer is secure, reliable and free of scam attempts.

Purchasing new versus old: Getting the ideal two wheeler loan

Two wheelers have now become a necessity for working individuals and students living in Indian cities and towns to make way and reach offices and colleges on time, when almost every day the major arteries of the cities remain blocked with traffic during peak hours. Two wheelers are one’s best friend when it comes to cutting through major traffic jams by opting for routes which involve passing smaller lanes and streets.

Two wheelers are used by individuals of a wide array of age groups. These vehicles range from the very basic scooty models to high-end fashionable bikes. Financial institutions do offer loans to those who wish to purchase two wheelers. A basic model costs around forty to forty five thousand rupees whereas a high end model can cost a few lakhs. Whatever your wish may be, banks do offer two wheeler loans if you wish to purchase a new two wheeler. Getting a loan application approved for a new vehicle is easier than a second hand vehicle loan approval. In India at present only selected banks offer a two wheeler loan in case of pre-owned vehicles.

While deciding upon a two wheeler loan the following points must be noted to assure that you choose a loan which is most suitable:

• Value of Margin: Any bank offering a loan to buy a two wheeler approves up to 90% of the value of the bike or scooty. The rest is the amount known as the margin- a value which must be paid by the buyer. The percentage to be kept as margin varies from bank to bank. So, this must be checked prior to finalising the loan.

• Two wheeler loan interest rate: while securing a loan the most important point to be noted is the interest rate charged by the bank. This varies from bank to bank. The two wheeler loan interest rate depends on the principal amount, duration of the loan, credit history of the loan applicant and type of loan being opted for. A major factor which determines how ideal a loan is, depends on the interest rate charged by the bank.

• Loan duration: the duration of a two wheeler loan varies from one to four years. As a buyer one should consider the EMI to be paid each month and accordingly determine the loan based on its duration. If EMIs are high the loan is repaid faster and there is an overall gain but if one cannot pay high EMIs every month, opting for a loan of three to four years is more sensible.

In most cases it is seen that banks which have a tie up with the dealers of two wheeler vehicles do not offer attractive loan options. So, buyers who wish to purchase a two wheeler by taking a loan must conduct their own research and procure information regarding loan offers provided by different banks before taking the final decision.

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.