What is the difference between private banking and wealth management?

Banking is tailored to specific demographics and not every method suits the general populace. For instance, there is a vast difference between private banking and wealth management systems. You may not be aware of the distinction between the two, but these differences are vital for you to choose the right form of banking.

Here is a look at some of the differences between private banking in India and the wealth management systems.

1. Service range
Private banking mainly deals with business asset management. However, the services that fall under it include banking, brokerage and overall asset management. It also offers simple tax consulting services.

Wealth management, however, deals with deeper concerns when it comes to business finance. The service deals with asset allocation, tax planning, family arbitrage, pensions, estate planning and even philanthropy.

2. Choosing services
Private banking offers select packages for people considered to have a high net worth or for people considered to be having ultra-net worth. These packages cannot be modified to suit the needs of a particular client.

In case of wealth management systems, however, the bank offers a consultant who deals with the needs of each client individually. For instance, one client may require philanthropy consultation while the other may be more concerned about estate planning.

3. Options offered
Private banking in India usually deals with limited services that the particular bank may be offering. This means that as a client you are bound to sign up to one of the services offered by the private bank you are affiliated to.

A wealth manager on the other hand is a person who does not work for any particular bank. So, he/she will consider the services offered by all banks and choose the one that is best suited for you and your needs. This is why people who sign up for a wealth management service may use several banks at once.

4. Focus on client’s needs
Since private banking offers just a few choice packages, there is very little need to understand the individual needs of the client and form a relationship with them. This means that there is very little interaction with clients and you, as a client, cannot seek special treatment from the bank.

However, a wealth manager begins his work by forming a deep relationship with the client. This gives them the opportunity to judge the financial situation and the needs of the client in question.

What are the available fund transfer options in this market?

With the advent of modern-day technology, numerous electronic modes of transferring funds have been made available to the general public. In addition to the familiar methods of money orders, cash and cheque payments and direct deposit drafts that can be reliably arranged by your bank, there also exist alternative options should you decide to cut costs, reduce complications and make fund transfer more efficient. Many of these forms not only allow daily transactions between domestic accounts but also international fund transfer between notable businesses and institutions.

In order to handle money transfers yourself, it can be useful to acquaint yourself with the spate of options available in this market. Below are some ideas on how you can most easily transfer funds over to your desired remittee.

Personal Bank Functions

Keeping yourself informed of the services offered by your bank is often the most effective way of being prepared to deal with fund transfers at any given time. It is quite likely that your bank representatives might be able to assist you with setting up net banking through which you will be able transfer money between accounts at little cost. Furthermore, your bank might be able to issue cheques to you that can enable you to transfer limited funds on a more physical level. They can also write money orders, fix up cash withdrawals and even coordinate with international financial institutions on how you can send your money to overseas accounts. If none of the above processes prove to be suitable for you, most reputed banks also offer a range of consultancy sessions that can provide solutions for your queries.

Online Transfer System

Should you choose not to wait in the long queues at the bank or pay additional bank charges, online payment systems like PayPal, Payoneer, Dwolla etc. may be the appropriate options for your transfers.  With just an email address and a valid bank account, you can become a member and thus be eligible to send money as well as make electronic purchases.
Not only  are these free services, the sites also provide coupons and promotions that can help you reduce shopping costs. The companies pride themselves on fraud-prevention and also resolve disputes between buyers and sellers, remitters and remittees through a specific resolution centre.

Money Wiring Companies

This financial service has laid out branches in key locations across the world and can offer to send your funds for you at a flat rate charged on the basis of speed of transfer, amount of funds and location of remittance. Though it charges a moderately high cable charge and also issues a disclaimer clearing the company of liability for failure to transfer funds, this form of fund transfer can be highly beneficent for emergency funds payment as it does not require identification or claiming.

What are the Different Factors That can Affect your Personal Loan Eligibility

Loans are very easy to get nowadays as banks offers a lot of incentives and low interest rates. However, the terms of a loan vary according to the type of loan taken by an individual. The most common types of loans available today are-

 Personal Loan
 Home Loan
 Car Loan
 Loans for business ventures and enterprises

Personal loans are basically unsecured loans that do not require any collateral. As the banks do not take any security or collateral for the loan, it becomes very high-risk. A personal loan is given at very high interest rates. Also, this loan can be used for any purpose ranging from travel, medical emergencies or any other personal use. Personal loans are taken by people requiring immediate cash. People opting for personal loans need to fulfill certain eligibility criteria to get the loan amount from the bank. These are:

• Age- A person’s age plays an important role when applying for a personal loan. For a salaried person, the age limit is between 21 to 60 years and for self-employed people, the age limit is between 25 to 65 years.

• Nationality- People applying for personal loans from Indian banks or banking institutions must be Indian citizens.

• Income- In a personal loan, the amount given by the bank will depend on your income.  The higher the income, the higher the loan amount that you will get. Also, having higher salary also helps in negotiating a lower interest rate.

• Employment Status- When applying for a personal loan, you need to be an employed individual. For salaried individuals, at least 2 years’ service with your current employer and for self-employed people, there has to be 5 years' annual earnings. However, it is completely the discretion of the bank whether to give you a particular loan amount or not.

• Housing- The eligibility of personal loans also depends on whether you stay in your own house or in a rented place.

• Credit Score- It is one of the most important factors for the bank. Two factors needed for calculating credit score are- 1. repayment of past or current loans and 2. repayment of credit card bills. Having a good credit score positively influences the tenure, loan amount and also interest rates.

• Employer- Having lower interest rates on your personal loan also depend on the organization you are working for. If you are working in a reputed organization, chances are you  will get favorable terms for your personal loans

• Maintaining a healthy relationship with the Bank- If you have been a loyal customer of the bank and have a good financial record, you will get a higher loan amount and lower interest rates.

These are some of the personal loan eligibility criteria that you should follow. So before applying for a personal loan, make sure you meet all the requirements.

Did You Know These Features of the Payment App Will Benefit you

India currently has around 85 million unique active mobile users and this number will keep swelling in the coming days. The statement speaks volumes about the current scenario in digital payments and mobile banking and also predicts the future when our country will become a truly cashless economy.

The measure of Demonetization has propelled many people and businesses to go cashless. A cashless economy is making way for digital payments and payment apps that are making life easier through cashless transactions. Some of the features of these payment apps include:

• UPI (Unified Payments Interface)- It is a payment platform introduced by NPCI (National Payments Corporation of India) which directly sends money from one bank account to another without the need to go to the bank and stand in ques. The interface is used by over 50 banks, taking care of all your banking needs.

• Comes in several languages- The good thing about these payment apps is that you can access it in your native language. There is no language problem, and people can easily understand the instructions and steps on how to make a transfer or payment.

• QR Code-You can also pay or transfer cash through QR Code if you don’t have the UPI interface installed in your phone.  Also, you can pay through IFSC (Indian Fiscal System Code). Payment Apps like BHIM and Google Tez use this technology.

• Cash Mode/Offline transactions- Many of the payment apps give the option of cash payments as monetary transactions are still very much in vogue. Apps like Google Tez use sound capture technology where you pair your smartphone with another Tez user to directly send money into their account without sharing your bank account details.

• Transactions- You can send up to Rs 10,000 per transactions and up to Rs 20,000 a day. For all transactions through the UPI interface, there is a limit of Rs 1,00,000 lakh per day  across 20 transfers a day.

• Payment Option- Other than money transfers from bank to bank, these apps also offer payment options to shoppers and consumers. You don’t need to carry around your cash or your credit or debit card anymore. You can make your grocery purchase or shop through the payment options.

• Easy to Use- These mobile payment apps have been designed in such a way that they are very user- friendly and streamlined. The apps are very easy to use and hassle-free.

Although digital payments and mobile banking are in their nascent stages in India, they have great potential to make everyone take notice and jump on the bandwagon of cashless payments.

These 5 mistakes you need to avoid with mutual fund investment

Investing in mutual funds is always a risky proposition. Sure, you can make a lot of money out of the investment, but you may also lose a considerable amount in the process. However, there are some mistakes that you, as an investor, should learn to avoid. Here are the top 5 common mistakes that investors make in case of mutual fund investment.

1. Think long-term
Do not invest in mutual funds if you are looking for a short-term gain. The market may be quite favourable at the start of the year, but it may deteriorate by the end of the same fiscal year. If you want to invest in mutual funds, you should be prepared to deal with the volatility of the market. Invest for at least 5 years if you really want to make profits on your investment.

2. Avoid one-year return plans
Some mutual funds focus on short-term returns, which may sound exciting and beneficial to inexperienced investors. This is why most people invest in these one-year mutual funds. However, such plans mostly involve obscure schemes, which do not succeed in the market. By the time investors learn from their mistakes, it is already too late for them to back out.

3. Consider the risks
Some mutual fund investment options offer a high rate of return in a given financial year. This may encourage investors to get on board with such a scheme, but experienced investors know that such a scheme may not perform as well in the next financial year. In fact, the rate of return may vary greatly from a given year to the next. So, investors should consider the risks involved with investing in a particular mutual fund. Check whether you are capable of taking such risks.

4. High ELSS investment
Equity Linked Savings Scheme or ELSS is a great choice for first-time investors. However, you should know the exact amount to be invested in the same. The Government of India allows a tax deduction of up to Rs. 1.5 lakhs on the investment. However, most people invest more than Rs. 1.5 lakhs in ELSS in the hopes of greater tax exemptions. This extra investment is completely useless as you won't get more than the Rs. 1.5 lakhs in tax exemptions.

5. Ignore the noise
If you have taken an informed decision of investing in a particular mutual fund, stay away from the chatter and predictions for the scheme. Paying attention to any such analysis will make you unsure about your investment, which may give you great returns upon maturity.

If you are a new investor in the field of mutual funds, try to follow the above-mentioned tips to get the best results.

Fund transfer: All you need to know about RTGS transfer

RTGS or Real Time Gross Settlement system is a method of transferring money from one bank account to another, using the Reserve Bank of India as the intermediary. As the name of the process suggests, the money transfer occurs in real time or immediately. Gross Settlement, on the other hand, refers to the fact that the entire amount is settled at once in a one-on-one basis.

Here is all you need to know about the RTGS transfer method and how it can be an effective way of transaction.

1. RTGS transfers are final
RTGS transfers are permanent, which means that you cannot cancel the fund transfer once it has been initiated. So, only engage in the RTGS payment method if you are absolutely sure about the amount that needs to be transferred.

2. No risk of settlement involved
Since the procedure is conducted in a real-time, one-on-one basis, you do not need to worry about settlement risks. Usually, a settlement procedure is in effect in case of other modes of fund transfers, which means that the amount transferred is not the amount received by the beneficiary. However, in RTGS, you can be sure that the exact amount will reach the beneficiary.

3. Minimum limit of fund transfer
If you want to transfer money using the RTGS mode of payment, you need to ensure that the amount is greater than or equal to Rs. 2 Lakhs. Any amount lower than this cannot be transferred using the RTGS payment. However, there is no upper limit to how much you can transfer using this method.

4. Fund is transferred individually
If you initiate a RTGS transfer, your payment will be processed and cleared individually. In the NEFT mode of payment, the transactions are cleared in batches, but in RTGS, each payment is considered separately. This means that you do not have to wait for the funds to reach the account of the beneficiary. As soon as you apply for the RTGS, you can ask the beneficiary to check their accounts for the payment.

5. IFSC code is mandatory
If you want to initiate the RTGS transfer, you have to provide the IFSC code of the beneficiary’s bank branch. There is no way around this and the transaction cannot be initiated without the proper IFSC code in question.

You can initiate RTGS transfer by accessing your bank’s internet banking portal and selecting fund transfer. Under this option you will find the RTGS method. Just enter the amount to be transferred and the beneficiary’s IFSC code to initiate the procedure.

How can a bike insurance provide the relevant protection?

If you are planning to purchase a bike or scooter, you may have already started looking for an appropriate insurance cover for the same. Bike insurance is not only vital for its safety, but is also mandated by the law in India. According to the Motor Vehicles Act of 1988, every two wheeler and three wheeler plying on public roads in India need to have valid insurance coverage.

Do you know how your two-wheeler insurance will save you in case of any unforeseen incident? To get a better idea of the same, first you need to know about the two kinds of vehicular insurance provided by most companies.

1. Third-party liability
This is the most basic form of insurance for your bike. If you are covered with a third-party liability plan, the insurance company will pay the damages caused to the third-party in case you are involved in an accident. However, you cannot claim any money for the damage caused to your bike and property in the same accident under the third-party liability insurance coverage.

2. Comprehensive coverage
While applying for the bike insurance online, you may often come across the term comprehensive coverage. Basically, this is a type of insurance where the company is liable to pay for the damages caused to both the third-party and you in case of an unforeseen incident. Apart from this overall coverage, a comprehensive plan often allows you to claim damages to your bike in case of riots, terrorist activities, storms, landslides and other natural calamities.

Why is insurance for your bike important?

Bike insurance is important for a number of reasons. These include,

• Ensuring that the two-wheeler can be repaired without you having to bear the cost of the repair work.

• Ensuring that the third-party involved in the accident does not suffer a huge loss as a result of the same.

• Bike insurance is also legally mandated and any two-wheeler without proper insurance coverage can be booked or fined by the law.
Just like you invest in a good health insurance for the safety of your family, an insurance for your new two-wheeler will ensure that your bike or scooter stays safe on the road. By paying a very reasonable premium amount, you can save a larger sum of money when it comes to repairing the vehicle after an accident.

While applying for the bike insurance online, remember to check the no-claim bonus options and other aspects of the plan. You can modify the coverage of most plans in order to get the kind of coverage you desire for your two-wheeler.