What are the changes in FD interest rates after the Budget 2018

Every year the budget does a reasonable job to ensure that the public are served well. They ensure that prices do not rise by a drastic level in comparison to the last fiscal year. Similarly this year, Budget 2018 have come up with many positive changes in the fixed deposit rates as well.

Fixed deposits are accounts where you deposit a certain sum of money for a particular period of time and then you receive a high interest each year. These fixed deposits are usually redeemable after 3 to 5 years for which you get back your principal amount along with the interest as well. It is an efficient mode of savings for common people in India.

The Budget 2018 made several changes to the FD interest rates Banks are likely to raise Deposit (Fixed Deposit) rates because of the following reasons:  

 Incremental credit
Till January 5, 2018 the fiscal credit stagnated at Rs 2.02 lakh crores, which have increased from Rs. 1.27 lakh crores. The banks are thinking to increase the interest rates to attract customers to have more fixed deposits with the banks. The banks want customers to deposit funds so as to improve their credit creation amounts which can edge out many undesirable fiscal deficit.

 Edging out treasury losses
By offering more FD interest rates, the banks will be able to generate more capital to avoid fiscal deficit. Thus, this capital would be used to generate incremental credit with respect to reducing excess Statutory Liquidity Ratio (SLR). Statutory liquidity ratio is the minimum reserve that any commercial banks needs to keep in the form of cash, gold, bonds etc.

 To reduce excess CWP
CWP is known as currency with public. Having excess currency with public means that they are not willing to look for investment opportunities which can take an adverse toll on commercial banks and various financial institutions. By increasing the rates, the public might look forward to investing as higher interest rates often act as bait.

 Benefits to Senior Citizen
The budget 2018 proposes that tax deducted at source (TDS) is no longer required under section 194A. TDS rates have now been increased from Rs. 10,000 to 50,000.  Therefore, there are no taxes charged on the interest which they receive on fixed deposits till Rs.40, 000. Whereas earlier the taxes were charged from Rs.10, 000. And senior citizens will also receive additional benefits for recurring deposit schemes as well.

Know Your NRE Account: 7 Top Features That Are A Must Know

NRE or Non-Resident External account is a type of bank account that is maintained by an NRI or Non-resident Indian. This kind of a bank account is instrumental in remitting the earnings received from abroad. The NRI can maintain this account both in his/ her home country and in an account situated in a country somewhere off-shore. The guidelines for maintaining an NRE account is pretty similar to that of any rudimentary account. There are a number of features of an NRE account that you should be informed about. Some of these are-

• Tax- Free: The NRE account does not impose any charges even if the quarterly balance is not maintained. Further, the balance that is kept in the account is free of any wealth-tax.

• The Perks of Repatriation: If the NRI account holder wishes, he or she can repatriate the complete credit balance outside of India, whenever he or she desires. And the process is very smooth as well.

• Interest Rate: Generally the NRE account offers a really high-interest rate. However, this rate can vary between different banks. Often the interest is calculated based on the closing balance every day, and the interest is often paid on a half-yearly basis in the months of June and December.

• It’s Convenient- The convenience factor of opening an NRE account is huge. It is extremely easy to open this sort of an account. All you need to do is go online, fill out a form which you will find on the respective bank webpage. Take out the printout, attach this printout version with your other document copies and mail it to the concerned bank in the home country.

• Joint Ventures: The NRE account features allow you to maintain this account jointly with another NRI, for example, your spouse or your kids.

• Further Benefits that Investment Brings: The NRE account gives you the privilege of investing in mutual funds by linking your savings account to the investment savings account.

• Benefits of a Mandate Holder: Another very unique feature of an NRE account is that you can appoint a mandate who will be in charge of operating your account on behalf of you. This mandate is allowed when written authorization is provided to a particular person to manage the said account on behalf of the primary holder.

Listed above are some of the features that are unique to an NRE account. In case you have been debating about opening a NRE account for a while one, read these features, think about the benefits you can enjoy and open your NRE account today!

Loans: A financial necessity in today’s time

Loan is the process of lending something to an individual/group of individuals, entity or an organization at a specific rate of interest and a promissory note which specifies the principal amount/thing borrowed, the interest rate and the duration of loan. Loans are an essential instrument for finance. Many financial institutions offer secured loans to gain interest; thus, loans benefit all the stakeholders.

It doesn’t always mean that financial institutions have to give loans to individuals or groups of individuals. We also have a “rich uncle” phenomenon. We often see others acquiring instant loans from friends and family where the terms of loans are much more flexible.

In the 21st century, where urbanization is occurring at a rapid rate, many business organizations and individuals make the most out of it. Businesses look to expand their current operations and individuals might look for better homes, better cars and what not. You might face problems sometimes to save money even though you have a stable source of income. This is why we need the financial institutions to help us out with loans. Both parties benefit from this as the debtors can get their job done and creditors can have a secured return.

WHY ARE LOANS A FINANCIAL NECESSITY

 Flexibility
When we acquire instant loans from financial institutions, we can choose the mode and method of repayment by virtue of a number of EMI schemes. These installment payments help you to get your job done and return the amount to the institution in a flexible manner.

 Fixed interests
Loans that are taken from financial institutions have a fixed rate of interest imposed on them. Therefore the debtor is aware of the installments that they need to pay and keep aside the funds for repayment. There is no fluctuation of interest rates.

 Tax benefits
Bank loans are a tax deductable expense. Therefore if any entity or individual has a bank loan, they need to pay fewer taxes.

 A sense of security
The financial institutions who give loans may ask for some collateral against the loan amount. This is because if you fail to pay the full amount, the bank retains the security against the unpaid amount. The applicants of loans also know that the loans that they are acquiring are from a reliable source which will benefit them.

TYPES OF LOANS

 Student loans
 Mortgage loans
 Auto loans
 Personal loans
 Business loans
 Pay day loans
 Consolidated loans
 Cash advances

What are the features of UPI payment you should be aware of?

Slowly but steadily, we are all shifting base to the online world to fulfill all our daily needs. The world has gone digital and so has the banking sector in India and rightly so. With the Government's Digital India campaign working wonders in terms of the digitization of various public services, more and more people are embracing online banking by virtue of its sheer convenience and security.

In a bid to give the goal of turning India into a cashless economy a further impetus, the NPCI (National Payments Corporation of India) has introduced UPI (Unified Payments Interface). Introduced in April, 2016, UPI is a real-time instant payment system that is set to revolutionize banking in India. Here is a list of the features of UPI that you must know about.

Convenience of Account-to-Account Transaction
This is the most unique and the best feature of UPI that has got millions of Indians waking up to its genius. UPI is the first payment system that lets you transfer funds directly between bank accounts. All you need is the recipient's account number and IFSC code, or his/her system-allotted virtual payment address, to transfer funds directly to that account instantly. With mobile wallets, you have to first load cash from your linked bank account into the wallet and then use it to pay for some service that you avail. But with UPI payment, you can access your bank account directly and make a payment from it without involving a third party. You, as a tech-savvy digital user, are always on the lookout for ways to reduce effort. And UPI allows you to do just that by letting you fulfill your banking needs in a lesser number of steps.

Safe and Secure
UPI is a highly-encrypted system that is based on 2 Factor-authentication. UPI payment is an easy-to-use single click payment system where the system allots each user a unique MPIN (like an OTP). One can access your bank account from the UPI app only after submitting the MPIN. So, it is a highly secure payment system and its safety is one of the many reasons why UPI payment has seen growth by a huge margin of almost 6000% in the fiscal year of 2017.

Round-the-Clock Service
Unlike brick and mortar banks, UPI payment services are available 24×7. So, you can access your bank account whenever and wherever you need through any one of the UPI apps available to make instant transaction.

Interoperability
A huge advantage of the UPI payment system is the interoperability provided by the different apps. There are a number of good UPI apps available in the country- be it the Government-regulated BHIM, the Flipkart-owned PhonePe or the UPI apps of the banks like SBI, HDFC Bank or Axis Bank. You can use one app to manage multiple bank accounts or to transfer funds between different accounts, irrespective of the bank in which you have your accounts.

What are the factors that can affect your car loan eligibility

Car loans are very handy for people looking to purchase a new and expensive vehicle. Lenders offer such loans so that you can get the desired car model and brand, even if you are unable to pay for the same in its entirety at that time. However, most lenders check to see whether a person is qualified to get a car loan.

Here are certain factors that affect your car loan eligibility and most of these will be verified by the bank prior to sanctioning the said loan.

1. Income
Your income will determine whether you are eligible for the loan amount you have applied for. People with higher annual income will be offered higher car loans and vice-versa. This is because people who have a greater income are also more likely to pay off  a bigger loan easily. After you apply for the loan, you have to present an evidence of your income, based on which the lenders will decide the loan amount you are eligible for.

For salaried employees, the loan may range from anywhere between 2 and 3 times the annual income of that individual. For instance, if you have an income of Rs. 2 Lakhs per annum, you may get up to Rs. 4 Lakhs or Rs. 6 Lakhs as car loan. However, for a self-employed individual, the maximum loan is usually 6 times that of their annual income.

2. Credit score
Credit score is a measurement which quantifies how good you are at repaying loans and credit. This score is created after checking the history of paying off loans and credit card bills. Usually, a score of 750 and above is considered to be good and most banks offer loans to people maintaining such a score. However, if your score is below this level, it may be difficult for you to get the car loan sanctioned.

To improve the score, take small loans from lenders and pay them off in a timely fashion. You can also ensure that your credit card debt is settled on time. Try to maintain the score if you want to get the best offers on car loans. This score is a big factor that determines car loan eligibility.

3. Age
The age matters with most loans and car loans are no different. In case of a car loan, lenders prefer people below the age of 50. This is because people over this age are nearing retirement and may not be able to pay off the loan amount before the tenure runs out.

So, consider these factors prior to your loan application and make sure that all of your documents are in order so that your application gets sanctioned.

How to Make Health Insurance Work For You?

With each passing decade, as human beings make more and more progress in various fields, art, science, culture, economics, performative arts, the demands on the human mind and soul has become even more exerting. The mental and emotional stress of a person living in the city is similar to the physical stress borne by a person living in the rural areas. In order to meet this toll on the human body, the need for various health treatments has increased. But these treatments can be very expensive for most people to undertake.

So how do you manage? A health insurance can make your life a lot easier. A onetime investment can go a long way in saving you at the neck of time when the need so arises. A health insurance takes care of the insurer's medical as well as surgical costs. For some health insurances, the company will reimburse you the expenses and some other companies will agree to make the payment directly.

How to make the most of your health insurance? Read this article to find out.

• Discounts Galore! – Many health insurance plans will give you a number of discounts on various health and wellness services such as gym or spa sessions or any other free of cost programs. Read your health insurance brochure to look out for these discounts and try to make it work in your favour.

• Invest While You are Still Young- If you purchase a health insurance plan before you turn 30, it means you can reap the benefits in your older years. When you are applying for a health insurance plan at a young age, you need not be concerned about the issue of an upper age limit. This is sometimes the key factor for making the final decision by health insurance companies throughout the country. As a young person applying for a health insurance, chances are that your application will not get rejected.

• Choose the Right Plan- Ensure to pick a health insurance plan that fits your family medical profile. For example, if there are elderly people in your house, select a plan that caters to these needs or if there is a possibility of an upcoming surgery on the horizon, purchase a plan that will take care of this.

• Keep Track of Statements- After completion of treatment, you will get a statement stating all the details as well as the expense breakup. This is known as Explanation of Benefits (EOB). Make sure that all the details are in order.

These are only some of the ways that you make the health insurance cover work in your favour. The benefits of a health insurance are many to begin with. Purchase a health insurance today to explore the wonderful world of health benefits.

What are the benefits of opening an online saving account?

A savings account is the most basic form of banking, and almost every earning individual is affiliated to one or more savings accounts. Opening such an account is vital if you want to use debit cards and apply for credit cards. It also encourages saving more of your income, instead of spending heavily.

A while back, people had to visit the branch of a bank in order to open a savings account. However, this process has become much more streamlined after the introduction of the online banking system. Here is a look at some of the benefits of online saving account opening.

1. Saves time and money
Money is spent if you choose to travel to the bank branch in order to open a savings account. However, apart from money, you also need to spend a considerable amount of time in order to visit the bank. Time is a precious commodity, and the online procedure helps you cut down on both the money and time spent for opening a savings account. You can sit down at home on a computer or on your smartphone and create an account in almost no time.

2. Compare the interests
Each bank may offer a slightly different rate of interest for the amount saved in the account.
When you apply for the account online, you can check the interest offered by the different banks and then apply for the one that suits your needs the most. When the account is opened offline, very few people compare the interest rates.

3. Faster activation
When you choose online saving account opening, your KYC registration is completed immediately, and your account gets activated as well. This means that you can open such an account in an emergency when you need to keep the savings in a place. However, you still have to wait in order to get the chequebook and the debit card for such an account. These will be mailed to your address in a week or two.

However, you need to keep in mind a few facts before opening an online savings account. These include some safety measures so that you do not become a target for some scams. Ensure that you open the official page of the bank where you elect to have your account. Do not trust proxy pages, which may take your personal information and then use them for criminal activities.

It is also recommended that you go through the terms and conditions before opening such an account online. If necessary, call up the bank representative and confirm what these conditions mean.