What are the pros and cons of telegraphic transfers?

Telegraphic transfer is a method of transferring money from one country to another. This service is offered by most international banks and is the simplest way to remit money from a foreign nation to India. The denomination of the fund does not pose a problem and all currencies of the world are eligible for telegraphic transfers. This method is also known as Telex transfer or TT and wire transfer.

How is money transferred using TT?

The funds transferred are not in the form of literal paper money, but as digital money. This digital form of the fund is transferred from one bank to the credit union and subsequently is sent out to the beneficiary bank account. This type of transaction occurs using the SWIFT or Fedwire system.

In order to initiate a wire transfer, you would need to communicate the same to your bank. You would also need to provide the details of the beneficiary’s account. The entire process of money  wire transfer can be conducted offline by filling up a form at the bank. However, some banks may also offer online options for conducting such a transfer.

In order to receive money via telegraphic transfer, you would need to provide your bank details to the money sender. You should also ask your bank about incoming wire transfers; the transaction usually takes a couple of days to be completed.

Advantages of telegraphic transfer

Money wire transfer is generally the best solution in case of emergency remittance of money. Since the transaction occurs via the banks, you have to pay a very limited amount of money for the transfer itself.
Furthermore, remittance through an agency or outside business is always a risky affair. The company that you choose may scam you out of the money and you would have no way of getting it back. A telegraphic transfer involves two banks, which means you can rest easy knowing that you are not about to be duped.

Disadvantages of telegraphic transfer

The telegraphic transfer is a time-consuming process, where it may take anywhere between 2-3 days for the money to reach the beneficiary’s account. This can be a problematic feature and can be considered a con by a person in need of emergency wire transfers.
Since, the transfer occurs from one country to another, the processing can take even longer due to different time zones, holidays and weekends.
Like every other thing in life, telegraphic transfers have their shares of advantages and disadvantages. So, it would be wise of you to go through the terms and conditions of your preferred NRO savings account so as to make an informed decision.

What are the benefits you can gain from the NRO savings account?

When you leave India and settle down abroad, you would need to re-designate your savings account into either an NRE or an NRO account. The NRO account is also known as the Non-Residential Ordinary account and lets you handle anything you earned in India in the form of dividends, rent, pension etc. Here is a look at some of the advantages of an NRO savings account.

1. Savings in foreign currency
An NRO savings account will allow you to keep money both in INR and other currencies. This is advantageous, since you no longer need to convert the foreign currency into INR in order to store the funds. This way, you can choose to convert the currency when you get a favourable exchange rate, instead of converting it prior to depositing it into the account.

2. Essential for making payments in India 
The NRO saving account is very handy in case you have certain expenses to cover in India, even while you live abroad. For instance, you may have taken a loan prior to leaving the country and now you need to repay the same. The easiest way to do this is to open an NRO savings account, so that the lender can get the EMI each month from this account.

3. Helps to maintain income in India
If you have a source of income in India, an NRO saving account will help you handle the transactions with that source. For instance, you may have some money coming in from rent or a business every month. With an NRO account, the income will be safely stored in India and it will be easier for you to manage these funds.

4. Joint Holding
According to the mandate from the Reserve Bank of India (RBI), you can jointly hold an NRO savings account with an Indian resident which will make it more convenient for you to regulate the account. You can choose to open an NRO account with a fellow NRI as well.

However, there are some drawbacks to the NRO account, which may cause you to rethink about your decision of opening such an account. For instance, the interest generated on the sum present in the NRO account is taxable. In fact, the government charges 30 percent tax on the interest garnered from such an account. Government taxes such as income tax, gift tax, wealth tax, are applicable to the NRO savings accounts.

NRO accounts have both advantages and disadvantages to them. So, evaluate you needs carefully and decide whether an NRO account is suitable for you or not.

What are the features of the NRE savings account you need to be aware of?

An Indian national who holds an Indian passport and resides overseas is known as a non-residential Indian. For such a person, it is impossible to operate an ordinary savings account in India. A specialized account, known as NRE account, acts as the savings account for NRIs and is the most hassle-free way in which you can utilize your foreign earnings in your country.

Such an account differs from a normal savings account in its features. Take a look at the salient features of an NRE savings account.

1. Single or joint accounts
A NRE saving account can be opened in the name of a single person, while two people may also open it jointly. So, you and your spouse do not need to maintain separate accounts in India, when you reside abroad.

2. Documents required
In order to open the NRE savings account, you will need to fill out a form and submit it along with the copy of your passport, visa, two passport sized photographs and the money that you want to keep in the account initially.

3. Currency of the savings
The savings in the account will be maintained in INR and not under any foreign currency. So, when you remit money from abroad, the fund will first be converted into INR and then stored into the NRE saving account.

4. Repatriable account
NRE accounts allow you to freely repatriate the savings abroad. This means that you can transfer the money that you have saved in such an account to your bank accounts abroad. This is quite helpful, in case of emergency requirement of money.

5. No Taxation
The money that you save in an NRE account will not have any tax levied on it, which will help you in saving more. Even in the case of repatriation, TDS will not be levied on the money in question.

6. Payments through NRE account 
You can use the account to make payments in either INR or in a foreign currency. In case of foreign currency payment, the money will first be converted from INR to the currency of your choice at the prevailing exchange rates.

The features of the NRE account may differ from one bank to the next. So, it is essential for you to check the interest rate and the terms related to the NRE account for a particular banking institution and then you can choose to open an account in the bank, the terms and conditions of which align with your requirements.

4 useful tips you need to know about bike insurance

When you purchase a bike, the first thing that you need to do is get an insurance coverage for the vehicle. It is the best security instrument for the bike and is also mandated by the law in India. However, if you are purchasing such an insurance for the first time, you need to keep certain things in mind to ensure that you get the best deal.

Here is a look at some of the tips that you should follow when you consider purchasing a bike insurance online.

1.Know the Different Plans
Bike insurance plans are primarily divided into two types, namely, third-party liability policy and comprehensive policy. You should know what the differences are between the two in order to judge which one suits your needs the most.
A comprehensive plan covers damages that your bike may undergo during roadside accidents, along with other coverage for damages caused by natural or man-made disasters. The third-party insurance policies on the other hand will only cover the damages caused to the other party involved in an accident with your bike. Under such a plan, there is no coverage for the damage that your bike suffers during the accident.

2. Premium and coverage are Interlinked
A close link exists between the premium for the insurance and the kind of coverage that it offers. For instance, in case of a comprehensive coverage, the premiums will differ from the premiums of a third-party liability. Before purchasing the insurance, make sure you are clear about the range of coverage that you are looking for along with your budget for such a plan.

A bike insurance calculator will help determine the premium for a particular plan and is immensely handy while purchasing a bike insurance online.

3. Know the Insured declared value
When you purchase a bike insurance policy, the insurer will reveal the maximum value of coverage that the plan will offer. This value is calculated on the basis of the market price of the bike as per the selling price listed by the manufacturer of the bike. This value is later adjusted according to the depreciating value of the different parts of the vehicle. At any rate, you want an insurance policy that offers the highest IDV for your bike, so that you can claim the maximum sum if the need arises.

4. Check the No-claim bonus
Lastly, check the no-claim bonus that a particular policy offers. A no-claim bonus can only be claimed, if you go through an entire term without claiming the insurance even once. Under such a condition, most insurance providers will likely offer a certain discount on the premiums when you renew the policy.

With these tips in mind, it is quite likely that you would be able to find the perfect bike insurance plan for your dream bike.

Secure your personal loan easily by knowing these terms

Unlike all other loans that are provided for a specific reason such as purchasing a motor vehicle or the dream home, a personal loan can be taken for any reason. So, while such a loan is a great option in case of sudden requirement of funds, you should be aware of a few facts before deciding to apply for one.

1.The interest rate
Often, the interest rate charged for a personal loan is different from the rate charged for other loans. Make sure you keep an eye on the rate charged for the personal loan that you want to take. This will ensure that you do not put any unnecessary burden on your own finances when you opt for one.

2. Keeping credit score high
Whether you are eligible for a personal loan or not will depend on your credit score. A credit score is the rating that lenders and banks assign you on the basis of past debt payments. So, when you pay your credit card bills on time, your credit ratings improve automatically, and vice versa. For a personal loan, the lenders pay special attention to your credit score.
If your scores are not on the higher side, the best thing to do would be to take small loans and pay them back on time, prior to when you apply for personal loan.

3. The tenure of personal loans
A personal loan’s tenure can be anywhere between 1 and 5 years. This means that depending on the amount of money which you borrow, the monthly instalments can be difficult for you to bear if the tenure is not long enough. Thus, the best way to reduce the EMI is by taking a smaller loan, which would then result in much smaller monthly payments.

4. Purpose of the loan
If you apply for personal loan so that you can finance your child’s education abroad, then you may be better off with an education loan. So, before you take the personal loan, consider the reason why you need the money and if there are better loan options available.

5. Watch out for extra expenses
Some lenders will discreetly throw in an insurance policy along with a personal loan and have you believe that the two are not mutually exclusive. This will be an additional expense for you and you may not even know about it, till after taking the loan. So, read the terms and conditions of the loan properly before applying for the same.

World Health Day: All you need to know about health insurance

World Health Day 2018 was an incredible day. Focused on educating and spreading the virtues and necessity of health insurance, this year commemorated its 70th year. WHO has been, over the years, dedicated to bringing attention to the importance of health around the world. They have worked extensively in their effort to advocate a healthy lifestyle and provide the tools necessary for it. This World Health Day, the slogan was “Universal health coverage:"everyone, everywhere”. The focus was to ensure that everyone can have access to the essential health services without any kind of financial hardship. Health insurances and their benefits were discussed and advocated.

What is health insurance?

Health insurance is an insurance policy that covers in part or in full the risk of medical expenses of one or more individuals. By accessing the health details of the insuree along with certain other factors such as age and gender, insurance companies devise plans that will give them the optimum coverage and support. In exchange for a premium over a fixed period of time, the insurer offers health care benefits for both injuries and ill-health. The benefits also extended to damages caused by accidents, disabilities, or an accidental death.

Benefits Covered By Health Insurance

1. Outpatient Care-
The medical attention one receives without having to be admitted in a hospital is covered by a health insurance. It is deal for individuals of advanced years and those with disabilities.

2. Emergency Care-
Health insurance plans also cover your trips to the emergency room. In cases when urgent medical attention is required, a health insurance helps cover the expenses.

3. Pre and post partum care-
A health insurance plan also covers the medical expenses that are associated with pregnancy and childbirth. The tests, scans and medicines that are a part of pregnancy and childbirth are covered by this plan.

4. Pediatric Services-
It includes eye care and dental care and also preventive services such as vaccinations, screenings for diseases in children.

5. Physiotherapy-
Devices and services that one might need to recover from an injury or a chronic condition are also covered by health insurance plans.

6. Mental Health and Substance Abuse-
Addictions or different kinds of substance abuse and mental disorders are covered by health insurance plans. This includes psychotherapy, counseling and psychiatric rehabilitation come under this plan.

The health care benefits of different plans may vary slightly with regard to the insurer. You should compare the benefits and choose one that suits your needs the best to make sure that a health woe does not burn a hole in your savings.

Why travel insurance is a must before your summer travel trips?

More often than not, life does not go as we plan. You can make lists and itineraries but things have a tendency of going awry, especially when it comes to travel these days. Everyone looks forward to those summer trips with friends and family. It’s a chance to get away for a couple of weeks from the routine of everyday life. You want to let loose and have fun. You never know who you are going to meet and what kind of experience you are going to have. But with the perennial worry about work, illness during the trip, problems with transport weighing heavily on your mind, you might find it difficult to enjoy yourself. A simple travel insurance can ease your worries.

Here a few of the biggest travel problems, a travel insurance takes care of-

1. Lost Luggage
When travelling by flight, especially on international flights, losing your luggage is a very real possibility. Carrying the luggage on isn’t a feasible option, and every time you check it in you run the risk of losing it. A travel insurance reimburses you for each person that it covers. A good tip is to make a list of every bag’s content, it is helpful with the insurance claim process.

2. Emergency Evacuation
You might never know the reasons that requisite an emergency evacuation. It could be something as simple as an outbreak of flu or bad weather or something more serious like a strike. A basic travel insurance covers almost all such problems.

3. Support
In case of a cancelled flight, if you find yourself stranded, a travel insurance will ensure that you find a place to rest and that you recover your travel documents. Most travel insurance online also provide legal assistance if required.

4. Cancellation
There might be various reasons that force you to cancel your travel plans at the last minute. There could be an emergency in your family, an unexpected death or injury of a friend or loved one. Or something unforeseen might have happened to your travel companion. In such cases, you might either reschedule or ask for a refund. A travel insurance can help you with both, as it covers late minute cancellations and ensures that you are reimbursed your money.

Travel insurance is a safe bet as it protects you from the worst when travelling. Enjoy your trip with your friends and family with the assurance that things would be taken care, if they were to go wrong.