Are you aware of how the public provident fund works?

Public provident funds or PPF is a type of long term investment option which is quite popular in India. Such an investment option is usually preferred by and useful for self-employed individuals and those who work in small companies. Such companies do not provide options for GPF and EPF, which is why employees need to invest in the public provident fund. Take a look at how public provident funds function in India.

Rate of return of PPF
Interest rates for the investment is decided by the Indian government and is declared at the time of the Central budget. For instance, for 2017-18, the rate was 7.9 percent per annum. Furthermore, the calculation of the interest occurs on a monthly basis, but the fund is settled at the end of the financial year. The interest that you receive from the PPF is tax-free, which will increase your savings.

How to open and maintain PPF account
A PPF account can be opened quite easily. Almost all banks offer the service and people with savings accounts in the Post Office can also opt for such an account. If you want, you can conduct the entire business over the internet through your debit card or through internet banking services. A PPF allows for long term savings that matures in 15 years.

Features of PPF
A PPF is backed by the Indian government and there is almost no risk of losing your money if you decide to invest in such a plan. Apart from the interest being tax-free, the original invested sum is also exempt from the tax under section 80C. A public provident fund also offers a wide range when it comes to the amount of initial investment. You can invest as low as Rs. 100 at the first time.

Annually, you will have to deposit at least Rs. 500. However, the PPF does not allow deposits of more than Rs. 1,50,000 every year. Moreover, the PPF is transferrable, which means that you can transfer it to someone else’s name if you feel like it. This is especially useful if you have children and want to leave the money to them.

A PPF is valid for 15 years and matures at the end of that period. However, you can choose to extend the duration of the PPF by 5 years at the most. This extension can be done without making any contribution over the next 5 years or you can carry on making periodic contributions as well. Thus, a PPF is a great and flexible way of ensuring a steady savings by making a small investment.

Are you aware of these prepaid card benefits you can take advantage of?

Prepaid debit cards were introduced to meet the market need for a secure payment method that reduced the risk of over-spending. It lets you load funds directly onto your card from your bank account. It essentially just converts paper currency into electronic currency. The credit limit is set at the amount that has been deposited and is deducted from the same.

How do they work?
Prepaid debit cards, much like any other debit or credit card, come with their specific PIN (Personal Identification Number), but they do not let you spend from your bank account. Neither is there a pre-determined credit facility that you can use to pay for your purchases.

Instead you load an amount onto the card, and once that amount runs out, you can no longer spend anymore. You will have to upload more funds onto the card before you use again.

Advantages
Here is a comprehensive list of the advantages of a prepaid debit card.

1. No Debt
The absence of a credit facility lowers the risk of you incurring debt significantly. Since you would be spending only upto the amount that you have deposited, you could hardly over-spend. Besides inculcating discipline, it helps keep your budget tight.

2. Control
Unlike a credit card, where your card provider is setting your spending limit, you can decide how much money you are comfortable spending. And if you need to spend more on any occasion, you can quite easily transfer funds online onto the card.

3. Hassle-free
One can apply for a prepaid card online, and also make direct deposits. They are also easily accessible on one’s mobile devices.

4. No Penalties
Since the money accessible for use is only the amount that has been deposited, there are no repayments that need to be made. Also, there are no penalties or fees to be paid for late payments or time extensions.

5. Multi-purpose
One can withdraw instant cash from ATM’s using this card and the associated PIN. They can also be used to pay utility and other bills with it.

6. Improved Credit Rating
One can improve one’s credit rating by using a prepaid debit card. By charging a fee on a monthly basis, referred to as a Credit Booster, for a determined period of time, your card provider will show this as an honoured credit agreement in your credit file.  Thereby increasing your credit rating.

By virtue of the aforementioned advantages, prepaid debit cards have gained incredible popularity. And with such benefits it isn’t hard to see why.

Here’s why you need a toll tag recharge if you travel with your own car

A toll is the charge levied when you use a bridge or a road to cross from one jurisdiction onto another and is upayable to a person who has been assigned to give you a receipt to acknowledge the transaction. But now with paper currency and cash transactions fast getting replaced by digital transactions, toll tags have become extremely popular. They allow you to pay toll online. A toll tag is a simple, reloadable tag that enables an automatic deduction of the charges without you having to stop at each toll gate to make a cash transaction.

It has to be linked with a prepaid account and employs Radio-frequency Identification (RFID) technology. It allows for the applicable amount for toll to be deducted without any kind of hassle. The RFID tag is attached to your vehicle’s windscreen, once the account associated with the tag has been activated. It is an ideal solution for car trips across national highways.

The following are some of the biggest benefits of a toll tag.

1. Saves Fuel and Time
You no longer need to stop your vehicle at every toll gate and make a payment. You don’t need to waste time or fuel when you have check-in timings to think about. Your toll amount will be automatically deducted from your account.

2. Alerts
Instead of the paper receipts, you will receive a SMS notification on your registered phone number, every time a toll has been deducted.

3. Safety
When travelling you should opt to carry as little cash as possible, in order to reduce the risk of theft. If you pay highway toll online, you reduce this risk significantly. By a simple online transaction with a NEFT or RTGS, you can recharge your toll tag account in case you run out of balance.

4. Flexibility
You can choose to opt for a monthly or local pass if you feel that you would need to travel rather frequently. Also, if you have a balance amount on your account, you will be reimbursed for the same. If you were to lose your vehicle, or to damage it in some way, you could just as easily block your toll tag.

When travelling in your own car, whether alone or with family, you want it to be as smooth and hassle-free as possible. Being able to pay toll online saves time and a lot of unnecessary inconvenience. Whether you are travelling for leisure or for business, it helps make your journey more pleasurable.

Atal Pension Yojana (APY): All you need to know about this Social Security scheme

In 2015, pension options for the unorganized sectors finally became a reality in India. Atal Pension Yojana or APY was introduced in place of the Swavalamban Yojana that existed before. The latter provision was not well received, which is why the APY replaced it. Here is a look at some of the features of the scheme and what it brings to the table.

Eligibility for the scheme
You are eligible for the scheme if you are a citizen of India with a valid bank account. You should also be between the ages of 18 and 40 in order to qualify for the pension yojana.

Monthly payments or premiums
The premium depends on the amount of pension you want to receive after you turn 60. The scheme offers pensions starting from Rs. 1000 and go all the way to Rs. 5,000 every month. So, if you want a pension of Rs. 5,000 after you turn 60, you will have to pay higher premiums compared to the amount of premium you will have to pay for receiving Rs. 3,000 after reaching 60 years of age.

The premium also depends on the age at which you enrol for APY. The earlier you join, the lower will be the amount of your monthly premium and vice versa.

Benefits of the pension scheme

1. The scheme allows people working in the unorganized sector to receive a steady flow of money even after retirement. This pension is guaranteed and can be very useful for economically challenged people in the society.

2. Even if the subscriber dies, the spouse will continue to receive the same amount of pension for the rest of his/her life. Furthermore, after the death of both the subscriber and his/her spouse, the nominee in the plan will be set to receive the pension every month.

3. Atal Pension Yojana offers a flexible range for the amount of pension that a person wants. Moreover, the subscriber can change the amount at any point of time prior to turning 60. This can be very useful in case of financial emergencies, which may prevent the subscriber from paying the premium required  for receiving a higher amount of pension.

How to apply for APY?

Signing up for the Atal Pension Yojana is very simple. All you need to do is to visit the bank or post office where you have a savings account. If you do not have such an account, you can open one prior to opting for APY. Next, fill up the APY form and submit the same. You can also opt for the pension scheme online.

The Atal Pension Yojana (APY) is a great financial tool that will empower all individuals employed in the unorganized sector by providing them a steady flow of money every month after retirement.

Car loan EMI calculator: Why you need this tool when planning your car loan

A car loan is quite handy for people looking to purchase an expensive vehicle. Such a loan may allow you to get your dream car, even when you do not have the financial standing to pay the entire price yourself. However, before taking the loan, it is always better to check the kind of interest that you would need to pay and also calculate the monthly EMIs for the loan.

A tool known as the car loan EMI calculator can aid you in determining the exact monthly payments for the loan you are about to take. Here is a look at why you should definitely use this calculator before opting for a loan.

1. Determining the EMI for the loan
The monthly instalments for the car loan should be within your comfort range. For instance, if you are comfortable paying Rs. 15,000 a month, then you should take a loan whose EMI is be below that upper limit. The online car loan EMI calculator can aid you in finding the sweet spot when it comes to the amount of loan that you should take so that your EMIs remain in an affordable range.

2. Comparison of EMI and interest rate
If you are looking for a car loan, you would do well to perform an extensive research regarding all reputed lending companies. The interest rate being charged for the loan and the tenure for the same determines the EMI that you would need to pay. The EMI calculator for car loan will help you compare the rates and get the loan that is most affordable for you.

3. Stops you from borrowing too much
When you borrow money without using the EMI calculator for car loan, you are likely to take too high of a loan. However, if you perform the calculation, you would know how much you should borrow which will prevent you from taking a loan that you may have difficulty in paying back.

In order to calculate the EMI for a loan, all you need to do is to open the page containing the EMI calculator. Enter the amount that you want to borrow along with the rate of interest and the tenure for the repayment. Click on the 'calculate' button and you will be provided with the exact EMI sum for that particular loan.

While a car loan is a great tool that will help you in owning your dream car, a car loan EMI calculator is the tool that will make sure that the huge investment does not destabilize you financially.

Corporate banking versus wholesale banking: What is the difference?

Banking is an umbrella term under which there are various facets of the modern day financial system. While most people classify anything related to finance as banking, it is important to know the distinctions between the different terms used in the field in order to gain a proper understanding of finances.

You may have heard the terms corporate banking and wholesale banking services during certain financial conversations. Take a look at what these terms mean and what the differences are between the two.

What is Commercial banking and Wholesale banking?
Corporate banking refers to the financial and wealth management services that are offered to corporations, small and medium-sized enterprises (SMEs) or businesses. This is often considered to be one of the most profitable forms of banking, as the commercial banks cater to the needs of entire businesses. At the end of the day, the goal of corporate banking is to assist companies in achieving their financial goals and objectives.

Wholesale banking, on the other hand, refers to transactions between a merchant bank and other financial corporations. These corporations are usually the leading names in a particular industry and are considered to be large businesses.

Thus, corporate banking deals with the needs of the SMEs and wholesale banking system deals with the bigger corporations.

Corporate banking Vs Wholesale banking: The clients
In case of corporate banking, the clients are small and medium-sized businesses that often require the help and advice of financial experts, in a bid to maximize their profit and prevent the corporation from drowning due to one small mistake. There is no limitation on the clients that commercial banks may take work for. However, the same is not true for wholesale banking.

Since wholesale banking involves the largest banks and the leading companies, government agencies, pension funds and the private companies that have the greatest turnover each year can afford it. However, any exchange or transaction between two institutional banks is also considered to be within the bracket of  wholesale banking services.

Eligibility criteria  
For corporate banking, you need to have proper paperwork to become designated as a corporation. If the company that you run is still not classified as a corporation, you are ineligible for the banking service.

For wholesale banking on the other hand, you either need to run a bank or some other large-scale financial institution to qualify.

Now that you know the basic difference between corporate banking and wholesale banking, you can ask your financial advisor more detailed questions about the same and proceed accordingly.

When should you apply for a gold loan?

Loans are necessary financial tools which can be used by people in times of emergency or need. A gold loan is a specialized type of loan which is provided by the lender against the gold assets that you have. The terms and conditions for such a loan differ from one lender to the next.

Gold loans are beneficial under a number of circumstances. Here is a look at some of the conditions under which a gold loan can be quite advantageous and beneficial.

1. Instant fund requirement
When you apply for a loan, you would ordinarily need to wait for a few days before the money is sanctioned. However, it takes no time for a gold loan to get sanctioned. You would just need to visit the lender with the gold that you want to keep as collateral. The lender will then calculate the value of the gold and sanction a loan accordingly.

2. Fast loan repayment
You may need some emergency money at some point or the other. In such a case, a gold loan is the perfect solution. You can take the loan for the time being and repay it within a year or two, since the loan repayment for the gold loan typically has a tenure ranging from 6 months to 2 years. Furthermore, repaying the loan early means that you would need to pay a very limited amount of interest on the borrowed sum.

3. Very small loan needed
Most other kinds of loans have a minimum limit when it comes to the amount of money that is to be lent out. These limits are generally above a few lakhs. However, you may not need that much money to meet your requirements. In such a case, a gold loan is the perfect option for you. The gold loan amount is decided on the value of the gold which you deposit to the lender as collateral. So, in a way, you are deciding the amount of loan that you want.
So, with a gold loan in India, you can borrow as little as a few thousand rupees from the lender, if that is all that you require at the moment.

4. Freedom of usage of loan
Lastly, if you want the loan for something that you do not want to disclose to the lender, you have two options. Under such a circumstance, you can either opt for a personal loan or a gold loan in India. However, the interest charged for a gold loan is much lesser and is therefore the much better option for you.

Thus, a gold loan is a much more flexible option for a person in need of emergency funds or someone who needs only a small amount of money as loan.