Banking with different cards in India

Banking has become so convenient and easy in the modern age. In fact, our bank cards have become those objects on which we rely on the most in our everyday lives. You can walk out of your home without cash, but you cannot do so without your card. Whether it is an ATM card, a debit card, or a credit card, each one comes with various special benefits and specifications, making our financial lives easy. Here are the different cards in India which facilitate smooth banking.

ATM Cards: Meant to facilitate bank customers with a sense of flexible banking, especially during non-banking hours, ATM cards are offered by all banks. Besides giving you the flexibility to withdraw money at any given time, ATM cards also allow you to make deposits, transfer money between accounts and check your account balance. You can also get a cash advance on your ATM card and make a loan payment at any time with this card. All you have to do is visit the nearest ATM of your bank. Furthermore, you can use your ATM card to withdraw money at any other bank ATM for a specified number of transactions per month.

Debit Cards: Indian banks issue ATM cum debit banking cards which are backed by either MasterCard or Visa. Debit cards essentially function like a bearer check, in that the amount is immediately debited from your account when you swipe your card at a merchant establishment. To ensure that your card is not swiped without your authorization, you must enter your ATM pin for the transaction to follow through. Additionally, you can authorize the use of your debit card when you travel to international destinations.

Credit Cards: Unlike ATM or debit cards which are issued by your bank with your account, you can get a credit card from any bank, even if you do not have an account with them. You do not necessarily have to link a bank account to your credit card. Credit cards are basically like loans that a user can take on their card. You can put all your expenses on a credit card and pay them monthly. If the dues are paid on time, the bank does not charge you any interest for the money loaned, however if you fail to pay them on time, the interest rate keeps compounding until the payment is completed. Credit cards come in very hand if you know how to utilize them well.

Prepaid cards: If you’re travelling abroad and are on a budget, you could consider purchasing a prepaid card. Prepaid cards are simple in that, you can load a pre-determined amount of money on the card and use it like you would a debit or credit card. You can refill this bank card when it runs out of money and use it again. A Forex card is a good example of a pre-paid card on which you can load money in different currencies.

Save money with the 5 best mobile payment applications in India

One of the biggest perks of living in the digital age is that life has become stress-free. You don’t have to worry about carrying physical cash on you. Everything you need to do, whether it is shopping for groceries, paying bills or recharging phones, can be done at the click of a few buttons thanks to the various online payment solutions. What’s even exciting is that these apps offer huge discounts and cashback. If you’ve not yet gone digital, it is time to do so. Read on to find out the 7 best mobile payment apps in India that you must try.

PayTM: One of the most popular and reliable apps out there, PayTM comes in handy for almost everything; from ordering food online, to booking train/flight tickets and paying bills. What’s more, you can use PayTM for transferring money, paying bills at partner restaurants and even shopping. With over 300 million users nationwide, PayTM has also branched into its own online store where you can get deals of the day and earn cashback on almost every transaction.

PhonePe: You can directly link your PhonePe app to your bank account to conduct transactions. PhonePe is known for offering the easiest solutions for bill payments and mobile recharges. You can pay your utility bills and transfer funds to family and friends or even request fund transfers through PhonePe. The app is specially known for its user friendly interface. It also allows you to earn from referral codes and offers good cashback.

PayZapp: A popular UPI-powered online payment solution, PayZapp was introduced by HDFC Bank in 2015 and serves like an all-in-one app, eliminating the need to stuff your phone with innumerable apps. Popular online market places like BookMyShow, Goibibo, ClearTrip, Flipkart, Big Basket and numerous others have tied up with PayZapp and can be accessed from this single interface. Besides, you can use PayZapp to transfer money to your bank account or with people in your phone’s contact list. PayZapp also comes in handy for paying all kinds of bills.

ICICI Pockets: ICICI bank is another bank that has branched out and introduced its own visa-powered e-wallet that can be used by customers of any bank. Although not as elaborate as PayZapp, ICICI Pockets’ wallet feature can be used for sending money to family/friends bank accounts just by using their mobile number, e-mail id or even their Facebook ID. Funds can be sent instantly using debit cards or internet banking.

Freecharge: One of the first mobile payment apps in India, Freecharge has come a long way since it was first launched in 2010. Freecharge entered the market when the smart phone did and paved way for several similar apps to follow suit. What makes Freecharge interesting is that it has a simple and smooth interface. Additionally, it is known for offering a variety of discount coupons and cashback offers. Several merchant outlets also allow you to make payments via Freecharge.

Features of PPF accounts

It is not necessary that all employers provide their employees with a Provident Fund; a percentage of money deducted from an employee’s salary and matched by the employer, which serves as a saving. Small business owners and self-employed businessmen must make provisions to save money for retirement and a good way to put away some money for the future is to open a Public Provident Fund Account, which serves as a great investment vehicle for your retirement savings.

What are the features of PPF investment account?

There are a few basic features of the PPF account that you must be aware of.

Tenure: PPF investment account is a 15 year product which comes with a lock in period of 16 years. You cannot count the first year of investment in the maturity period. So if you made your first PPF investment in 2018, your account will mature in 2034.

Deposit limits: You must invest a minimum of ₹500/- per annum, where the maximum investment limit per annum is ₹150,000/- in a financial year. The deposit can be made monthly or in a single shot anytime during the financial year. Furthermore, you can open your PPF investment account with an initial deposit of only ₹100/-

Rate of interest: Earlier, the government used to offer a fixed rate of interest for the entire tenure of the account, however as per new RBI guidelines, the government declares a new rate of interest every quarter.

Account holders: At any given time, an individual is permitted to hold only one PPF account.  A salaried or self-employed individual can open this account but no Hindu Undivided family or association is permitted to open it. Furthermore, an individual can open a joint account with a minor provided he/she is a parent/guardian but not a grand-parent. Besides, opening an account with a minor, PPF accounts cannot be opened as joint accounts. NRIs are also not allowed to hold these accounts.

Premature withdrawal: Most people are unimpressed by the 15 year lock-in period and so they avoid investing in the PPF scheme. However there are provisions for pre-mature withdrawal with PPF. You can make partial withdrawals from your account during financial crises. Withdrawals from the account are permitted after 7 years and you can withdraw money from the account once a year.

Loan on PPF: Between the 3rd and 6th year, you can apply for a loan against the money accumulated in your account. Loans can be availed amounting to a maximum of 25% of the balance in your account.
Discontinued accounts: Depositing a minimum amount of ₹500/- per annum in your account is mandatory. If you fail to do so, your account will be deemed as discontinued. However the interest on your account will continue to accrue. In case you miss depositing the minimum account in a given financial year, you can pay a penalty fee of ₹50/- for every year you defaulted plus subscription arrears of ₹500/- per financial year to regularize your account.

Electronic toll collection- the smart system revolutionizing transport in India

Remember the thrill of driving on a high-speed expressway, only to be stopped in long queues to pay toll taxes. How infuriating is it when the driver in front of you is not ready with the cash or is busy in a verbal match with the toll-collection agent. This annoying experience is now a thing of the past, thanks to the NHAI authorities who’ve mandated the implementation of the National Electronic Toll Collection Program. As a result of this brilliant program, and with a little help from technology, electronic toll collection booths are helping to reduce highway congestion and the time taken for processing a toll, while also enabling a reduction in the leakage of revenue.

What is FASTAg and how does it work?

Simply put, FASTag is like the Aadhar Card of your vehicle, with details of your vehicle registration number, chassis number etc. It looks like your vehicles RC book (a debit-card like chip card) and is meant to be attached to your vehicle. This FASTag card is a simple to use card that is also reloadable. All you have to do is tag the card at the toll gate, without stopping for a cash transaction. The FASTag enables the deduction of the applicable toll charges automatically form your account. After the toll is deducted from your account, you can exit the toll plaza. The tag can be affixed to your vehicle’s windscreen and deducts the toll automatically as it employs RFID (radio-frequency identification) technology. The idea behind electronic toll collection is to eliminate contact with toll agents, reduce the time spent at toll windows and continue a hassle-free journey.

Where can I purchase FASTag?

Under the guidelines of the NHAI and the IHMCL, several banks have joined hands with the National Electronic Toll Collection initiative launched by the National Payments Corporation of India (NPCI). You can find the FASTag application form on your bank’s website, or even purchase it from partnering banks such as ICICI Bank, SBI and HDFC Bank (even if you don’t have an account with the said bank) among others.

How to register for FASTag?

You could visit the website of any of the aforementioned banks, go on the FASTAg link and fill in your personal details like your name, address, phone number and upload mandatory KYC documents like your driving license, pan card, Aadhaar Card etc. The system will also ask you your nearest toll and the approximate distance of your home from the toll, along with the nearest post office. You then have to input the details of the nearest branch of the bank website you’re applying from, along with its IFSC code. After this, you must input your vehicle details and the number of vehicles for which you need the FASTag. After completing the final payment, you will receive the FASTag within 2-3 weeks which you can use at electronic toll collection booths.

Calculating the EMI of your car loan

For most of us, the first big loan we ever take is usually a car loan. Affording a car has become easy thanks to these easy, minimal documentation car loans. Like the name suggests, car loans are sanctioned only for the purpose of purchasing a car. Since these loans are smaller in amount as compared to say a home loan or a business loan, the loan periods are relatively of shorter durations than the aforementioned loans and the loan amount also tends to be comparatively smaller.

Factors to consider before applying for the loan
Before applying for a car loan, you must check whether it fits into your budget. You must consider aspects like the amount you require, the tenure your need and the interest rate you can afford. You can find out everything about this, before even applying for a loan, simply by using a car loan EMI calculator that is available on most lender websites.

What does an EMI calculator look like?

An EMI calculator tool, typically has the following three factors

Principal: You must input the principal amount of the loan you wish to borrow e.g. ₹500,000, after considering the amount you can pay as down-payment.

Tenure: Input the details of the tenure you wish to repay the loan in e.g. 5 years. Car loans generally range from 1-7 years.

Rate of Interest: Finally, you must input the rate of interest you can afford. Unlike home loans, car loans usually have fixed rates of interest which means, you will be charged a flat, single interest rate throughout the tenure of the loan, (5 years for example) regardless of the conditions of the market. Your Equated Monthly Instalments (EMI) while remain the same, month on month until the loan is repaid.
Monthly EMI: After inputting these details in the EMI calculator for car loan, you will find that you will have to pay a monthly EMI of ₹10,624.

Availing the best interest rates on the car loan
One thing you must keep in mind to be eligible for good rates of interest is that you need to have a good credit score. Before meeting with a bank to apply for the car, it is a good idea to obtain a report of your credit score. You can also find websites that help you find your credit score, the links for which are also available on your car loan EMI calculator web-pages. Your chances of being offered great terms of the loan as well as lower rates of interest, along with a big loan amount are heightened, if you can show a credit score of 750 points and above. In case your credit score is less than 750 points, you could wait to improve the score and then apply for your loan which can decrease the chances of your loan being rejected.

Taking a loan against gold- how it works

Often in life, we find ourselves in dire need of instant funds. It could be to pay for our children’s higher education or to meet hospital expenses of a loved one. What do you do in such a situation? One way to go is to take a personal loan, but the process could take some time. In such a time, you can let that gold sitting idle in your bank locker to come to your rescue.  A loan against gold is a great, hassle-free and quick finance option as your gold serves as collateral. You require minimum documentation. Banks can sanction your loan amount depending upon factors like the purity of gold, its form (jewellery, biscuits, coins or bars) etc. Here’s what you should consider when taking a loan against gold.

Where can I get a gold loan?
You can get a gold loan from various banks like SBI, Axis Bank, HDFC Bank, ICICI Bank etc. Alternately, you can also visit financiers like Mannapuram and Muthoot.

The Quantum of the loan: Two factors are taken in account by banks and financiers while sanctioning the amount of the loan. The first is that you can get an amount depending upon the security that you deposit in the form of gold. Gold in coins, bars and biscuits is preferred over jewellery, since the value of the latter can be diminished owing to making charges. Typically, you can get a loan for 60% of the value of your gold, after valuation. The second factor is the individual’s repayment capacity as banks need to access how long it would take for you to return the bank’s money.

Documentation and charges: You can either procure a gold loan online, or visit the bank. Keep in mind that not all bank branches are designated to provide gold loans, so you may have to visit a specific branch. You can make your case stronger by providing all the necessary documents as listed on the loan application form. You would be asked to provide your address proof, identity proof, PAN card and photograph. Banks will charge you a fee for both, processing the loan and for valuation of gold.

Depositing gold: When you submit the application along with the specified documents, the bank will draft up an agreement stating the terms of the loan, which would include the monthly instalments, the rate of interest and the tenure of the loan. The bank will evaluate your loan and disburse it accordingly. It will also keep custody of your gold until the entire loan is repaid. Gold loans are mostly offered for a period of 12 to 18 months.

Default in loan repayment: For whatever reasons, in case a person defaults in repaying the loan against gold within the stipulated tenure, the bank can assume custody of your gold. As per the terms mentioned in the loan agreement, the bank has the rights to sell of your gold to recover its dues.

5 questions to ask before applying for a Car Loan

In the recent years, owning a car has become easy thanks to the increased purchasing power of the general public along with facilities for loans. In just a matter of minutes, a bank can approve your car loan. But before you finalize a car model, and visit the dealer, you must spend some time analysing figures and asking the right questions. A little research can help you determine what exactly you would be paying for the car. Here are five important questions to ponder on before you bring that dream car home.

What interest rate will I be charged?

The first thing you need to get acquainted with is the interest rate charged by your bank for the loan. Several banks like Axis Bank, HDFC bank, ICICI bank and others, offer car loans at low rates of interest. If you already have an existing relationship with the bank; that is you have an account with the bank and/or have paid off any other loans taken in the past, you can avail a loan at a relatively lower rate of interest. Ideally, you can get a loan for cars for anywhere from 8.5% to 12.5% per annum. 

How much amount will my bank finance?

The smart thing to do is to pay 20% of the total price of the car as down payment and get a loan for the remaining 80% amount from the bank. Several banks also offer 100% finance but following the 20% rule helps reduce the loan amount, while you can fall back on 20% of your income easily to pay the EMIs. High monthly EMIs can strain your finances.
What will be the final price I must pay for the car?
While you can procure an auto loan for a low rate of interest, you may end up paying heavy fees for processing, documentation, foreclosure, default payments, later charges and even pre-payment, thus increasing the final price you pay for the car. You must check all aspects of the final amount including principal loan amount and tenure in order to get the lowest rate of interest.

What is the ideal tenure of the loan and how much should my EMIs be?

The first thing you need to understand is that such loans last longer, which I why you must have a regular source of income to pay the EMIs. Planning your finances smartly is essential. Try avoiding higher amounts of EMIs, just to procure low interest rates. Also try and avoid opting for the longest tenure because it only increases the interest payable on the actual loan amount. Instead choose a balanced EMI with a sensible tenure.

What fees are included in my loan?

Besides the interest, you must pay several fees against your car loan, which you should get clarity on while getting your loan sanctioned and while paying the debt off. You will ideally pay for documentation, credit reports, registration certificate, stamp duty, part pre-payment and several other charges. Comparing additional fees and charges of different banks is important before choosing the lender.