Prepaid cards – Its types and benefits

Prepaid cards are cards that are pre-loaded with a particular sum. They ensure there is no hassle of carrying cash. These cards are popularly given to employees by companies to track their spends. Prepaid cards leave a trail of where the money was spent and also offer all the features of standard debit and credit cards.

Types of Prepaid cards:

1. Multicurrency Foreign Exchange Card:
A multicurrency foreign exchange card or forex card is a prepaid debit card. An amount is loaded on it, and whenever it is swiped, it works exactly like a debit card. It is possible to withdraw from an ATM using this prepaid card  and also swipe it at the point of sale machines. 

2. Gift Card:
These cards are used to gift people. They can be loaded up to a particular amount and then work just like a prepaid debit card. The gift card can be for a specific brand, or   a gift card containing cash for the person to use as he pleases. 

3. Food/Meal Voucher Card:
These meal cards have come to replace the traditional paper vouchers given out every month as food coupons. Having a meal card eliminates duplication and the effort to reconcile and collect reports. These prepaid cards efficiently provide   a list of transactions.

4. Corporate card for employees:
This prepaid card helps companies to credit reimbursements, allowances (for example fuel allowance) and other small expenses. Giving them out in the form of prepaid cards ensures there is a paper trail.

5. Travel allowance card:
For employees travelling for office related work, a prepaid debit card is the best option. This ensures there is a track on the amount the employee is spending and if additional funds are needed, they can be merely  be loaded to the card. 

6. Toll cards:
Toll cards are prepaid cards that help to minimise the time taken to cross a toll plaza. Banks offer them in partnership with the NPCI.  This card gets scanned, and the toll is deducted automatically.  

7. Medical benefit card:
These prepaid cards are designed explicitly for corporates to give medical reimbursements to their employees.   


Benefits of Prepaid cards:

1. Safe and secure:
Prepaid cards are inherently safe to use. It eliminates the need to carry cash. In case of theft, it can be easily blocked without causing much loss.

2. Paper trail:
Prepaid cards maintain an exhaustive report of transactions. It is easy to see where the money has been spent. It eliminates the need for supporting documents.

3. Chip-based security:
Most prepaid cards issued now have chip-based security. These encrypted technologies make it more secure.

4. Convenient to use:
They are also comfortable to swipe and use.

5 points to remember before applying for a personal loan

The requirement for funds can come up anytime, and getting a traditional loan can be time-consuming and cumbersome. That's why there are personal loans, which you can fall back on when you need funds. Today, it is straightforward to    apply for personal loan online. With speedy approvals and quick disbursement of funds, a personal loan is one of the best ways to get access to funds.  

What is a personal loan?

A personal loan is an unsecured loan. This means if you apply for personal loan, you do not have to mortgage any particular asset. Getting an online personal loan through various lenders is easy. Private loans do not have any restrictions on end use, which means the funds can be used for business expenses or personal expenses, or both. This makes a personal loan a very flexible loan instrument to raise funds.                  

Following are the five   points to remember before you   apply for a personal loan :  

1. Credit Score:
Personal loans are based on your credit score. If you want to   apply for a personal loan, it is recommended to call the lenders and find out rates. If you keep sending loan applications, the lenders request for your credit score, and such repeated requests for credit score adversely impact it. The higher your credit score, the better the chances of getting an  online personal loan.    

2. Personal finances or Repayment capacity:
Check your finances prior to applying for a personal loan. In case you are not able to repay a personal loan, it impacts your credit score. If you already have multiple EMIs currently going on, it is better to postpone the decision to    apply for a personal loan .     

If your finances are in place and can repay the loans on time, it is better to take a personal loan that serves your need. If you apply for a higher loan amount than what you need, it may cause problems while repayment, especially in case of emergencies.            

3. The rate of Interest and Loan Tenure: 
Different lenders have varying rates of interest on personal loans. If you possess good credit score and robust repayment capability, you can negotiate with the lender on these       parameters.       

4. Prepayment charges:
When you acquire a personal loan, check the prepayment and foreclosure charges. Every lender has these charges. That’s why, if you are planning to prepay your online personal loan, it is better to check these charges.

5. Check eligibility:
Each lender has different eligibility criteria with regards to minimum income, assets owned, whether a person is salaried or self-employed. These factors determine the loan amount sanctioned, interest rate and tenure. Before applying, check your eligibility and EMI through calculators.

Guide to get health insurance for women

Getting  health insurance is of critical importance in these times. Medical treatment costs are shooting up day by day. Getting quality treatment in any hospital can dent savings. A good health insurance plan ensures adequate and exhaustive coverage against different types of illnesses. Most of the plans also include some form of critical illness coverage. 

Women have health problems that are different from men. Women are more susceptible to different types of cancers, such as breast cancer, cervical cancer, uterine cancer etc. Women can also have other problems such as endometriosis, and other uterine problems, which require surgery. They are more susceptible to arthritis and have a risk of medical problems and complications during pregnancy.

As such, women need to buy health insurance that covers problems specific to women. What happens is, most women get covered under family floater policies, and those policies may not have specific coverage for health problems that women face. As a result, when it comes to claiming under the  health insurance plan, the medical treatment costs are disallowed.

Many insurance companies are now coming out with specific health insurance plans for women. These focus on giving proper coverage to medical costs related to women. Statistically, women live longer than men, and for most insurance companies, the premium for a woman is less than the premium on a similar policy for a man.

Here is a guide to get health insurance for women:

To get a comprehensive health insurance plan for women, it should take care of the following points:

1. The health insurance should cover critical illnesses as are included in a standard health insurance   policy.

2. It should cover specific cancers that women are diagnosed with,  i.e. breast cancer, cervical cancer, vaginal cancer, uterine cancer, ovarian cancer, fallopian tubes cancer.

3. It should cover maternity costs. Most families plan to have a child after marriage. Maternity costs are a significant expense that a family has to bear. A woman's health insurance policy should cover maternity costs, i.e  . hospitalisation costs, and expenses in case of emergencies during pregnancy.        

4. Ensure the coverage is adequate. Medical costs in case of hospitalisation can quickly go up to INR 5 lakh for treatment from a reputed private hospital. While buying a     health insurance policy, it is better to buy a plan which will provide adequate health cover even after 10-15 years of the plan.  
       
5. The health insurance plan should also cover daycare costs, for procedures that do not require hospitalisation  

6. Some health insurance plans also provide for free health check-ups. These health check-ups are exhaustive. It is beneficial and cost effective to pick a   health insurance plan that includes a comprehensive checkup.  

Recurring deposit and its benefits

A Recurring Deposit (RD) is one of the type of deposits where a fixed amount is invested every month for a   pre-decided period. The interest on the deposit is calculated monthly. If you invest in a recurring deposit, you can take advantage of the compounding effect. A recurring deposit is like a fixed deposit, where the same principle is spent every month. Each deposit plus the interest matures at the same time.        

The minimum tenure for a Recurring Deposit is 6 months. The maximum mandate is 10 years. The tenure increases in multiples of 3 months so that a   Recurring Deposit account can be opened for 6 months, 9 months, 12 months and so on till 10 years.  

The minimum investment amount starts from as low as INR 100 per month. The maximum investment goes up to INR 14,99,900 per month. You can open an RD with whatever amount you want to invest with, as long as it is within the investment limits.

An RD has other standard features of fixed deposit, such as nomination facility, renewal facility etc. You can also avail a loan against a recurring deposit.  Like a fixed deposit,  a recurring deposit account can be opened by resident individuals, Hindu undivided families (HUF), companies, trusts and societies. 

The benefits of a recurring deposit are:

1. Encourages monthly saving habit:
In a Recurring Deposit account, you invest a fixed sum regularly for a predefined number of months. This puts a commitment to your finances and encourages a minimum amount of savings for the month. For small investors, or people who don't have too many savings, investing in an RD account is beneficial since they can put in amounts regularly as compared to a lump sum amount at one time.   

2. The benefit of compounding: 
A Recurring Deposit earns interest on each installment. The interest is also added to the principal amount and earns additional interest in the following months. Thus, the account is a great way to take benefit of compounding.

3. No TDS if interest is under Rs. 10,000:
Interest on Recurring Deposit account is subject to TDS rules. But to ensure this does not hit small investors, the limit for TDS is set to INR 10,000. This will ensure that people who invest small amounts do not get hit unnecessarily by a tax that they are not liable to pay anyway.  

4. Low minimum contribution:
The Recurring Deposit is meant for people who have small monthly savings. Since the minimum monthly contribution amount is set as low as Rs. 100, it is possible for people of all sections of the society to invest in a recurring deposit account and build savings.

Demat account: How do you apply for one?

Are you thinking of investing in the stock market? Or maybe park some funds in mutual funds? Some of the requirements for investing, such as a functioning bank account, PAN card, are common among investors. But you need one more thing to ensure your investment transactions go through safely: a Demat account.

What is a Demat account?

The shares that are traded on the stock exchanges are in electronic form. This means that, unlike earlier times, when companies used to hand out share certificates for share purchases, all your purchases will now be online. The account to consolidate your investments is called a Demat account.

The word Demat stands for a dematerialised account. Dematerialization is the process to convert physical shares into electronic form. Most of the companies have now wholly converted their physical shares into electronic form, which makes it convenient to trade. 

A bank account and a Demat account share similar concepts. It keeps track of the instruments purchased and sold. You can get a balance statement, which shows the shares, mutual funds, and other devices you own as on a particular date. This makes it very convenient to keep records and to access them at any time. 

How to apply for a Demat account?

It is possible to open a Demat account both online and offline. The procedure for both is almost similar. The company who you will open a Demat account with is called a depository participant (DP). In India, two depositories maintain records for the investors: National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). Each DP is affiliated with either NSDL or CDSL. 

Depending on the Demat account charges and services, you first need to select the DP you want to open an account with.

In the online application, you can apply on the DP's website, and someone from the DP will contact you to collect your documents and to sign a power of attorney (POA). A power of attorney is necessary because it allows the depository participant (DP) to make transactions in your name.

The DP will need documentation from you to fulfil Know Your Customer (KYC) norms. These documents are:

• Filled KYC application form
• PAN card of the applicants 
• Address proof for the applicants
• A recent photo along with the form
• A cancelled cheque for bank account details

Once the application form is collected and processed along with the documents, the DP will issue a Demat account number.

One important point to remember is there are Demat account charges, for account opening, purchase, sale, annual maintenance, and other costs. Reading about these charges before opening a Demat account is essential. 

What factors affect personal loan EMI calculator?

What is a personal loan?

A personal loan is an unsecured loan that can be availed to meet fund needs. A personal loan does not come with any conditions attached to it. The funds from a personal loan can be used for any purpose, i.e . business or personal.

But how can you check the installation costs that will result from a personal loan? To find out the monthly repayment burden, you can use a  personal loan EMI calculator. There are many such EMI calculators available online. A personal loan calculator is usually free of cost to use, and there is no obligation to take a loan from the company for using their loan calculator.  

How does a personal loan calculator work?

The formula for calculating EMI is:

P x R x [ (1+ R)^ N] / [ (1+ R) ^ N-1]

Where:

P= Principal or loan amount
R= Rate of Interest on loan
N=Tenure of the investment in years  

A personal loan EMI calculator does not display the formula to calculate EMI. You have to input the loan amount, the tenure in years, and the rate of interest on the loan. The calculator automatically computes the EMI and returns the answer.    

Thus, by using a personal loan calculator, you can find out the monthly payout for a personal loan within a matter of few seconds.

The EMI depends on two factors:

• Principal or Loan Amount
• The rate of interest on the loan 

These factors depend on:

• Individual need
• Credit score
• Repayment capability,  i.e. income earned by the applicant 


Principal or Loan Amount:

Most lenders give out loans up to INR 20 lakh. Some lenders even give out loans up to INR 30 lakh. The final loan amount disbursed depends on the income earning capacity. If you have a higher salary, the chances of you getting a higher loan approved are higher.    

A  personal loan EMI calculator is helpful even when you have not decided the loan amount. The calculator will show the monthly payout, and a repayment schedule, bifurcating between interest paid and principal repaid. This can help you plan the loan.     

The rate of Interest: 

The rate of interest for unsecured loans ranges from 10% to 20% depending on the lender, and the repayment capacity. If you have a greater ability to service the loan, you can negotiate with the lender for a favourable interest rate.         

The personal loan calculator will show the change in EMI depending on the change in interest rate. This is helpful while finalising the loan.   The interest component in EMI is higher in the initial months, and at the end of the period, the principal element of EMI is higher.  

Gift card – who offers them and smartest ways to use it

Gifting something as per his/her taste is the most daunting task. No, seriously. If we do not find anything suitable, we zero down on offering cash. This scenario is prevalent, especially during weddings. Again, the question arises how much of money is enough money? Thanks to the invention of gift cards, a considerable pressure is eased off from our shoulders.

What is a gift card?

The rectangular card has prefilled amount that can used at single or multi-chain stores. A gift card is available for every product from movie tickets to branded shops to travel and so on. Also, you can buy either the physical or a digital variant of the card. You can buy gift card paying via net baking, credit/debit card and cash. It is recommended to purchase gift cards with longer validity and of smaller value so that they can be used in instalments. Gift cards are usually valid anywhere between 1 to 3 years.

Who offer gift cards?

1) Single retailer gift cards: Such cards are bought at a particular branded store. For example, Shoppers Stop offers either vouchers or physical card for certain amount that cannot be redeemed against all products. Retailers provide gift cards anywhere between INR 250 to INR 50,000.

2) E-commerce gift cards: These are highly popular and almost every e-commerce portal offer gift cards, either in digital or physical form. Myntra, Amazon give away cards for special occasions such as weddings, birthdays, anniversaries, etc. Even coupon websites like Grabon and Woohoo provide e-gift voucher that are purchased extensively. E-commerce website gives e-vouchers for the range of INR 10 to INR 20,000.


3) Bank gift cards: Banks such as HDFC Bank, ICICI, etc. have their set of gift cards. A bank gift card is prepaid that comes with a PIN. For acquiring the gift card, you need not be their customer. You have to load a minimum amount of INR 50 that extends up to INR 50,000. Just like credit/debit card, you can check the balance in the card. However, you cannot withdraw money. They come with a restriction: you can use the gift card only at Visa, and MasterCard enabled outlets.

Smart ways to use a gift card:

1) Spend sooner than later: What if the store shuts down due to uncalled circumstance? Or the retail shop is going under loss? It is advisable to use the gift card as soon as possible.

2) Can regift/resell the card: If you feel the gift card is of no use or there are stores around your area, you can get rid of it by reselling/regifting. Sites like cardpool.com and so on allow users to resell their gift cards online.


3) Do not overspend/underspend: Just because you have gift card that has balance of INR 30,000 does not mean you purchase items that hold no value to you on a day-to-day basis. Best way is to plan what you require and approach retail shops when they have promotions/sales running.

You do not have to go through the question ‘what kind of gift I present him/her?’ anymore. Go to any e-commerce website or retail shop or bank and buy gift cards for your near and dear ones today!