Here’s all you need to know about a Demat account

It is difficult to hold shares in physical form as it involves a ton of paperwork, a lengthy process and the risk of fake shares. To simplify this process of trading and investing, a Demat and trading account is essential as the stocks in this account remain in a dematerialised form. For this, a Demat account number is required as it functions like a bank account where all the money is held, and entries are made in the bank passbook as these securities are held in electronic form. The Demat account opening can be done with no balance of shares in it and with zero balance.

It is essential for those who invest in shares and keep up with the stock market to have a Demat account as this account holds all the financial instruments like shares, bonds, mutual funds, etc.

To open a Demat account in any bank, the documents required are as follows:

-    ID proof
-    PAN card
-    Proof of residence (ration card/phone bill/electricity bill)
-    Bank details (a cancelled cheque will do)
-    Two passport size photographs

In the form given by the bank, fill up all the details in the appropriate space provided and attach your documents at the end of the form. You will need to carry your original PAN card for verification purposes, along with a copy. Depending on which bank you open the account in, a basic fee is required to open the account. The fees differ with every provider, with some opening the Demat and trading account without charging any fee.

Some of the benefits of opening a Demat account are:

-    All your investments can be held in a single account as this account is not just for shares but debt instrument like bonds, too.

-    The problem of shares being transacted in lots of single or odd numbers no longer exists. Now, with the help of the Demat and trading account, this problem no longer exists.

-    Similarly, earlier, when securities had to be transferred one would incur extra costs due to stamp duty. This is not a problem anymore as the Demat account is all electronic.

-    After the Demat account opening, the risk of theft, fake shares, wrong deliveries, etc. have reduced due to the reduction in paperwork. Time taken for delivery has also decreased considerably. Once the account has been approved, the securities and company-related activities like stock bonuses and stock splits are automatically credited to your account.

- Paper made storing things more vulnerable as it was prone to wear and tear and damage. The demat and trading account makes these securities more convenient to hold and more straightforward to transfer with a nomination facility, in the unfortunate event of death.

Getting a personal loan?

Money borrowed from a bank, a non-banking financial company (NBFC), credit union or online lender and can be repaid in fixed monthly payments, is known as a personal loan. The rates of interest can differ depending on each institution. Any collaterals do not back most personal loans while a secured loan is usually supported by a house or car, which means that you will not lose the asset if you default. With a personal loan, as the name suggests, the loan amount can be used for any reason without letting the bank know what the loan is for.

Here are some things should know, before getting a personal loan:

1.    Personal Loan Eligibility

Though the eligibility criteria differ from one financial institution to another, the general criteria include age, occupation, income, capacity to repay the loan in time, residence and other essential general information. Check your personal loan eligibility with the help of the personal loan EMI calculator. To avail a personal loan, the person applying must have a regular monthly income whether salaried or self-employed. The eligibility of a loan also depends on the credit history of the person.

2.    Loan Duration

Typically, a loan can be given out for the duration of 1 – 5 years. In rare cases, the length of the tenure can be shortened or lengthened, but only with financial institutions that offer customisation.

3.    Fees and Interest Rates

The interest rates vary widely from lender to lender and make a huge difference in how much the borrower needs to pay over the life of a loan. The interest rates for personal loans usually range between 5 to 36 percent depending on the lender and credit history.

Many lenders also charge a fee to cover the cost of the loan processing, and this usually ranges from 1 to 6 percent of the loan amount.

Like how all lenders charge a fin if the loan paid past the given date, some lenders also charge a pre-payment penalty as this means that they will lose out on the interest they would have otherwise earned.

4.    Keep Your Options Open

It is a good idea to do adequate research on all potential financial institutions and compare what each one offers to see what suits you best. Make sure you have enough information on the key factors such as interest rate, loan tenure, processing fee, etc. before applying for a loan. Even when applying for a personal loan, be sure to apply to multiple institutions so you can pick as per your choice.

6 benefits of multi-currency forex cards

You have planned for your dream tour since many months. You are excited about the trip. Your family is over-joyed about going on their first international trip. Together, you’ll are ready to explore new places, culture, cuisines and share a unique experience altogether.    Yes, you have researched about the best places to visit and checked whether your flight is on time. But do you have a plan B? Do you know what to do if you or any of your family member suffers an accident or any other health scares?   

Do you have additional cash in place? These questions might be unanswered for now, but we have answers for all of them. Several banks are offering multi-currency forex card to make your task easier. This card acts just like your credit card that can be used in any MasterCard or VISA outlet abroad. You can use them during emergencies or make additional purchases.

Some primary benefits of using forex cards are:

1) If you plan to travel to many countries in one trip,  and you are carrying cash, it can get cumbersome. To make your travel hassle-free a multi-currency forex card comes handy. These cards are generally available in 22 currencies.

2) One of the primary reasons why travellers opt for a forex card is   due to the attractive rates. You can book the exchange rates well in advance and saves you from fluctuating prices in the market.   Imagine travelling to Europe, and you  have to exchange the Euro to INR rate, be ready for some mental gymnastics.        

3) Your forex cards  and bank account have no connection.They are standalone cards. A forex card works like a  debit card without even liking your account to it. There are many security measures included in the forex card such as a  chip, PIN code, and the benefit of blocking the card in case of theft.             

4) Unlike travellers’ cheques, forex cards are widely accepted. You can use your card at retail outlets, ATMs and even on e-commerce websites.  

5) Some multi-currency forex card offers concierge services. Imagine having someone take you through the immigration, baggage counter, experiencing the services chauffeur, etc. the moment you land in your destination? Perfect, right?

6) The best part about forex cards is that the left-over foreign currency can be used in any other destination. They come with a validity period of 3-5 years. You can also encash it by paying a cash-out fee.

Now that you know the benefits of a multi-currency forex card, how do you intend to spend them on your next trip abroad? 

7 financial tips every NRI should know

The moment you step out of your country, you have to find a different way to manage your funds. This mainly includes taking care of bank accounts, investments, assets, etc. Also, you have to prepare yourself, if you are sent to India due to any unforeseen circumstances. Investing in India has become simpler and hassle-free, thanks to the variety of services offered by the Indian banks.  Moreover, RBI has special investment schemes in place for NRIs. 

Apart from opening an NRI bank account, which are the other options that an NRI can look up to?

1) Open an NRE/NRO account: One of the key   options that bank officials offer is an NRI account. Under this category, you have two options to choose from NRE and NRO account. If you still have some source of income flowing in India, you can deposit them in your NRO account. Else, you can store your foreign curre ncy in India through an NRE account after converting the same in the rupee.    

2) Look out for other means of investment: The other options that you can opt for apart from an NRI bank account are real estate, the  stock market, mutual funds, fixed deposits, etc. However, there are some restrictions for NRIs from the United States of America (USA) and Canada who select the mutual funds' option.   Only a few mutual funds companies accept investments from these countries.

3) Look for Indian bank branch in the residing country:  If you are comfortable operating with an Indian bank, then research about the banks around the place you will be staying. Managing funds through an Indian bank is more comfortable   , especially if you have plans to move to India in the future.  

4) Ponder upon before going for loans: One of the biggest advantages of being an NRI is that you can take a loan from both India and overseas. Consider the best one before freezing on an option regardin g interest rates,  inflation rate, currency rate fluctuations, etc.    

5) Beware of currency fluctuations: The biggest drawback for an NRI is the currency fluctuations as that could affect his/her investment plans. A slight change in the Indian currency can impact your returns.

6) Keep yourself posted with economic conditions: If you own properties or have money in India, then be aware of the economic conditions in India. Change in taxes and economic reforms could affect your funds.

7) Buy health insurance: One of the major concerns for NRIs is health treatment. Medical expenses overseas are expensive. They often prefer to get their treatment in India. So, purchasing health insurance in India is always a welcome idea. However, do check the geographic coverage your policy has to provide. 

Which options do you find feasible? An NRI bank account or other investment options?

NRO account – all you need to know

Getting a job and settling in abroad is all fine, but how are you managing your funds or shares/securities back home? Are there enough funds to support your family financially? If you send them money, how can they deposit it? Where can they get them done?

These are some fundamental questions that arise the moment you work overseas. Now, the pressure is eased off thanks to banks offering different bank accounts for the non-resident Indians (NRIs). They have three options to choose from: NRE account, NRO account and FCNR account. While NRE and NRO accounts are rupee dominated, FCNR accounts allow only foreign currencies. Each of these accounts varies in parts. Let us learn in detail about   NRO accounts.
      
What is an NRO account?

This kind of account can be opened either by non-resident Indians (NRIs) or Person of Indian Origin (POI), except for people staying in countries like Nepal and Bhutan. You can open an NRO savings account or NRO current account or NRO recurring deposits or NRO term deposits. It is best suited for those NRIs who have existing income in India such as rent, dividends, pension, etc.

Many banks also offer debit and ATM cards for NRO accounts so that it is easier for the family members to withdraw cash from selected merchants across India.

What are the document requirements to apply for an NRO account?

1) Passport copy
2) Employment visa copy
3) Address proof
4) Age proof
5) Income proof

More information on NRO savings account:

1) If the foreign money received is convertible to Indian currency through regular banks   
2) You can also open the account if you have legitimate local dues such as dividends, rent, etc. 
3) The interest on NRO accounts varies across banks. The investor should thoroughly check the rates before approaching the banks 
4) Unlike the FCNR and NRE accounts, the interest on NRO accounts are taxable
5) Two NRIs can open an NRO joint account  unlike an NRE account   
6) An NRO account is safe from exchange rate fluctuations such as daily variations in the value of rupee as well as conversion loss
7) You can only transfer money from an NRO account to another NRO account
8) Funds originating from abroad can be deposited on the NRO and NRE accounts. However, funds available in India can be stored only in the  NRO savings account  

Managing your income is the most crucial matter as it needs to be dealt with utmost care. NRIs have surely several options, but NRO accounts offer them benefits in terms of

Top 5 mobile payment apps in India

If you have a smartphone, you do not require an alarm clock, a television, a torch, a compass, a computer, today. Nowadays, smartphones are hogging the limelight that once was ruled by debit/credit cards. Mobile transactions are on a rapid rise, especially in emerging countries like India and China. The mobile payment app category is growing fast, and users are presented with a wide variety of choices to select from.

You can now split bills, order food, book movie tickets, send and receive money, by just a click. Following are some of the apps that are reigning in the Indian market over the years:

1) Paytm: This app has risen exponentially since its launch in 2010. It is the leading mobile payment app in India. Paytm did have competitors amongst its category, but they stood out offering deals almost every day in categories such as recharge, DTH services, entertainment, etc. Today, several merchants have Paytm as a payment option.

2) Freecharge: They always come with exciting offers that make them the most likeable mobile payment app in India. Freecharge stands head-to-head with Paytm. Usually Freecharge is handy for doing mobile recharge and making online bill payments.

3) MobiKwik: They have got more than 20 million users and 60,000 merchants who have them as a payment option on their portals or app. What differentiates them from the other mobile payment app players in the same category is that they provide cash collection facility at your residence. You can also pay your electricity, gas and other utility bills through MobiKwik. They are currently expanding their merchant base rapidly.

4) PayZapp: With the help of this app, customers can make instant payment online, enjoy great deals on entertainment, send money to their friends, etc. With the HDFC PayZapp, you no more have to make card-based transactions. Some of the salient features of using PayZapp are:

- Your PayZapp is connected with your savings account. This makes it easier to transfer money
- You can avail of attractive travel deals and offers
- You can pay utility bills, purchase movie tickets, etc.
- You shop groceries online and have them delivered to your doorstep
- You can pay your cab money

5) Google wallet: It mainly helps in transferring money to anyone in the fastest and easiest fashion. You can sign up for Google wallet through your debit card or Google account. The best part about this mobile payment app is that the recipient need not have the same app.

Having a mobile payment app is now so necessary that it is equivalent to having a telephone connection. It assists you in spending less time in the long bank queues.

7 things to remember before applying for an education loan in India

With the rise in the number of  educational and professional opportunities across the globe, more and more aspirants desire to study abroad. Studying abroad comes with promises such as a high-flying career,  more income, etc. Universities in abroad offer an array of courses  and have specific programs related to the kind of education you wish to pursue. Also, many universities offer scholarships and financial aid, keeping in mind the profile of the students.

Funding a child’s education is a daunting task. It is dependent on the course that he/she wants to take up and the institution they wish to study in.  The form of tool available to make all this a reality is to avail an educational loan. Indian banks provide various schemes with flexible repayment options, moratorium period, etc. 

Following are the essential features of an    educational loan in India:  

1) You should be anywhere between 18 to 35 years to request for an education loan

2) You can obtain the credit for courses such as  management, engineering, medicine, graduate, post-graduate, architecture, arts, hotel management, etc. 

3) An educational loan covers additional expenses such as tuition and exam fees, lab and library fees, caution deposit, travel, books and equipment, projects and study tours

4) The educational loan can be paid  in monthly instalments via ECS or post-dated cheques

5) Educational loans are granted for 7 years inclusive of the moratorium period

6) Borrowers have to pay interest during the moratorium period

7) If you are applying for an educational loan for a full-time course, you have to select a co-applicant. They could be your siblings, parents, spouse or any other family member

8) You can apply for a loan amount up to INR 20 lakh with the moratorium period and maximum INR 10 lakh without the moratorium period

9) No collateral is required for loans taken up to INR 4 lakh. However, you have to give third-party security if the amount is above INR 4 lakh. You might have to produce tangible collateral if the loan is above INR 7.5 lakh  

Following are the tips you need to keep in mind before obtaining an educational loan in India:

1) Choose the right bank. Go for a bank that offers the right moratorium period, interest rate and the correct terms to pay back the amount.   Also, check if you can pay through EMIs in advance or part payments

2) Know about your course and loan thoroughly. You should be aware of the VISA costs, ticket charges, airport interviews, cost of the loan, interest rates, repayment schedule, your program, etc. Also, be aware of the family and personal details

3) Go for a balanced educational loan policy. If you choose for lengthy tenure, your EMI will inevitably reduce  , but the cost of the loan and interest rates will get higher

4) Moratorium periods are good as they ease off the pressure from your shoulder. They generally last for a year or 6 months. Interest will, however, accumulate. So, pay off the interest during this holiday period as it will lessen your burden

5) Strategise on how to repay the loan. Once you complete your studies and start earning, you can  decide on what needs your attention and let go of the unimportant  things 

6) You can avail of the tax benefits under section 80E of the Income Tax Act on your educational loan. In order to use this benefit, you should have bought the loan from an Indian scheduled bank or a gazetted financial institution

7) Banks understand if you are unable to repay the loan on time. This could be due to unemployment or any other genuine reason. It might be tough to persuade the banks initially, but you can explain to them the situation if it true. Banks in such cases might extend your moratorium period  or repayment schedule

Before taking an educational loan in India, understand its implications as well. Be ready for the best and worst.