5 advantages of having a demat account

A Demat account allows investors to hold their shares in the market in an electronic form. If you are looking forward to investing in shares, then you will have to understand the concept of demat and demat accounts. Investment in securities is considered one of the best ways to grow and increase your wealth, with just a little bit of smart effort. However, if you are still feeling unsure about opening demat trading account, read here to know the benefits of one-

• Decrease in expenses- In case of securities, your demat account will not need a stamp duty, which results in a substantial amount of cost reduction. Previously, the stamp duty was 0.5% for every stock you purchase and you would have to visit the stock exchange in order to share your transfer stamps. This made the whole process a very complicated one.  Now you can avoid this charge by having demat trading account of your own.

• Risks associated with delivery- One of the best benefits of a demat account is zero delivery risks. Since there is no paperwork involved, the risk of fake shares, theft, and wrong deliveries in the electronic trading process are eliminated. This type of a system generally credits your demat account automatically, irrespective of the type and number of shares. The same process applies to other stock transactions as well, such as stock bonuses and stock splits.


• Updates are automatic- When it comes to demat accounts updates are automatic in nature. You will not have to provide your details every time you deal with a company, despite having a common account for all your securities transactions. Your demat account will have all the relevant and necessary information related to the transaction.

• The convenience of selling shares- Earlier, you could not sell an odd number of shares. This means, you could not to sell 37 shares, as it would be a difficult and inconvenient process. You could only sell shares in even numbers such as 50, 100, 150 etc. However, this practice has been modified and you can sell as many shares as you want, even a single one.


• Provision for the nomination- Contrary to earlier practices, you can now nominate other people while opening a demat account. Earlier, when there were share certificates it was compulsory to have a joint account holder. In case you are interested, talk to your financial advisor and the depository participant regarding the procedure of adding a nominee.
The biggest reason for opening demat trading account is not to just invest money but also to make money. If you have a clear idea about the whole thing and its benefits, you will know that it is the best decision you can take when it comes to investing in shares.

4 mistakes to avoid while purchasing a gold loan

India is one of the largest importers of gold in the world. As we know, gold is used for making precious jewellery, is often kept as assets. Many people consider gold a good investment option, which they can sell off anytime they want. Gold loans, on the other hand, are one of the most popular types of loans in the market today. Purchasing a gold loan is quite convenient, as it is easily accessible. However, you must remember to avoid these five mistakes while purchasing a gold loan-

• Being unaware of the right kind of gold- People in India consider gold an important asset. Moreover, it has a lot of sentiment attached to it. That is why people are more inclined towards repaying the gold loan. This will ensure that the jewellery will stay with them always, as banks tend to use gold jewellery as collateral. You cannot give gold bars or gold bullions as collateral. The only time you can use gold coins as collateral is when the gold is 99.99% pure with weight not exceeding 50 grams.

• Avoiding LTV calculation- LTV stands for Loan to Value ratio and signifies the ratio of the loan to the net worth of an asset. Generally, creditors use this to calculate the risk factors. The more is the LTV, the more will be the risk. The creditors calculate the value of your gold and based on that, they fund a loan amount of up to 75% of the total cumulative value. For example, if the cost of your gold is Rs.5 lakhs, then you can get a loan of Rs.4 lakhs.

• Not exploring more- Before you select a gold loan make sure that you go through all the options available in the market and compare them so that you go for the one that is the right fit for you. Carry out as much research as you can regarding gold loan finance, all the financial institutions and banks, and then shortlist a few potential options. In case you have a few doubts, you can also consult your financial advisor. Most importantly, remember to choose a gold loan option that will offer you a higher Loan to Value ratio or a lower interest rate.

• Failing to verify your creditor’s credibility- Since a gold loan is a secured form of a loan, you will have to protect it with collateral (for which gold is used generally). Your collateral stays with your lender or creditor until you pay off the loan. In case you default, your creditor will use your collateral to regain a part or the entire amount, owed by you. This might be a great way to secure the creditor’s money but ensure that your creditor is a genuine person so that you collateral remain in safe hands. Do some thorough researches before you trust someone, as it is your hard-earned money is on the line.

These days, there is a loan for almost everything, which makes it convenient for us to fulfil our needs and requirements. In addition, gold, being a precious metal is something that is revered and sought after by the whole country.

Steps for opening a PPF account

The Public Provident Fund scheme is immensely popular among financial advisors and investors due to its flexibility. Additionally, having a PPF account can also help you save a lot of tax, thus making it a very profitable option for many. However, in order to apply for a PPF account, you must have a very good idea about the whole process and its benefits. This will help you take the right steps while you work towards opening your own PPF account.

Steps to take for opening a Public Provident Fund account

Before you choose to open a PPF account, keep the following steps in mind:

• Step 1- A Public Provident Fund account cannot be opened at any random bank branch. You can open your account only at designated bank branches. You can access a list of all the designated bank branches on the bank’s official website.

• Step 2- In order to open a PPF account, you will have to submit the following documents:


1. Identity proof such as PAN card, Voter ID card, Drivers’ license or passport
2. Two recent passport size photographs
3. Account opening form, which will be available in your preferred bank branch
4. Address proof such as Ration card, Electricity bill or Telephone bill
5. Pay-in-slip, which can be accessed from your preferred bank branch. The pay-in-slip is necessary for transferring the money to your PPF account.

While submitting documents for opening a PPF account, remember to submit original documents to your bank for verification. Make sure that all the documents are self-attested. Once you get the green light for opening your account, you will be provided with a passbook, where all your financial transactions will be updated. Your passbook is an important document, as it will be required for claiming tax exemptions under Section 80C of The Income Tax Act.

Benefits of having a Public Provident Fund

There are numerous benefits of having a PPF account. It can help make your decision a little bit easier, in case you are wondering whether you should go for one or not. The benefits of the PPF scheme are as follows:

• Tax exemptions
• Provision of extending your account after maturity
• Compound interest
• Partial withdrawals
• You can invest as low as INR 600
• Several ways for depositing money
• Trustworthy and secure, since it is a government scheme
• Lucrative for marriages, education, retirement amongst other reasons
• Helpful for long-term investments
• Easily accessible, as the facility for opening a PPF account can be found at multiple places across the country
• The policy amount you choose can never be available for the creditors and cannot be added to any court order
• Almost all the banks in the country offer this scheme, making it very easy to open an account

Going for the PPF scheme is one of the best financial decisions you can take for yourself. Moreover, the whole procedure is a very easy and uncomplicated one. So, go ahead and open an account now.

Everything you need to know about education loans

Education loans are one of the most popular types of loan in India. With the education scenario a bit dicey, many children are not allowed to pursue higher education because of their families’ poor financial background. In such cases, taking an education loan is the best way of ensuring that you get to study as far as you want. Read on know everything about the various aspects of education loans in India.

Why should you go for an education loan?

There are a couple of reasons, why you should opt for an education loan:

• Specialized help- When you choose to go for an education course, you do not just have to pay for your classes but also for other expenses that are necessary. Some of the extra expenses include library fees, caution money, laboratory fees, building deposits etc. Sometimes these expenses can prove very expensive for you. However, if you take an education loan then that will help you cover all these expenses without any fear of running out of money.

• Education can be a pricey affair- If you are considering going to one of the best colleges or universities in the country, then you will have to shell out a substantial amount of money for that. Instead of emptying your bank account altogether, it is a more practical option to go for an education loan, which you can pay for later once you get a stable job.

• Convenient- An education loan in India is one of the easiest loans to get and every bank offers one. It is because of its easy accessibility that RBI considers them as part of the priority sector lending of banks. The only thing you need to do, in order to get an education loan is to fill out a few documents and prove to the bank that you will be able to pay off the loan later.

Benefits of getting an education loan
Just like every other loan, education loans also serve many benefits such as the following:

• Easy repayment- Compared to other loans, the repayment of an education loan is much easier. This is because you will have to pay the loan on a monthly basis once you get a stable job and not necessarily before that. Moreover, certain banks also provide a considerable amount of time to pay up even after your college or university education is complete.

• Tax exemptions- By taking an education loan in India, you can be eligible for tax exemptions. This is a convenient way for both students and parents to save money, which then they can utilize for something else.


• Low-interest rates- Education loans have considerably low rates of interest, which is one of the major reasons for its popularity. Moreover, the Govt. works towards the betterment of higher education in the country by providing subsidies.

• Higher education- Higher education is something that many students dream of but fail to pursue due to lack of funds. Since higher studies can be quite expensive, taking an education loan will help you cover all the expenses and you will not have to compromise on your education.


• Helps inculcate responsibility- By taking an education loan at a young age you tend to become more responsible for your studies, finance and everything in general. This is because you know that without a sense of responsibility, you will not be able to repay your loan.

Education is an integral part of life. Education is all-important if you are looking to make something out of your life, and nothing should stand in the way of that, least of all money. Hence, get an education loan and work towards fulfilling all your dreams.

4 things to know about credit cards

Shopping with a credit card can be a delightful affair, as you can buy whatever you want, no matter the cost. However, credit cards can also be a double-edged sword as they can make you overspend and then a few days later, you will be stuck paying your credit card bills. That is why you should be aware of a couple of things before getting a credit card. They are as follows:

1. Difference between secured and unsecured credit cards- Two types of credit cards are there- unsecured and secured. If you choose to go for a secured credit card, then you will have to pay a certain amount of money as a deposit, which will act as caution money, in case you fail to pay your credit card bill. If you ensure that you will pay all your bills on time, then the company will provide you with a secured credit card and return to you, your deposit money.

Unsecured credit cards, on the other hand, are the most commonly used ones. They are not secured by collateral such as auto loans or mortgages. This means, they are not directly related to property, which the lender can seize if you fail to pay the credit card bills.

2. Rewards program- Before you apply for a credit card, make sure that you go through their rewards program thoroughly. Every credit card company offers various rewards, every time you use your credit card. From offering cash back when you purchase flight tickets to providing gifts after you accumulate certain points, buying a credit card can be quite a lucrative option for you. Hence, go through their rewards program before zeroing on a credit card.

3. Credit limit- Credit limit is the maximum amount of money that your bank will provide in your credit card. In case you cross that limit, you will not be able to purchase anything further with your credit card. However, if you are buying a credit card for the first time then your credit limit will be quite low, as you still have not proven yourself to the bank about your ability to pay the bills.


4. Consequences of not paying bills- If you fail to pay your credit card bills on time, then you will have to pay a lot more interest than usual as a kind of penalty charge. Another thing that you should keep in mind is that this will affect your credit score. Having an unimpressive credit score can spell trouble for you as it may harm your chances of getting other credit cards in the future and affect your mortgages.
Before you apply for a credit card, doing proper research about it can help you understand everything that is essential so that you can take an informed decision. After all, purchasing a credit card is a kind of investment you are going for.

5 benefits of using a debit card

Almost everyone you come across these days has a debit card in their wallet and rightfully so. More and more people are using debit cards these days because of how convenient they are and how easy it is to carry them. Listed below are five benefits of using a debit card, which you must read if you are planning to get one:

1. Peace of mind- When you own a debit card, you do not have to carry a lot of cash for making financial transactions. You can just swipe your card. Even if you are robbed by anyone, the robber will not be able to use the debit card without your ATM pin. You can also call up your bank’s customer care service and ask them to block your card in order to prevent further misuse. Hence, having a debit card ensures your peace of mind.

2. No need for applications- If you want to get a credit card, you will have to apply for it. You also have to make sure that you have a very impressive credit score. If your credit score is low, then you will not be given a credit card from the bank. However, when it comes to debit cards, no kind of application is necessary nor do you have to maintain any credit score.


3. Debt-free- If you have a credit card, you might have the tendency to buy whatever you want and whenever you want. This can result in you having massive credit card bills. However, if you own a debit card, you can spend only a limited amount depending on your debit card balance and not a dime more than that. This will help you save money and make sure that you remain debt-free.

4. Fees- Debit cards do not normally charge any sort of fees as credit cards do. Hence, by using a debit card, you can avoid paying fees such as annual fees, late fees, and interest rates.


5. Convenient than writing checks- Writing checks for monetary transactions is considered an old-fashioned and cumbersome thing now. Debit cards are mostly used these days for making transactions, as these do not take much time and are comparatively easier. Most people these days refuse to take checks as they would have to go to the bank and deposit it and it will take a considerable amount of time for the money to reflect in their bank account. That is why they prefer the usage of a debit card as they can get the money as soon as you swipe it.

Even though credit cards do serve many benefits, debit cards are a more economical option when you think about it in the long-term. Debit cards can help you stay away from debt and remain stress-free about it.

6 things to consider before taking a personal loan

Personal loans are one of the most popular kinds of loans in the market currently. It comes to your aid when you face a financial crisis, and so you must know about all the important aspects of a personal loan before you choose to buy one. Listed below are some of the things you should consider before selecting a personal loan:

1. The motive for taking the personal loan- Before taking a personal loan, you must understand why you need the loan as in, what is your intention. This is because personal loans are offered for genuine requirements such as hospitalization, marriage or education. However, if you are planning to take a personal loan because you want to invest it in shares and stocks with the motive of getting higher monetary returns, then it is strongly discouraged.

2. Penalty charges- You must know that, if you forget to pay your personal loan on time then you will have to incur a huge penalty charge. Talk to your bank manager or loan provider about this and get to know everything about the penalty cause, so that you know what you are getting into. Ensuring that your personal loan is an affordable one is of utmost importance.


3. The rate of interest- Since you do not have to maintain any asset as collateral when it comes to personal loans, the rate of interest turns out to be very high. This is one of the biggest reasons why personal loans are tougher to acquire than any other kind of loan. If you are planning to get a personal loan, you can apply either for a variable rate or for a fixed rate when it comes to choosing one.

4. Explore for the best option- Select a personal loan after substantial research, so that you end up with one that is best suited for your needs and requirements. Try to go for a loan with the lowest interest rate, so that you would have to borrow less money from your lender. In addition, choose a loan that will allow you the flexibility to pay your EMI for a longer duration.


5. Credit history- Before you decide to apply for personal loan, make sure that you have an impressive credit score, as it will determine whether you will get the loan in the first place or not. Moreover, if you have any credit card dues, then pay them off as soon as you can, as it will reflect on your credit history when your application will be processed.

6. Evaluate your ability- Getting a personal loan may seem like a convenient option sometimes. However, before actually getting one, make sure that you are able to pay it off when the time comes. If you are unable to pay off your loan on time, then you will have to pay a huge amount of money as your penalty charge and your credit score will also reflect poorly in the future. Therefore, make sure that your income is enough for you to purchase the personal loan you want.

Even though you need to keep all the above-mentioned points in mind, before you apply for personal loan, do not think that it is a huge challenge or a struggle. Keeping the above pointers in mind will just ensure that your loan is approved, and you are able to make the most of it.