Different types of credit cards in India

Credit cards can make your life very simple since you do not have to carry tons of cash with you for financial transactions. Just a single swipe of a credit card and you are done! However, before you get a credit card for yourself, make sure that you know which one is best suited for your requirements. Read on to know more about the different types of credit cards in India.

1. Gold credit cards- If you are someone who earns a lot, then going for a gold credit card from any bank is a good option. However, keep in mind that in order to get a gold card you must have a good credit score.

2. Silver credit cards- Silver credit cards are best suited for people who are salaried employees and have work experience of at least 4-5 years. It is imperative to have a good credit score in order to get a silver credit card. Generally, no interest is charged on such cards for the first 6-9 months in case of balance transfers and they have a low membership fee.


3. Credit cards for women- Some banks have introduced credit cards, exclusively for women. These credit cards mostly centre on cash back offers and shopping rewards, insurance, surcharge waivers, bonus reward points etc. Women who have these credit cards can also earn points while shopping or making purchases. A few credit cards additionally offer attractive travel benefits.

4. Classic credit cards- Classic credit cards in India are a good option for people who are looking for multiple features and benefits. Some of the features that come with classic credit cards are revolving credit, global acceptance, cash advance, rewards program, interest-free credit period, insurance, supplementary cards, and a 24-hour customer care helpdesk. Most of the classic credit cards do not have any joining fees or annual fees and are mostly provided at low finance charges.


5. Titanium credit cards- Titanium credit cards offer several benefits and privileges but the main feature of a titanium credit card is the Titanium Rewards program. This respective rewards program provides benefits such as cash back offers, accrual of reward points, revolving credit, overtax waivers, yearly fee reversals, interest-free credit period, add-on card facility, dining benefits, beauty and wellness offers, welcome gifts such as vouchers for shopping purposes, insurance, lifestyle benefits etc.

6. Balance transfer credit cards- Many banks offer the facility of transferring your balance amount on credit cards. In other words, you can transfer your bank balance from one credit card to a new one of a different bank. Most of the balance transfers do not charge any interest in the first 3 months of your repayment. However, once those 3 months are over, they start charging a considerable interest on the balance. 

Having a comprehensive idea about the different types of credit cards will make your search easier for a credit card best suited for your needs. Hence, before you buy one make sure that you do your research.

4 reasons why you should hold a home insurance policy in India

Health, life and motor insurance are the three most popular insurance products in the market today. All of the three insurances help keep you and your property safe. While life and health insurance deal with you and your family’s financial security, motor insurance provides protection for your asset.

However, you may be ignoring the protection of another vital asset in your life – your house.
Home insurance policies are extremely important, as it not only protects the structure of the house, but also the contents within it. Here is a look at the importance of home insurance plans in India.

1. Safeguard against liabilities
Your property insurance will cover you against injuries and other property damage inside the house. Furthermore, if guests or other parties suffer injuries while inside the house, you can claim help from the home insurer as well. Therefore, home insurance secures you against legal liabilities as well.

2. Protection against both natural and man-made calamities
Your house is liable to undergo damage from a number of sources. Natural disasters, such as earthquakes, floods, storms can cause excessive damage to the structure of the house. Such events can even lead to complete destruction of the property. Apart from natural calamities, man-made activities can also damage certain parts of the house. Any damage arising from theft, burglary, and riots also come under the coverage of home insurance plans.

3. Temporary living expenses cover
In case of accidental damage to your house, you will need to initiate repairs to the same. Under such a circumstance, where extensive repairs are needed, you and your family may have to arrange for alternative accommodation. Your property insurance will cover for the extra expenses that you incur while staying at hotels during such repairs at your damaged home.

4. Cover for loss of precious personal belongings
Apart from the structure of the property, the insurance also covers the assets inside the house. For instance, home insurance policy covers the important papers and jewellery, along with all other precious items.

Therefore, getting your home insured is essential if you want to protect your family and your property from unforeseen dangers lurking around every corner. The policy will ensure that the home you built remains standing at all costs.

How are demat and trading account related?

Demat account is the type of account that allows investors to deposit and hold their shares in an electronic form. Such an account transforms the physical shares into the electronic format, a process more commonly known as dematerializing.

Trading account, on the other hand, is used to sell or buy shares in the stock market. When different companies list their shares in the market, the trading account allows you to trade the same on an electronic platform.

If you are looking to invest in shares, then you must have a clear idea on the concept of trading and demat account and the relation between the two.

Features of demat account

• No charges are applicable for opening a demat account
• All the transactions are linked with AMC (Annual Maintenance Charges) from the second year onwards
• Waiver on the AMC for the first year
• No taxes are levied on documents like receipts, cheques, licenses etc. on the transfer of securities held in the demat format
• Auto credit of public issues/bonus/rights in the demat account through Electronic Clearing Service
Features of trading account
• Seamless transfer of shares and funds in the linked Savings and Demat account
• No need for bank transfer, cheques, or application forms for each transaction
• Option to invest in multiple investment schemes like Derivatives, Equity, Bonds etc. as per your need and risk appetite
• Allows you to invest at any time, from any place using the internet and mobile trading apps
• Allows you to carry out purchase and sale transaction in a seamless manner in bonds, mutual funds, and equity shares under one platform

How are the two accounts related?

Demat and trading account are closely related. Trading accounts work the same way as your current bank account, while the demat account works similar to your savings account.

Trading account links your demat account with the bank account. It withdraws your shares from the demat account and sells it in the stock market. Both the accounts are crucial if you wish to trade in the share market. As an investor, you are using the trading account to purchase the shares of a company, and you are keeping it stored in an electronic form using the demat account. In this case, the money that is debited from your bank account is credited to the demat account.

Similarly, when you are looking to sell your shares through the trading account, the money is debited from the demat account and is credited to the bank account once the shares are sold.

Therefore, in order to be able to trade in the stock market, having both demat and trading account is imperative.

How to invest in a national pension scheme? What are its types and charges?

Retirement can be a difficult time both physically and financially. With the slow deterioration of health, financial security can be attained if one is careful. A government-sanctioned pension scheme, known as the national pension scheme, is the simplest and cheapest way to ensure this financial independence post-retirement.

What is the National Pension Scheme (NPS)?

It is the least known government approved pension schemes in India. It is a specialized investment where people can deposit small sums of money over the years. The NPS would then offer a lump sum payout during the retired life of the investor. Therefore, the investor does not need to maintain other savings for his/her post-retired life.

Types of NPS

NPS is divided into two types or tiers, namely, Tier I and Tier II.

• Tier-I Account
In this type of National Pension Scheme account, the withdrawals are limited. If you are investing in the first tier of NPS, you can withdraw up to 20 per cent of the funds before reaching the age of 60. The remaining 80 per cent of the money is used for buying the annuity for you. Due to the annuity plan, you would need to pay a fixed sum of money until the scheme matures or until you pass away.

• Tier-II Account
It is a savings option where you save voluntarily. Therefore, from such an NPS account, you are free to withdraw whenever you like and as much as you like.
The charge involved with National Pension Scheme investments

• During the initial set up of the NPS account, you would need to pay the POP charges. Rs. 100 is charged as registration fee. Furthermore, 0.25 per cent of the initial investment is charged as a contribution. The minimum amount is Rs. 20 and the maximum is Rs. 25,000.

• For subsequent transactions, the subscriber pays a 0.25 per cent fee on the amount subscribed. The minimum payment is Rs. 20, while the maximum payment is Rs. 25,000.

• Any transaction that does not involve any subscriber contribution will result in a charge of Rs. 20.

Keep these factors in mind if you are planning to invest in the National Pension Scheme so that you can take advantage of the benefits from such investments post your retirement life.

What is the process of mutual fund investment? Its types and features explained

Investment is one of the simplest ways to increase wealth. However, most people are unaware of the intricacies of the markets to navigate investments profitably. Mutual funds investment is a specialized system where anyone can invest money. You do not need to have an extensive idea about the workings of the market as professional fund managers manage your investments. In exchange, you pay a minor portion of the profits you earn to these fund managers.

What are mutual funds?

Mutual funds refer to a pool of money accumulated through a number of investors. This accumulated fund is invested in various market schemes, such as debt funds, stocks and liquid assets. The profits and losses from this investment are shared equally among the group of investors. However, due to the involvement of professional fund managers, the risk of losing money is severely restricted.

Now that you know what mutual funds are, here is a look at the types of mutual funds investment you need to know about.

Types of mutual funds

1. Equity funds
In this kind of mutual funds, your money is invested directly into stocks and equities of various companies. These schemes provide high-risk high-return opportunities to investors.

2. Debt funds
Investments into company debentures, government bonds and fixed income assets are classified as debt funds. These mutual funds investment provide a limited return but are much safer than equity funds.

3. Money market funds
In these kinds of mutual funds, the money is invested in liquid assets, such as T-Bills, CPs and more. Such investments are safer and offer moderate returns. However, money market investments are best suited to people looking to invest a lump-sum amount.

4. Sector funds
Sector funds are those mutual funds investments where your money is invested in one particular sector of the market, such as infrastructure. The risk and return depend on the current performance of the sector where you have invested your money.

5. Index funds
In such an investment, your money represents a particular index on the stock exchange in a bid to determine the returns and the speed of the index.

6. Tax Saving funds
These mutual funds investments are preferred by those trying to save paying taxes on the profits earned through their investments. Generally, a large chunk of the profits are paid off as income tax, but investing in tax saving mutual funds will result in greater profits reaching your hands, as you are liable for annual tax exemptions.

If you are looking to invest in mutual funds, your choice is limited to these six types. However, seek advice from financial experts to understand, which one is the best option for your investment profile. 

What is a loan against credit card? Its advantages and top banks offering them

Emergencies are always just around the corner and you can never be truly prepared to handle them. Often, such situations will force you to spend a great deal of money. However, you may not have such huge sums lying around in your bank account. At such a time, a loan is your best option. However, most loan application processes are long and strenuous.

Therefore, you should consider a loan against credit card at such times.

What is a loan against credit cards?

If you require money and own a credit card, you can apply for a loan against the card. When you apply for such a loan, your bank will provide you with the required amount of money, which you would then repay through the credit card bills. Some people confuse loan on credit card with cash withdrawal using the card, but these two are different.

In case of cash withdrawal using the credit card, you can collect cash from a nearby ATM using your credit card. The rate of interest charged on such a withdrawal is generally high. However, in the case of loan against a credit card, the interest rates are lower. Furthermore, the money lent is generally greater than the withdrawal limit on the card.

Benefits of loan against credit card

1. The lower rate of interest than most other loans, including the interest charged on cash withdrawal
2. No document required for application of the loan. This is because, all necessary information is already in the possession of the lender, as you are using their credit card for taking the loan.
3. When you take a loan against a credit card, you get the money instantly. This feature is greatly handy for people who require the money immediately.
4. You do not need to visit the bank to apply for the loan. Instead, you can apply for the same from anywhere at any time.
5. The processing fee for such a loan is usually lower than the fee charged for the processing of other kinds of loans
6. You do not require collateral for loans against credit cards. Therefore, the procedure is simpler to handle. 

Banks offering loans against credit card in India

If you are looking for loans against your credit card in India, you have many options. You can avail such a loan if you have credit cards from HDFC Bank, Citibank, HSBC Bank and ICICI. HDFC Bank offers Insta Jumbo loans against their credit cards. If you apply for such a loan against your HDFC Bank credit card, the money lent will be credited to your account within 60 minutes. Thus, the processing of the loan is extremely fast as well.

5 reasons to choose business loan over the personal loan for your company

Starting a business can be exciting and hectic at the same time. The greatest problem is to accumulate enough funds to get the business off the grounds. While some people prefer taking a personal loan to finance their business, others opt for a business loan. However, a business loan is a better option if you are seeking money for your company.

Here is a look at why business loans are preferred over personal loans-

1. Large sums of money
If you opt for a business loan, you can apply for a greater sum from the lender. You can use this money for your business or company. At the start of the business, you need the additional money to establish good relations with your client along with the arrangement of proper space for your company. Different banks have varying maximum business loan limits, check online for more details.

2. Easy approval
While you will need to provide an outline for your business, along with extensive plans for the same, the approval process is easy to crack. If you have confidence over your own business model, you just need to convince the bank to support your vision. Most financial institutions will be eager to help you if they feel that your plan is profitable. Once approved, you will get the money within a few hours or days. You do not need to meet any special business loan eligibility for clearing the process.

3. No collateral required
For a personal loan, you would need collateral, but for business loans, no such collateral is required. This is an attractive benefit of business loans, which make the application procedure simpler and faster.

4. Affordable interest rates
Business loans are a better choice if you are trying to minimize the interest on your borrowed sum. Most business loans have a nominal rate of interest, which in turn will help you grow your business in the future.

5. Tax benefits
As per the Income Tax Act of 1961, certain business borrowers are liable for tax exemptions on the repayment of the loan amount. This is yet another way, in which business loans help new businesses to grow. The money saved on taxes can be used to improve the company.

Therefore, if you require funds for your company, it is always fruitful to take a business loan instead of a personal loan.