NRI account types and its features explained!

An NRI account is the type of bank account meant for Non-Residential Indians i.e. Indians residing abroad. Most banks in India offer their customers NRI banking services. If you have an NRI account, you can deposit your hard-earned money and save it for future.

There are three types of NRI bank account. They are-

• NRE Savings Fixed Deposit Account
• NRO Savings Fixed Deposit Account
• FCNR Savings Fixed Deposit Account

Let us have a quick look at each type of NRI bank account and their exclusive features.

1. NRE Savings Fixed Deposit Account
With an NRE (Non-Resident External Rupee) account, the account holder can open a simple savings account but the balance will be maintained in the Indian currency only. Even if you make a deposit in another currency, it would be converted into Indian Rupee, before being deposited.

Features-
• You can withdraw money in the foreign currency, but first, you would need to convert the Indian Rupee into your preferred currency. The account holder has to bear the cost of the same.
• You can open a joint account with a fellow NRI, but not with an Indian resident. Nevertheless, you are allowed to transfer money to an Indian account with ease.
• You can send the entire amount in your account out of the country without the clearance from the Reserve Bank of India
• The deposits made as well as the interest earned in an NRE account is free from any income tax under the Govt. of India. However, the benefits of tax exemptions are only applicable to individual account holders and not for Overseas Company Bodies.
• Accountholders are eligible to apply for loans against the deposits in the NRE account
• Nominations are allowed in NRE accounts

2. NRO Savings Fixed Deposit Account
An NRO (Ordinary Non-resident Account) is any normal bank account held by a Non-residential Indian.

Features-
• You can make deposits into an NRO account from overseas
• The interests earned from this type of an account are not exempted from the Income tax in India
• An NRO account is non-repatriable, meaning accountholders cannot transfer their savings from this account into a foreign account without the permission of the RBI.
• You can deposit Indian currency to an NRO account
• Nominations are not allowed in NRO accounts
• You can open a joint NRO account with any Indian resident

3. FCNR Savings Fixed Deposit Account
FCNR (Foreign Currency Non-Resident) account is only useful for keeping fixed deposits for a certain period, ranging from one to three years.

Features-
• You can deposit amount as fixed deposit for at least one year and up to a maximum of three years
• You can transfer the principal and interest earned to an account overseas in the same currency or you can convert it to any other currency
• The interests earned on the fixed deposit amount are liable to tax exemptions under the Income Tax Law in India
• Nomination facility is available with an FCNR account
• You can get an overdraft on your current account or savings to account against the FCNR fixed deposit
• You cannot hold joint accounts with an Indian resident

If you are looking forward to opening an NRI account in India, make sure that you understand the features of each of these three accounts and choose one according to your needs.

Atal Pension Yojana- All you need to know

What is the Atal Pension Yojana Scheme?

The Government of India launched the Atal Pension Yojana Scheme in 2015, to inculcate the habit of saving amongst daily wage workers. According to this scheme, they can save a considerable amount of money for their pension once they retire. Not just daily wage workers, people who have private sector jobs can also enjoy this scheme’s benefits.

What is the eligibility for applying for the Atal Pension Yojana Scheme?

If you are looking to invest in the Atal Pension Yojana Scheme, then you will have to fulfil the required eligibility criteria-

• The applicant must have a valid and registered mobile number
• The applicant must be aged between 18 years to 40 years
• Applicants, who have a valid and fully functional savings account, can only qualify for an APY account

What are the features of Atal Pension Scheme?

Before you apply for an APY account, read on to know the several features of the scheme.

• Customer contribution- If you start contributing from the age of 18 years, then you will have to pay 42 INR every month to score a pension of 1000 INR. You can also go for the auto-debit option. In case, you decline to make a payment then you can re-enter the scheme by paying the due principal amount and interest rate.

• Contribution by the government- In order to drive more people to invest in the Atal Pension Yojana, the government also contributed for the duration of 5 years i.e. from 2015 to 2020. All the contributions are to be sent to the accounts activated between June 1, 2015, to December 31, 2015. All the active customers must keep in mind that they will not be covered under the Statutory Social Security Schemes.


Additionally, they should not be income taxpayers. If you are looking to secure the government’s investment, then you will need to invest regularly and on a monthly basis during the entire course of a year. If you are successful in doing this, then the Government of India will invest 50% of their monthly contribution in your account.

•Subscriber enrolment- If you have a functional and valid bank account, then you can use the auto-debit service for making payments to your APY account on a monthly, quarterly and half-yearly basis. However, keep in mind that you will have to make all your payments on time; otherwise, you will have to pay penalties. Additionally, in case you do not make any monthly investments, then the government will discontinue your account. In addition, all the money that the government provided you will be subject to penalties.

The Atal Pension Yojana Scheme is considered a godsend for many. This step by the government has been received with a lot of support and encouragement. Moreover, it is highly responsible for ensuring monetary stability for the post-retirement lives of wageworkers. 

Sukanya Samriddhi Account V/s Public Provident Fund: the difference

When it comes to ensuring your family’s financial security, often people get confused as to whether they should save their hard-earned money in a bank or invest it in a scheme. In recent times, two of the most popular financial tools in India are the Sukanya Samriddhi scheme and the Public Provident Fund.

Here is a look at the schemes, their benefits and how they differ from each other so that you can make the most of your wealth!

What is Sukanya Samriddhi Account Scheme?

The Sukanya Samriddhi account scheme is a Govt. aided scheme that aims towards securing the girl child’s future by providing education to them.

You can open a Sukanya Samriddhi account in one of the authorized commercial bank branches or in a post office. People, who belong to the lower-income wage group are also eligible to open an account for the Sukanya Samriddhi scheme, as this is a government-backed scheme and will ensure many benefits for the girl child.

What is Public Provident Fund Scheme?

The Ministry of Finance introduced the Public Provident Fund (PPF) Scheme in 1968. The primary objective of the scheme was to encourage people to save more and build a retirement corpus for the golden years.

How does Sukanya Samriddhi account scheme differ from the PPF scheme?

Both the schemes differ from one another on the following grounds-

• You can expand the tenure for any number of times, each time for a 5-year long period, upon the maturity of your PPF account. You must do so within a year from the maturity date.
For Sukanya Samriddhi account, an expansion of 14 years is allowed, but only up to 7 years.

• You can deposit money in the PPF account via cheque, cash, demand draft (DD), and online funds transfer.
Sukanya Samriddhi account only accepts deposits in the form of cash, cheque and DD.

• The account in Sukanya Samriddhi scheme can be opened only under the name of the girl child. No one other than the girl child is eligible for any of the benefits of the scheme.
Any Indian resident of age 18 years and above can open a PPF account. There is no restriction on the upper age limit for opening this type of an account.

• Sukanya Samriddhi account scheme allows you to withdraw money partially. You can withdraw a small amount only after you turn 18 years old and use it to fund your education. You can withdraw 50% of your funds from the account after turning 21 years.
If you have a PPF account, you will be allowed to withdraw your fund completely on the maturity.

• The Sukanya Samriddhi scheme offers an interest rate of 8.6%, which is the highest when compared to other small savings schemes.
The interest rate earned on funds in PPF account as on October 2018 is 8.0% per annum.

Both PPF and Sukanya Smariddhi Scheme have their own advantages and disadvantages. However, it is best to analyze the intricate details of both the plans before putting your money in any of the schemes.

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.