What is a forex card?

A forex card is one of the best products available when you’re considering a tour abroad. A forex card is a full debit card cum ATM card where the card is preloaded with foreign currency. It can be used in ATMs to withdraw cash as well as swiped directly at merchants. Both these transactions will reduce the balance in the card. A forex card is a safe way for people to carry cash while travelling abroad.

Features of a forex card:

1. A forex card can be either a single currency or a multi-currency forex card. A multi-currency forex card can load several different currencies. Some of the popular currencies that banks charge on forex cards are US dollar, Euro, British Pound, Canadian dollar, Australian dollar, Japanese Yen.
2. The currency to be loaded in the forex card is usually sold by the bank itself.
3. The forex card India works like a debit card. The user has to set a PIN for the card which is then used to authenticate both merchant transactions as well as ATM withdrawals.
4. Most banks send an email confirmation of the transaction as well as the outstanding balance.
5. The card automatically switches between different currencies. The user does not have to do anything unique.
6. The foreign currency loaded in the forex card is entirely prepaid. This protects the money against any risk of foreign exchange fluctuation.
7. A forex card can be recharged or refilled using net banking conveniently.
8. Most banks provide a backup forex card in case the primary card is stolen or lost. This feature ensures the forex cardholder is not left stranded in case of theft or loss of card.
9. Banks provide other value-added services at a discount to forex card holders.

How to buy forex card?

A forex card can be purchased over the counter in any bank branch. It can also be applied for online on the bank’s website. However, the account holder must have enough cash in his account to cover the cost of the foreign exchange to be purchased.

Apart from that, forex card India can be purchased online. There are different websites which provide forex cards and foreign exchange from different banks. It is best to check the rates of foreign exchange provided by these different aggregators and pick the one that offers the foreign exchange at the best possible prices. 

Types of forex cards:

• Single currency card
• Multi-currency card
• Hajj Umrah card
• ISIC Student card

What is an education loan?

Education at all levels has become quite a costly affair in India. Whether it is studying for a postgraduate degree or meeting the cost of expensive courses, good quality education has seen spiralling costs. While saving prudently for education is one of the ways to ensure you can afford a good quality education, another way of enrolling yourself for your dream course is to take an education loan.

What is an education loan?

An education loan is a loan that meets the cost of education. The student is the primary applicant of the student loan. The parent or the spouse of the student is the co-applicant in most cases. Most banks give out these type of education loans:

• Education loan for Indian education:
This loan is given for education from primary to post-graduate studies in any educational institution in India. The loan amount that the bank grants will vary from bank to bank. The loan amount depends on the cost of the course. Some banks may also consider the cost of accommodation, examination fees, and other course-related expenses as well. Loans up to a particular amount (usually Rs. 5 lakhs) are given without any collateral.

• Central Government Interest Subsidy Scheme:
The Central Government has given an interest subsidy on education loans to students whose parents do not have an income above Rs. 4.5 lakhs. However, the courses that get this benefit are restricted. To get a benefit under this section, you need to provide a certificate from the State Government that proves your income levels.

• Education loan for foreign education:
This loan is given out to students who are looking at studying abroad. The bank may finance either the whole course fee or part of the course fee.

An education loan is also called a student loan.  Student loans usually do not start with repayment immediately after disbursement. These loans begin repayment a few months after the completion of the course. This period is known as loan moratorium.

One of the advantages of taking an education loan is that there is a deduction available under the Income Tax Act. As per the Income Tax Act of 1961, interest on loan taken for education is allowed as a deduction. There are no restrictions on the amount of deduction that you can claim. It can only be claimed by the person paying interest for himself, spouse, or children up to 8 years.

To avail of the education loan, the student needs to be enrolled, i.e. accepted into the course. The acceptance letter is an important document that banks require. Banks also insist on collaterals for the loan. Generally, the collateral for a loan for foreign education is higher, since the loan amount is high.

A study loan is one of the best options to fund higher education, especially for education abroad.

Fixed Deposit: Top 5 reasons to open a fixed deposit now

For most people, when it comes to safe investment avenues, a fixed deposit is one of the most popular investment options. Many senior citizens and retirees open fixed deposits to ensure a regular inflow of cash from their retirement monies.

A fixed deposit is a type of deposit where the funds are locked in for a particular period. The fixed deposit interest rates vary on the basis of the period of the deposit. The bank regularly revises FD interest rates depending on economic conditions. The rate of interest on FDs is not as high as other investments, but it has certain benefits, which make it an attractive investment alternative.

Here are the top 5 reasons to open a fixed deposit now:

1. Convenience:
Opening a fixed deposit is no more a tedious procedure which requires you to visit the bank physically. Using net banking, you can open a fixed deposit of your desired duration in a matter of minutes. FDs can also be opened using mobile banking.

It is not only convenient to open a fixed deposit, but it is also equally simple to liquidate a fixed deposit. Both net banking and mobile banking allow a customer to settle a fixed deposit.

2. Tax saving:
Investment in 5-year tax saving fixed deposits gets a deduction up to Rs. 1,50,000, under Section 80C of the Income Tax Act, 1961. However, you need to pay tax on the interest earned from such a fixed deposit.

The interest on fixed deposits attracts TDS, however, banks will not deduct TDS unless it crosses Rs. 10,000. This provides relief to small investors.

3. Insurance up to Rs. 1 lakh:
Fixed deposits are generally safe investments. However, each fixed deposit is usually insured up to Rs. 1 lakh by the DICGC (Deposit Insurance Credit Guarantee Corporation of India). To take the maximum benefit of this provision, you can split up your deposits to ensure they get covered by this protection.

4. Flexible investments:
Fixed deposits are flexible investments in the sense the minimum amount to invest is Rs. 500 but there is no cap on the maximum amount. This makes it possible for a person to open small fixed deposits with their savings.

5. Senior citizen concessions:
Senior citizens get special concessions when they open fixed deposits. Generally, senior citizens get higher FD rates as compared to other depositors. Also, under Section 80TTB of the Income Tax Act, savings and fixed deposit interest up to Rs. 50,000 is deductible from the total income of the senior citizen. This gives them higher income.

What are the benefits of current account?

A current account is a type of bank account with unique facilities. These types of accounts are preferred by businesses, companies, public enterprises, educational institutions because they have a higher volume of low-value transactions.

Almost all commercial banks offer a current account, i.e. both scheduled and non-scheduled commercial banks. One of the main features of a current account is that it does not earn any interest on its balance.

Benefits of a current account:

1. Liquidity:
One of the best features of a current account is that it provides complete and unrestricted liquidity to the customer. Unlike a savings account, there are no restrictions on daily withdrawals or deposits of cash. Unlimited free deposits are allowed up to a particular limit. There are no limits on withdrawals of funds. This provides a lot of liquidity for businesses to manage their operations.

2. Easy account opening:
Opening a current account is very simple, especially since several lenders have the current account opening formalities entirely online. You have to fill up a form, and the customer representatives from the bank will contact you for further formalities to open a current account.

3. Overdraft facility:
One of the benefits of getting a current account is that the business can get an overdraft facility where funds are borrowed at a cheaper rate of interest as compared to a regular loan. These funds can be repaid by depositing cash into the account. An overdraft is the easiest way of infusing funds into the business.

4. Net and Mobile Banking:
Most banks extend mobile and internet banking to current account holders. A current online account makes it easy to check balances, make transfers, and have a check on the account.

5. Multi-city banking:
A current account provides a business with multi-city operations. It is possible to deposit funds from all over the country which is very useful for businesses spread geographically.

6. Other value-added services to business owners:
With the competition among banks, business owners can get a whole range of different value added services such as:

• Higher free withdrawal and deposit limits
• Cheque collection facilities
• Monthly account statements
• Relationship managers
• Discounts on other services

These value-added services help a business to save costs and expand.

7. Bank guarantees:
Having a current account with a healthy balance can help a business get a bank guarantee which is useful for companies looking to get into foreign trade.

What is a Demat account?

Investing in the stock market is one of the best ways of growing your capital. The stock market is an essential tool to increase your money in the long term. It is also possible to make a sizeable earning by trading in the stock market. However, to invest or trade in the stock market, you need a Demat account.

What is a Demat account?

A Demat account is an electronic repository of financial instruments. Instead of holding physical copies of shares, bonds, debentures, mutual fund units etc. a demat account holds it all in electronic form. A demat account shows the number of units, the date of purchase, and the price at which the unit was purchased. It also shows the current value of the investment. Thus, a demat account can tell you the financial position of your investments at one glance.

Demat accounts also contain information about bonus issues or rights issues of shares. They also show partly paid and fully paid-up shares and debentures. Some demat accounts also give information about dividend paid or interest paid. 

Features of a demat account:

• A Demat account holds the securities of an investor. When the investor purchases or sells any securities, they are credited or debited to his demat account
• Since all the securities are held in electronic form, it lowers the risk of theft and loss that was associated with physical securities.
• Selling securities through the Demat account can be done for odd lots or a different number of shares since order matching is completely electronic on the stock exchange.
• Demat accounts facilitate easy share transfers.
• Pledging shares for any purpose through the demat account is convenient. Some lenders offer loans against stocks and mutual funds by using this facility. 
• It becomes easy to invest in debt instruments since they are automatically credited to the demat account.

It is important to remember that a Demat account itself is not enough to invest in the stock market. It is necessary to open a trading account, to carry out the purchase and sale of shares and other securities. A lot of brokers or depository participants will open a demat account and trading account for you. However, it is entirely possible to open a trading account separately from the demat account.

The best demat account in India for an investor is one that provides an accurate and thorough statement accessible to the investor and trader at all points of time. Having demat accounts that are completely accessible online will ensure a stricter control and faster decision making for the investor.

Top 5 reasons why one should open a PPF account

PPF or Public Provident Fund is a scheme started by the National Savings Organization in 1968 with the objective of promoting small savings. Any resident Indian can open a PPF account. Only one PPF account is allowed to be opened per individual, and there can be no joint holders for this account.

The PPF account is one of the most popular investment alternatives that people enjoy in India today. This instrument has a 15-year lock-in period after which it can be renewed for 5 years at a time. But what makes the account so popular? Here are the top 5 reasons why one should open a PPF account:

1. Tax-free income:
The income earned on investments made in a PPF account is exempt from income tax. This makes it an attractive source to earn tax-free income. The interest is compounded for future years, and the interest earned on this compounded interest is also tax-exempt. This increases the returns from PPF.

2. Guaranteed income:
The PPF has a sovereign guarantee. What this means is that the Government backs the PPF. The returns on investment are guaranteed. This makes it a secure form of investment. Since minors can have their account, it is an excellent investment that parents can make for their children.

3. Tax break for investments:
Any investments made in Public Provident Fund get a deduction under Section 80C of the Income Tax Act. This makes it a lucrative investment option since it not only saves tax at the time of investment, but the income is tax exempt.

4. Flexible investment amounts:
While most investment modes have a fixed investment amount that should take place periodically, the PPF gives the investor the flexibility to make investments between Rs. 500 and Rs. 1,50,000 every year. These investments can be made any time during the year, up to 12 instalments. This flexibility means the investor can invest in this account any time he has the funds to invest.

5. Withdrawals:
The only major drawback about PPF is the liquidity. PPF accounts have a lock-in of 15 years from the year of account opening. For example, if you opened the account in July 2017, the account and the funds are locked in till March 2033. However, in spite of this lock-in, partial withdrawals can be made at any time subject to the terms and conditions. On maturity, the investor can choose to close the account and entirely withdraw his balance.

Top benefits of using UPI

UPI or Unified Payments Interface is a type of payment developed by the National Payment Corporation of India (NPCI). UPI has simplified the hassles involved with the transfer of money from one party to the other. 

How does UPI work?

To make a UPI payment, the first step is to create an account, either on the BHIM UPI app or through the different UPI apps available. Different banks offer their versions of the UPI app which work similar to BHIM.

After creating the account, the next step is to decide a UPI ID. Traditional payments use the bank account number and the bank’s IFSC code to receive payments, which presents a security risk. With UPI, the UPI ID becomes the mode that is used to receive payments. The UPI ID can be shared with people to receive payments instead of the bank account number, and this step provides an additional layer of security.

The next step is to create a PIN. To make a UPI payment, the person making the payment needs to authenticate it with a PIN. Once this authentication is done, the amount is debited from the bank account directly.

Top benefits of using UPI:

1. Secure mode of making and receiving payments:
UPI is a very reliable mode of making and receiving payments. There is no need to share bank account details. All that is required is a UPI ID. In case the UPI ID is not available, payments can be made using the bank account number and IFSC code. Using merely the UPI ID is of no risk since the transaction does not get authenticated without the PIN. This makes the UPI safe.

2. Instant transfers:
The Unified Payments Interface works on the IMPS system. This is not dependent on the bank’s working hours. UPI works 24x7 regardless of a bank strike or holiday.

3. Integrates different bank accounts:
One of the best features of UPI is that the app allows you to incorporate different bank accounts. You can receive payments in one bank account and make payments from the other.

4. Cost effective:
UPI is a free method of fund transfer. At the moment, banks have agreed to not charge for any transfers done via UPI. The proposed charges for UPI may be around Rs. 0.5 per transaction which is much lesser than NEFT and RTGS.

5. Easy to use:
Making payments using UPI is very easy even for a layperson. The process of registration is simple and hassle-free. The user interface is clean, and the process is well explained.