Benefits of Balance Transfer Cards

Balance transfers are a term almost every cardholder comes across. Whether it be during the time of application, being advertised as a benefit or as a promotional offer being pushed their way. While some cardholders may be well versed with the term, first time cardholders might find this term vague and confusing. Balance transfers are a way of managing overdue credit card balances accrued on other bank credit cards by transferring them to a new credit card. Doing so would grant the cardholder the ability to pay off the balance in installments over specific tenures at interest rates that are much lower. As a result, it is a great way of clearing out dues before compounding interest rates spiral the debt out of control.

But a balance transfer plan can do much more than stem the debt from overflowing. Below are ways in which a balance transfer enabled credit card can help a cardholder.

• Opens up more room for cardholder’s money: The balance transfer plans can work for people who have debt that they can afford to pay off. Debt transferred onto balance transfer cards don’t accrue high rates of interest for the tenure chosen. This allows cardholders to make minimum monthly payments on the debt and gives them more room with their cash to spend on other expenses. The low rates of interest mean that even though minimum monthly payments are being made, the debt will still get serviced. The money freed up can be used on more productive avenues such as investments or deposits into a high yield savings account. One thing to note when using this strategy is that the balance of the debt should be cleared as soon as possible once the balance transfer tenure expires. Balance transfer plans revert to original interest rates when the tenure is up and failing to clear the balance will begin accruing interest at higher rates undoing all the benefits gained from the strategy in the first place.
• Other Benefits: Balance transfer cards also come with a slew of ancillary benefits that can help a cardholder financially. Benefits include complimentary travel insurance policies and rental car insurance policies. They help save the cardholder the added expense of purchasing these policies separately. The balance transfer cards also come with a credit dashboard. This dashboard allows cardholders to monitor their credit score with every payment that they make and is a very helpful tool for those who have debts and have missed a few payments in the past.
• Protect credit scores: Using a credit card bill payment, cardholders can ensure they repair some of the damage caused to their credit score when they accrued the loan in the first place. The cards allow cardholders to pay off the debt quicker and easier through lower interest rates and can bring up the affected credit rating of the cardholder.

Things to look out for:

• They should be opted for if they have low transfer fees. Some cards might charge upwards of 5% for transferring balances which can eat away the benefits of having lower interest rates.
• Ancillary benefits such as complimentary insurance policies are not comprehensive and do not cover a wide range of claims.

Best avenues to invest in 2017 to get higher returns

The last quarter of 2016 saw one of the most landmark decision taken by an incumbent Prime Minister in the country’s 69-year history since its freedom. PM Narendra Modi, with inputs from the Finance Ministry, brought into effect the demonetisation of Rs.500 and Rs.1,000 notes. This move, although took the country into a near meltdown, has somewhat appeared to stabilise the economy for the long haul.

However, one of the prime effects of demonetisation was that avenues that were deemed profitable for investors lost their charm. In this article, we will talk about a few instruments you can invest in to get better returns for your money.

• Post Office Recurring Deposit

The age-old Indian post office has undergone a major paradigm shift over the last few years in a number of ways. Of the many, one of the things that stand out is the introduction of deposit schemes. These schemes offer good returns for investors and is almost matchable with fixed deposits of similar terms. At the time of writing this article, post office deposits offer 7.3% returns, which compounds quarterly, for a 5-year period. Read More

For instance, a regular Rs.100 investment will yield a return of Rs.7,250.50 returns once the scheme matures.

• Public Provident Fund (PPF)

Public Provident Funds (PPFs) has long been one of the most preferred investment avenues for a vast majority of risk-averse working professionals. These funds mature after a 15-year period and offers an opportunity to renew for 5 years every time from there on. Besides, PPF is also eligible for tax deduction under Section 80C of the Income Tax Act.

• Sukanya Samriddhi Account (SSA)

SSA is basically available for parents of a girl child, which enables them to invest so as to build a corpus to fund the education and other things relating to the girl. This account requires a minimum of Rs.1,000 to be opened and the guardian can add multiples of Rs.100 every time they want to add to the account. The account has an upper limit though, meaning parents can only invest a maximum of Rs.1.5 lakhs per calendar year. A benefit of this account is that it is available for tax deduction while the returns non-taxable. Also, the maximum interest such accounts offer stands at 8.5%

• National Savings Certificate

National Savings Certificate (NSC) is yet another save avenue that offers guaranteed returns. Currently, the returns offered stands at 8% for a five year term. An account can be opened for as less as Rs.100 while there is no upper limit to the amount that can be invested. An advantage of this fund is that you can use it as collateral for any loans.

These are some of the best investment options you can invest in if you are tired of fixed deposits and their falling interest rates.

Best credit cards for millennials

It is no longer a secret that every business in this world has made millennials their target audience. Be it selling fast food, clothes or smartphones, demands of the millennials are a priority for all business groups. Banks are also keeping up with the pace and aggressively seeking the attention of millennials.

There are several payment apps in the market today which offer tough competition to the banks. In order the give their credit card business a boost, banks provide lucrative perks to millennials. These perks include sign up bonuses, reward points, etc.

Some of the best credit cards available in the market today are as follows:

• Standard Chartered Manhattan Platinum Credit Card
• SBI Simply Click Credit Card
• ICICI Instant Platinum Card
• Yatra SBI Credit Card
• Citibank Premier Miles Card
• SBI Gold Credit Card
• Citibank Cashback Credit Card

Standard Chartered Manhattan Platinum Credit Card:

This particular credit card is great for shopping needs. It can be used to purchase groceries and pay dining bills. The benefits that can be availed with this credit card are as follows:

• Avail 5% cashback at various departmental stores and supermarkets.

• Enjoy 5X rewards points when you pay your dining bills, hotel bills, etc. using the Standard Chartered Manhattan Platinum Credit Card.

• Avail cashback of Rs.500 when you purchase products worth Rs.1,000.
• The cash withdrawal fee for this card is 3%. It is subject to a minimum amount of Rs.300.
• The rate of interest associated with the Standard Chartered Manhattan Platinum Credit Card is 3.1% per month.

SBI Simply Click Credit Card:

This particular credit card focusses on online shopping and offers great features for all the online shoppers. The benefits offered by the SBI Simply Click Credit Card are as follows:

• Enjoy 10X Rewards Points when you spend online with partners like BookMyShow, Amazon, Foodpanda, Cleartrip, Ola Cabs, etc.
• Avail 5X Rewards Points on other spends using the SBI Simply Click Credit Card.
• The annual fee is waived off when you spend a minimum of Rs.1 lakh in a year using this credit card.
• Avail gift vouchers from Amazon worth Rs.500.
• Avail fuel surcharge waiver of 2.5%.

ICICI Instant Platinum Card:

This credit card is ideal for people using credit cards for the first time. ICICI offers this credit card against a fixed deposit that you must open with the bank. You can avail this card without any credit history. The benefits offered by the ICICI Instant Platinum Credit Card are given below:

• No joining fee is required for this credit card.
• No annual fee is associated with the ICICI Instant Platinum Credit Card.
• The rate of interest associated with this card is 2.49% per month.
• 2 Payback Rewards Points can be availed when you spend a minimum amount of Rs.100 using this credit card.
• Avail Global Emergency Assistance with the Instant Platinum Card.
• At more than 800 restaurants worldwide, you can enjoy discounts of up to 15% on your dining bills.

Yatra SBI Credit Card:

If you wish to travel and pay your utility bills, this card can prove to be the right choice for you. The benefits offered by this particular credit card are given below:

• Enjoy vouchers worth Rs.8,250 from Yatra,com as a welcome gift.
• Avail 6X Rewards Points on all your bookings done with Yatra.com.
• Enjoy 6X Rewards Points for all your purchases at grocery and departmental stores.
• Enjoy the Easy Bill Pay facility for paying your utility bills on time.
• Avail fuel surcharge waiver of 2.5%.

Citibank Premier Miles Card:

This credit card can prove to be a great choice for millennials who are frequent flyers. The air miles that you earn can be redeemed for car rentals, hotel stays and flights. The benefits offered by the Citibank PremierMiles Credit Card are given below:

• Spend a minimum amount of Rs.1,000 and earn 10,000 miles. However, you must spend this amount within a period of 60 days from the date of card issuance.
• On all your airline transactions, you can earn 10 miles for spending Rs.100 using this credit card.
• The air miles that you earn can be redeemed at more than 100 airlines, both international and domestic.
• Interest rate associated with this card ranges between 37.20% and 42% per annum.
• Avail access to VIP airport lounges across India using this credit card.

Bottom Line:

There are several credit cards in the market today. Different credit cards are equipped with specific features and benefits. All other credit cards are not designed as per your requirements. Understand your spending pattern before you pick a card for yourself. Choose the one that suits your needs.

5 Lesser Known Term Deposit Features

Term deposits are one of the best known and most widely used savings scheme available to Indian citizens. The reason behind this is easy to guess. Term deposits are the most secure investment program in the country right now. The payout at the end of the lockin period is a certainty. For people who don’t understand market-linked investments, term deposits are the safest bet.

But besides safety, there are many other features of term deposits that make them an investment darling of the masses. Following are a few lesser known facts regarding term deposits that make them a good choice:

1. Term deposits allows you to select from a variety of maturity period starting from 7 days to 10 years. Deposits for longer durations usually earn a higher interest rate. You can also gain tax benefits on deposits longer than 5 years in duration.
2. You get the choice to reinvest the interest earned back into your term deposit (cumulative) or have the interest deposited to your bank account at specific durations, usually quarterly. This either increases the maturity amount you get or lets you invest the interest in another source.
3. Depending on the term you select, you can choose to have your interest paid monthly, quarterly, half-yearly, annually, or at maturity. Four of these payment options, depending on your term, can give you access to the interest before maturity if you want to use the money to invest elsewhere.
4. Term deposits can be opened online in less than 10 minutes with your net banking account. You can get the initial investment deducted from your savings bank account, set the tenure and register nomination, all with the click of a few buttons.
5. You can link your term deposit and savings bank account for seamless integration at maturity. You will be able to view the status of your deposits and maturity amount.

So, if you have any extra cash to spare, don’t just put it in your savings account. Put them in a term deposit account today and earn more interest on your money.

Things to Keep in Mind When Applying for a PAN Card

PAN cards  which have been a long standing identification card is an alphanumeric number having 10 digits is issued by the  Income Tax Department and is a pivotal ID proof when applying for a slew of various financial products including opening of bank accounts. This card is linked to numerous transactions such as payments towards tax, filing one’s tax returns, to TDS certificates and many more.

The card can be applied for by anyone over the age of 18 years and is used to link all tax related documents to bring about ease of retrieval of information, tax payment histories, to get information related to any investments made by the cardholder and even to check credit worthiness of an applicant when they apply for loans. The main idea behind the PAN card is to have a single point of data collection to detect and rectify cases of tax evasions thereby increasing the baseline of taxpayers. A PAN card can be applied through a simple process described below.

Application for PAN card: For first time applicants, a PAN card application form for Indian citizens can be found online. This form is titled FORM 49A and can be found on the NSDL website. The forms are also available through NSDL facilitation centres or centres that offer PAN creation services and are managed by the NSDL. All applicants will have to fill out this form. The PAN card does not provide any form of Tatkal facility to acquire the PANcard instantly. The forms need to be filled out and submitted at the centres along with the required supporting documents. For applications made online, acknowledgement receipts and supporting documents can be mailed to the Income Tax PAN services Unit located in Pune.

Supporting documents required: Now that the application forms have been filled out, they need to be submitted along with the required supporting documents. These supporting documents comprise of key details such as one coloured passport photograph of the applicant to go on Form 49A, valid proof of identity and address of the applicant and designation and code of the concerned assessing officer of the I-T department. The designation and code should be entered into the Form 49A.

Address proof will have to be in the form of a utility bill such as an electricity bill or telephone bill or a credit card statement or bank statement of the applicant. Drivers’ licenses and voter Ids can also qualify as valid address and identity proof.

In case the applicant has none of the above documents or does not own a property then they can provide a copy of the rental agreement and rent receipt signed by the MP, MLA or a gazetted officer representing the concerned locality.

If the applicant is a minor, then his/her parents or guardians can submit their address and identity proof documents listed above.

Fees for PAN card application: The fee for application of PAN card for Indian citizens residing in India is Rs.107 whereas Indian citizens currently residing outside India will have to pay an application fee of Rs.994. both charges depicted are inclusive of tax and dispatch fees.

Clauses: Only one PAN card can be held by an applicant at any time. Holding multiple copies of a PAN card is strictly against the law and those found to have more than one copy will face legal action as well as hefty fines of up to Rs.10,000. Holders with multiple PAN cards can voluntarily give up their additional cards and avoid any legal action. Application for request to change in PAN mentioning the one an applicant wants to retain and the one they want to surrender can be done on the Income Tax Department’s website.

How To Stop Your CIBIL Score From Decreasing

One of the most important factors influencing the approval of a new loan is your CIBIL score – or credit rating. Credit Information Bureau (India) Limited (CIBIL) is the oldest and most trusted credit information report (CIR) company in India. When you apply for a new loan with a bank, the bank applies to CIBIL to check your CIR. This credit score tells the banks whether you are a good borrower or not. CIBIL scores are counted on a scale of 300 to 900, and anything above 750 is considered good.

If you are a conscientious borrower, it is not difficult to keep your score at 750 or above. So what do you need to ensure that the score doesn’t go down? Here are a few tips:

Keep Your Credit Card Bills Low

Credit card bills are an important consideration in CIBIL scores. Your motto should be to never spend more than you can afford. If the item you want to buy using your credit card is more than 50% of your monthly salary, then it may not be a great idea to buy it. Wait till you save enough to be able to afford it. Low but regular credit card utilisation instils a financial discipline in you, which is essential in ensuring a high credit score. Do not be tempted by the credit limit you have been given on the card. It is advisable to keep a maximum of 2 credit cards, because it is easy to lose track of what you shop with credit card. This will add unnecessary debt burden on you.

Pay Your Credit Card Bills On Time

While it is good to use your credit card regularly, if you are unable to repay the amounts on time, it will affect your credit rating. Always make payments before the due date. Also, do not pay just the minimum due amount every month – try to pay off at least 50% of the bill due every month in order to keep a clean credit rating.

Do Not Borrow More Than You Can Pay Back

Loans are another important credit score consideration. If you have multiple loans and are paying too many EMIs, alongside credit card bills, then it is likely that you may miss one or two payments or end up taking more loans to meet one or the other debt, and thus end up in a debt trap. So take care to keep your debt to the minimum. Borrow only when you need, and not for purchase of luxury items or things that you cannot afford. Compare your EMI (including credit card bills) to salary ratio, and if you are using 40% or more of your salary on EMIs, then it is time you reconsider your purchases and rein in your financial horses.

Check Your CIBIL Score Yourself

Instead of waiting for a bank to apply for your CIBIL score and reject your loan based on a bad rating, take the matter in your own hands. It is a good idea to check your CIBIL score periodically – maybe once in a year. By looking at your CIBIL score, you can figure out which loans are driving it towards the negative, and thus rectify your loan behaviour accordingly. You can also check whether any of the information provided by banks to CIBIL is incorrect. It is possible that the banks may have missed adding in an EMI or two, or not registered one of your credit card bill payments. Keeping an eye on your CIBIL score will help you improve your score by the time you need a big loan such as car loan or home loan, and ensure that the loan is not rejected just because of a low credit score.

The keyword in maintaining the CIBIL score is financial discipline. If you are able to sustain your financial health as well as your physical health, you can rest free of unnecessary monetary worries.

Gold ETFs a smart way to invest

Gold exchange traded funds, are designed in a unique way to keep a track on the precious metal. Gold is actually a major commodity on all the stock exchanges around the world, from the New York Stock Exchange to the Bombay Stock Exchange, and even London, Zurich and Paris stock exchanges. 

Most gold exchange traded funds, or ETFs,  have different structures that are outlined for them, with a commision of typically 0.4% as trading fees; many even charge annual storage fees as well. Each ETF lets an investor own 1 gm of gold without owning any physically gold. In the United States many brokers for ETFs generally charge only a small amount or a fraction of the actual commision instead of the regular commision. Each share of the ETF covers the annual fund expenses which includes, storage, insurance and also management fees, which is obtained by selling a small fraction of gold, making the value of the gold in each ETF decline with a passing of time. Charges of  sales tax can be avoided with the purchases of ETFs but not on physical gold. For many individuals making an investment in gold is easy and is considered a safe investment when compared to the risks involved in market linked investments, or investment made in products that will get affected by economic, political and even currency fluctuations.

The interest for people to invest in gold has increased, inflation in many countries, declining trends in investment markets, falling of currencies worldwide, social instabilities, and more are some of the reasons why the precious yellow metal has seen such an increase. Making the precious metal a much  more safer option for an investment. Even gold is a speculative market like other commodities, and individuals do need to understand the risks involved. It is advised to have enough knowledge about the precious metal before making your investments.

You can even purchase ETFs online and even learn to trade with it. To buy ETFs online an individual needs to have an online trading account with a broker and you can invest either in a lump sum or using SIP. Trading in ETF is the same as stock trading, buying and selling can happen at any time using the online account depending on the markets being open.