Understanding The Difference Between NEFT and RTGS

With the increased technical knowledge and introduction of digital payment systems, online Fund Transfers have become the norm. Users have various modes to choose from. However, some time-tested mediums enjoy popularity for inter-bank transfers. They are National Electronic Funds Transfer and Real-Time Gross Settlement. The Reserve Bank of India (RBI) regulated systems enable you to transfer to Savings Account directly.

One thing to note is the speed you get with these traditional systems. They are apt for making quick payments and peer transfers across India. Both offer advantages but have different settlement concepts and are suitable for specific purposes. Understanding this disparity helps in making the proper selection for transferring funds. Consider these factors to understand the

Settlement process

The method of settling payments is the significant RTGS and NEFT difference. The funds get settled hourly in NEFT and get processed in batches on weekdays. The timing varies on Saturdays, and no transfers occur during Sundays and Bank holidays. This processing happens within two hours. RTGS takes place in a specific time slot prescribed by the Reserve Bank of India, but the processing is immediate.

Timing

Getting the timing right is crucial to access these services. As discussed, NEFT gets processed in batches. This happens between 8:00 AM to 6:30 PM on weekdays. The timing varies on Saturdays. RTGS, on the other hand, begins from 9:00 AM and lasts till 4:30 in the evening. These timings change based on the regulations and depending on the bank. Ensure to check the same before online Saving Account opening.

No transfer takes place in both the cases on Sundays and bank holidays. If these transactions fail, the refund procedure varies for NEFT vs RTGS.

Difference between NEFT and RTGS:

Transaction limit

It is crucial to stay mindful of the minimum permissible limit while making transfers to avoid charges. While there is no restriction in NEFT, you require a minimum of Rs. 2 lakh to make transfers using RTGS. This is because it is meant for high-value transactions. As for the upper cap, there is no limit on both payment methods. Hence, opt for RTGS for transferring a considerable amount, whereas NEFT is suitable for regular transfers.

Charges

When you use NEFT to make outward transactions that amount to Rs. 1 lakh, you pay Rs. 5 plus service tax. The fees go up to Rs. 25 plus service tax if the transaction amount exceeds Rs. 2 lakh. Outward transactions in RTGS attract charges of up to Rs. 30 per transaction if the amount is around Rs. 2 lakh to Rs. 5 lakh. You get the exact details when you use these services through banking apps.

How To Effortlessly Open A Savings Account Online?

 Are you looking for a perfect place to deposit your savings and earn a reasonable interest over a period? You might want to start by opening a Savings Account online to simplify your financial life further.

Online Savings Account opening might be the best thing for humankind since the technology was invented. Make use of your ideal money by quickly depositing it in an online Bank Account. Here is how: 

Opening account online 

• Firstly, ensure you are a Bank Account holder in the bank of your choice where you wish to open a Bank Account.
• Processing details instantly has gotten easier when you already have the list of documents handy with you. You find this list on the bank’s website. It is advisable to keep mandatory documents like Aadhaar, address proofs, and a PAN card with you.
• Now, visit the official website of the desired bank or download their banking app.
• Speed up the opening procedure with video-KYC on computers or smartphones with video and audio calling features.
• After your details get verified by the bank, your account is accessible immediately.
• Other starter kits for your Savings Bank Account get mailed by the bank post. 

Required list of documents 

Some of the documents that banks ask for online Bank Account are: 

• Account opening form that includes all the details asked and affixing your photograph on the same.
• Choosing from a range of documents that serve as ID proofs:
• PAN Card
• Aadhaar Card
• Passport
• Driving License
• Voter ID Card
• Employee ID Card
• Other photo IDs provided by central or state government
• Banks accept permanent or temporary Address proofs such as:
• Passport
• Aadhaar Card
• Ration Card
• Driving Licence
• Utility Bills like electricity, telephone, gas, or water
• Rental lease/agreement

Service charges or fees associated with the account 

Eligibility	Anybody above 18 years with KYC
Initial Minimum Deposit	Rs. 500
Minimum Account Balance	NIL
Maximum End of Day Balance	Rs. 1 lakh
Monthly Average Balance (MAB)	NIL
Annual Interest Rate	2.25% (Applicable from 1st of Feb 2022)
Interest Payment	Quarterly
SMS Alerts	Rs. 10 Quarterly
Account Statement	Free Monthly e-statement*
Balance certificate per Instance	Rs. 50
Card/ KIT returned due to wrong address	Rs. 50
Bill Payments/ Re-charge	Free
Cash deposit charges	Free
Cash withdrawal charges	Free
Virtual Debit Card Issuance	Rs. 25

A Definitive Guide To NRE Fixed Deposits

Regular investment is a healthy financial habit. But many Non-Resident Indians refrain from doing so. They are hesitant because they lack market knowledge. They might also be unaware of the stock market scene overseas. In such cases, they should opt for a non-resident Indian or NRI Fixed Deposit.

It serves as an excellent investment channel to global Indians. It allows them to deposit the income earned abroad safely. It also helps them expand their investment substantially. This way, they have backup financial aid at their disposal. Such types of FD Accounts come in three types. They are as follows:

• Non-Resident External (NRE) Fixed Deposit Account
• Non-Resident Ordinary (NRO) Fixed Deposit Account
• Foreign Currency Non-Resident (FCNR) Fixed Deposit Account

Of them, NRE Fixed Deposits are the most preferred type. This is because it is exempt from taxes. This way, it enables the NRI to retain their investment easily. The following aspects help you gain a better understanding:

Repatriation

An NRE FD Account offers complete repatriation. This means you can withdraw the principal amount and the interest earned.

Interest rates

Compared to other NRI FDs, this FD offers relatively high interest rates. This way, you get a better chance at building your investment.

Fund source

An NRE FD converts the deposited income earned overseas into Indian Rupee. It also maintains the funds in the same manner.

Processing time

You need not wait for a lengthy time to open your NRE Fixed Deposit Account. Nowadays, people prefer the online option. It is more convenient that way. However, you could visit the nearest branch and open it as well. Either way, you must submit the following documents:

• A valid Indian passport
• Permanent Account Number (PAN) Card or Form 60
• Proof of address (of both India and overseas) as per Customer Identification Policy
• Proof of NRI or Person of Indian Origin (PIO) status
• Recent passport size photographs

While these are the basics, your bank may ask you for other documents for further verification.

Tenure

The tenure ranges between a year to 10 years. However, you may extend it upon maturation. The process for the same varies from bank to bank.

Joint Account facility

An NRI can hold the NRE FDs with another individual. However, if the other holder is an Indian resident, they should comply with specific guidelines. For instance, they should be the primary account holder's close relative or family member. Also, the operations in such accounts are ‘Survivor or Former’ only. In other cases, the joint holder is an NRI. They must have valid proof to justify their NRI status too.

The salient features of an NRE Fixed Deposit Account

 A non-resident Fixed Deposit is widely known for its benefits. It acts as a lucrative investment option for global Indians. It allows them to deposit income earned overseas safely. Plus, it enables them to expand their savings effectively. An NRI Fixed Deposit Account has three types. A popular one is the Non-Resident External or NRE Fixed Deposits. It is a type meant for NRIs, and the following are the features that help you understand it better:

Repatriation

An NRE FD Account offers full repatriation. This means you can withdraw the principal amount and the interest earned. Hence, it appeals to the needs of many NRI investors.

Tax liability

Often, your interest earnings get affected by taxation. This further hampers your overall investment growth. But with NRE FD, you do not face this situation. Unlike other NRI FDs, it does not attract taxes. As a result, it makes for a better investment option for first-time investors.

Interest rates

The progress of an investment depends on various factors. But the most important one of them is the rate of interest. It plays a significant role in the growth of your deposit. It also determines the pace at which your invested funds increase. Precisely why, an NRE Fixed Deposit Account offers relatively high interest rates. It builds your investment quickly. Plus, the tax-free policy enables you to reap the actual benefits of an FD Account.

Fund sources

An NRE FD converts the deposited income earned overseas into Indian Rupee. This way, you may open an account with foreign currency. They automatically turn the funds into INR. It will also maintain the funds in the same manner.

Processing time

It does not take much time to open NRE Fixed Deposit External Account. The fastest mode is online. But if you cannot do that, you could also open offline. For this, visit the nearest branch of your bank. In either case, you need to present documents like:

• Permanent Account Number (PAN) Card or Form 60
• A valid Indian passport
• Proof of address (of both India and overseas) as per Customer Identification Policy
• Proof of NRI or Person of Indian Origin (PIO) status
• Recent passport size photographs

These are the basics. Your bank may ask you to submit other relevant documents. Once you do so, it should not take much time to open your NRE FD Account.

Know Which NRI Fixed Deposit Is Ideal For You

 When people move overseas, they may still want to sustain their Fixed Deposits. But a regular one will no longer suffice their needs. This is where a non-resident Indian Fixed Deposit Account comes into the picture. It is a Deposit Account specifically meant for global Indians. An NRI Fixed Deposit serves as a safe investment option. It allows NRIs to deposit the income earned overseas quickly.

It also lets them make steady earnings through their deposits. This way, they need not seek other investment options that they are unsure of.  Also, such accounts are of three kinds. Each meets a specific financial need. Thus, to reap the benefits of your FD Account, know about them in detail:

Non-Resident External (NRE) Fixed Deposit Account

If you are an NRI earning in foreign currency, opt for an NRE Fixed Deposits. It automatically converts your deposits into Indian Rupees. Plus, it maintains your investment in INR for the deposit duration. Such FD Accounts also offer full repatriation. This means you may withdraw the principal amount and the interest earned. Moreover, the interest earned on your deposit is exempt from taxes.

Non-Resident Ordinary (NRO) Fixed Deposit Account

An NRO Fixed Deposit is ideal for those who earn income from India. If you move to the US and in your absence, you have put your house on rent. Now, the rent is the income you earn from India. This type of NRI FD enables joint holdings. So, open it with an Indian resident or another NRI.

Foreign Currency Non-Resident (FCNR) Deposit Account

The third type is an FCNR Deposit Account. It lets you deposit funds in freely convertible currencies accepted worldwide. Hence, it is suitable for individuals who keep moving overseas for work. An FCNR FD also holds other benefits. For instance, it lets you maintain the deposited amount in the original foreign currency. The following are the currencies accepted under this NRI Fixed Deposit Account:

• US Dollar (USD)
• Australian Dollar (AUD)
• Great Britain Pound (GBP)
• Canadian Dollar (CAD)
• Japanese Yen (JPY)
• Hong Kong Dollar (HKD)
• Singapore Dollar (SGD)

The minimum and maximum deposits of these currencies depend on your bank.

Before you open NRI Fixed Deposit Account, remember the following things:

1. Taxation

Always consider the taxation policy of an NRI FD Account. It plays a significant role in your total investment.

2. Financial goals

Be sure of your financial goals before you start investing. This includes both short and long-termed ones.

3. Duration

Each type of FD has a minimum and maximum duration. For instance, the minimum duration of an NRE FD is a year. So, be mindful of this when you select one.

A Guide To Personal Loans

An increasing number of Indian households are considering taking credit to fulfil their financial needs. From making big-budget purchases to meeting emergencies, getting a Loan is a sought-after choice. Now, there are various types of Loans in the market. They are meant to fulfil specific needs. For instance, you get credit for financing a car, house, wedding, vacation, or medical emergency.

But if you do not wish to restrict yourself with a specific purpose, Personal Loan is an ideal choice. It lets you decide the end-use based on your discretion without intimating the lender. Also, you need not submit any collateral to avail of it. This makes it convenient for everyone. But several aspects determine your eligibility and affect Loan approval. You should understand them and prepare accordingly. Let us know them better:

Eligibility criteria

This is the first aspect to understand for effectively planning your Loan application. Although the eligibility for Personal Loan differs from bank to bank, the general parameters remain the same. They include your age, income, employment, existing debts, credit score, etc. The lending amount, tenure, equated monthly instalments, and interest rate gets decided based on them. Hence, you should check the same before applying.

Loan tenure

Lenders sanction the Bank Personal Loan for a period of one to five years. The EMI's get spread out for the duration, making it easier to repay flexibly. Although you have a longer time to repay, you need not stretch the tenure to five years. You may choose to shorten it as much as possible to pay off the Loan faster. This reduces the interest pay-outs and overall Loan burden. On the other hand, a longer tenure reduces the EMI amount but increases the Loan cost.

Borrowable amount

You get up to Rs. 25 lakh as the Loan amount. This is ideal to fulfil diverse expenses without compromising. But it is not necessary to take up the maximum amount. Moreover, lenders finalise it based on your eligibility. Instead, you should decide the borrowable amount depending on your affordability. Check the Personal Loan interest rates it attracts and choose accordingly. Lenders let you calculate this with tools on their websites.

Interest rate and charges

Being unsecured, this Loan type does not require collateral submission. Hence, lenders need other means to protect their interests. Hence, they charge a higher interest. At present, most leading banks charge up to 12% interest. But this also depends on specific eligibility factors. Therefore, never go by the quotation. Check it against your eligibility. You get to do this conveniently with eligibility and an EMI calculator.

Besides interest, banks also levy specific changes throughout the Loan application process. They include documentation expenses, processing fees, administrative charges, etc. Check this carefully to estimate the accurate Loan cost. The information is accessible on their websites and the Banking app.

5 Factors That Affect Personal Loan Approvals

Earlier, getting financial assistance caused hesitancy in the minds of people. The burden of obligation stressed them out. But getting credit is no longer considered the last resort. Most applicants consider it wise to safeguard savings and get instant funds to meet financial demands. Whether it is for making big-budget purchases, financing emergencies, or fulfilling financial obligations, getting a Personal Loan is preferred.

Banks make it easier to apply for it through their websites and the Banking app. It gives you access to funds instantly with minimal paperwork, quick verification, and competitive Personal Loan interest rates. However, as lenders do not ask for collateral, they have stringent parameters to judge your eligibility. This impacts your application approval. Let us understand them in detail:

Existing liabilities

The Loan providers make it easier for you to manage the Loan with flexible repayment terms. They spread out the repayment in equated monthly instalments throughout the tenure. But this is only useful if you have sufficient funds to deploy for prepayment. In the presence of debts, it becomes challenging to manage an additional financial burden. Hence, if the amount of existing EMIs is higher, the Loan approval gets affected.

Income

Your revenue is the prime factor affecting your repayment capacity. If you have a higher income, you are better positioned to distribute it. We all have monthly financial obligations like rent, bills, maintenance fees, and other expenses. Having limited earnings makes it a struggle to fulfil them.

Adding a Loan to the list is not feasible. Hence, lenders consider this aspect while evaluating your eligibility. You get to check the same and plan your application with eligibility and an EMI calculator.

Job stability

Since there is no collateral involved, banks rely on your repayment capacity to repay the Loan amount. Hence, they check your financial stability. Having a higher income does not mean anything if it is not secured. For this reason, they weigh your employment history and employer's reputation for assessing longevity. In the case of Personal Loan for self-employed, they factor in the years of business existence and profitability.  

Credit score

It is the most important factor affecting your eligibility for Personal Loan. It depicts your repayment behaviour to them. This is crucial as that reflects the possibility of smooth repayment. A score is essentially a three-digit number ranging from 500 to 900. Ideally, having a ranking above 700 is considered favourable. If you have a higher score, the chances of approval increase and vice versa. Hence, check it beforehand to improve your profile.

Age

Your age is an indicator of your financial stability. When you are younger, you have more working years left. This makes it easier to handle financial responsibilities. But this is not possible as you grow older. Hence, lenders prefer younger applicants.