Facts About FCNR Deposits You Should Know

 For creating a corpus, you need a good amount of savings and investments. You can place your money away in a bank fixed and recurring deposits or even invest in the share market. The idea s to plan the investments such that you accrue high returns and liquefy the investments when needed. If you are a conservative investor and prefer to park the savings securely, fixed deposits are the way to go. NRIs, too, can turn their foreign currency earnings into fixed deposits.

Yes, you can open a foreign currency non-repatriable deposit or FCNR account. But there are some facts that you should be aware of before opening one.

Not an account but a fixed deposit

Most NRIs think that FCNR is an account. But instead, it is a deposit. As an NRI, you can either open an NRE or NRO account. You can deposit foreign currencies in the former account and INR in the latter. Once you have adequate savings in the NRE account, you can create a fixed deposit of the same. These FDs are called as NRE fixed deposits, a term often used with foreign currency account.

Maintain deposits in different currencies

Many banks enable you to maintain the fixed deposits in different international currencies. Generally, the currencies in which you maintain the FCNR deposits include Britain Pound, Euros, Yen, Swiss Francs, Krone, and Krona. You can also maintain the FD in dollars such as American, Australian, New Zealand, Canadian, and Singaporean.

Be aware of tenure and premature withdrawal penalties

You can open FCNR account for a tenure ranging between a year to five years. A handful of banks offer 10 years tenure for such deposits. The best part is that they are risk-free and you need not worry about currency fluctuations. Also, the FCNR rates are in foreign currency where the FD gets maintained. You can also prematurely withdraw the FD before the term ends, but you need to bear the penalty for premature withdrawals. If you want to break the FD before a year, you may not be eligible for any interest rates on the deposits.

Open the deposit online

As an NRI, it might not be possible for you to visit the Indian banks and create a fixed deposit. Precisely why, all banks offering NRI facilities, enable you to open FCNR account online. It should consider account where the foreign currencies get deposited such as NRE or FCNR. You can easily create the FD by transferring funds from either of the account through wire transfers. You can create this FD while in India by depositing the travellers’ cheque or make foreign earning cash deposits.

5 Benefits Of Having A Saving Account In The Bank

 People have lots of aspirations and expectations to achieve in life. They want to live life on their terms and make it perfect. They wish to accumulate as many funds as possible to meet future requirements and fulfill their desires. They earn to live a brighter future and save for emergencies and other expenses that need priority. Youngsters, especially, have lots of passion for achieving their goals but require having sufficient capital to meet them.

Here is where the concept of a saving account comes in. Banks offer different interest rates on these accounts and encourage customers to open an account with them to save for unexpected emergencies and manage funds sustainably. They can withdraw the deposited money at any time and use it for other expenses.

Nowadays, every service and product is available online, so are banking facilities. People can opt for an online saving account opening to escape standing in long queues outside banks and operate from any place in the world. They can check their account balance, transfer funds, monitor transactions, apply for new chequebooks and loans, etc., using the mobile banking app. Smartphone banking is another trend that is becoming popular by the day.

The following are the benefits customers get by opening a bank account:

1. It helps create emergency corpus: Having a savings account helps create emergency funds during unexpected monetary crises. Whether it involves repairing a broken appliance or a medical emergency, the liquidity of these accounts enables account holders to withdraw funds easily at any time. It saves them from running into debts.
   
   
2. It helps protect assets: The assets stored in the account are free from any impact due to market volatilities and fluctuations. For example, money invested in real estate has a chance of delivering higher returns. But, at the same time, unforeseen circumstances may make it difficult to get instant money. Hence, it is safer to get immediate funds with an online bank account opening with zero balance.
   
   
3. International debit card: Having a bank account in India allows account holders to convert their debit cards for global usage and facilities. They can travel all over the world and use it at bank ATMs for transactions.
   
   
4. Easy bill payments: With the help of a bank account, people can pay their credit card bills, utility bills, mobile bills, DTH recharges, etc. directly. They can access the facility on their smartphones and PCs.
   
   
5. Easy account operation: It is effortless to operate a. One can easily open it by visiting the bank branch. Many banks even give the option to extend it online by logging into the website of the bank. They are beneficial for zero balance saving accounts for young people who want to start saving or learning how a bank works.

Mistakes To Avoid When Investing In SIP

 A Systematic Investment Plan is an investment process provided by various mutual funds in which investors are willing to make small sums rather than lump-sum periodic investments. The investment may be made at a weekly, monthly, or quarterly basis. Via compounding interest, SIP helps to grow capital, ensuring higher maturity returns.

SIP mutual funds are versatile, so investors can, anytime they want, choose to reduce, or raise the amount of investment or avoid investing in the scheme. For beginners and those not well-versed in the financial market process, the SIP is the safest and best investment option.

Mistakes to Avoid when Investing in SIP

In general, investors choose funds based on their risk profile, tenure of investments, and returns provided over the past five to 10 years. While these factors should be reviewed, a variety of other factors also need to be examined to prevent the loss of capital in a market crash.

The following are common mistakes investors make when investing in SIP:

• Choose the wrong fund: This is the first step in beginning to invest in mutual funds, so you need to select one or more funds to invest in your money. You must know your investment goal, expected returns, and risk appetite before you make the payment. Before beginning an investment, it is advisable to perform a comprehensive investigation and study. If you have long-term objectives, your financial goals might be destroyed by choosing the wrong fund.
  
  
• High investment amount: Since SIP mutual fund allows you to invest small amounts of cash in mutual funds, make sure that you do not select a sum of money. This way, you cannot invest in the remainder of the year. What you need to do is pick a sum that you can conveniently spend per month to reap the returns you initially aimed for.
  
  
• Short-term Investment: This is another standard error several SIP investors have made. The value of the investment is subject to the time it is invested for and not the sum of the investment. In other words, the longer the investment period, the greater the value of the investment would be.
  
  
• Having unrealistic targets: Immature investors are also seen setting unrealistic investment targets. It is advisable not to expect phenomenal returns from your current investment. You should expect average returns instead and proceed with your daily investment process.

Can a SIP be customised?

SIP investment is the most lucrative investment. You can invest in a SIP and take advantage of periodic savings along with earned interest instead of keeping your money idle in a savings bank account. The benefits of investing in a systematic investment strategy, however, does not end there. As per your requirements, you can customise a SIP. Even the best systematic investment plan in India allows you to do so if you want to adjust your fund options or make any other required changes.

How To Transfer Funds To An NRO Account?

Funding and finance are the critical aspects of living a peaceful life in any part of the world. Without sufficient funds, it becomes challenging to meet essential requirements such as housing, food, clothing, utility bill expenses, and others. Money helps people live a life they desire and allows them to access all the luxuries and amenities without any financial constraints. They are free to explore the world and fulfil all their demands and aspirations.

An NRO account is an abbreviation for a Non-Resident Ordinary account that allows NRIs to fulfil their banking needs while they are away from India. They enable account holders to receive funds within as well as outside India. Such accounts help them when they also need to receive regular funds from India. The sources of income include dividend income, investment income, rental income, etc. received through normal banking channels. If one is responsible for holding equity investments within India, the other must take care to provide the account as the default bank account for receiving dividend credits.

The utilization of the NRO bank account balance has no restrictions concerning withdrawing funds within India. If individual wishes to repatriate funds outside India, the principal funds can be transferred only up to specified limits. However, the interest earned can freely repatriate outside India. They allow flexibility when allowing joint operations with a resident Indian, unlike other accounts, which enable joint operations only with another NRI. Individuals can also opt for joint ownership with the parents and dependents in India while staying abroad.

How to open the account?

Individuals can open an NRO account by filling the application form providing all the details and submitting it to the bank online. After the submission, enter the mobile number along with a convenient time for the bank representative to contact and arrange for completing the required formalities, including funding details, undertaking the KYC compliance, etc.

Convert existing regular savings account into NRO accounts if the residential status has later changed into a non-resident. Submit a written application to the bank, stating the facts, including a change of residential status. The bank may require a copy of the passport, details of the new residential address outside India, along with documentary evidence for KYC compliance. For joint accounts, both the applicants must submit their KYC documents separately to the bank.

How to transfer funds into the account?

An NRO online account is flexible in accepting foreign currency remittances as well as rupee transactions. Individuals can transfer funds into it from any foreign bank account or any bank account within India. With the flexibility of joint operations and receiving the rupee credits, NRIs can apply to open the account conveniently using digital media.

What Is Investment Banking? What Are Its Benefits?

 Investment banking is about managing investments for a bank’s client towards whom these facilities are directed. The individuals who can avail of the investment banking services are HNIs, corporates, and the Government for planning and managing large projects, saving time, and money by identifying the risks associated with the project before moving forward.

They are highly specialised segments within the banking operations which help raise the capital and offer financial consultancy facilities concerning large, complicated financial transactions. Such facilities include thorough investigation, analysis, and informed recommendations about how much the company is worth. Based on the results, the trained investment bankers determine whether to create the deal. 

Investment bankers further structure an optimal deal to check if the client is considering acquisition or merger or sale. Most of the investment banking services involve prime brokerage and asset management, which is in conjunction with their investment research businesses.

The services are broken down to bulge bracket, middle market, and boutique market. The benefits of investment banking services are –

• The services involve investing the client’s funds in other companies for creating more value.
• It helps investors raise funds by underwriting or by acting as an agent in the issuance of securities for conducting the acquisition, merger, or sale.
• A thorough investigation gets conducted to make sure every compliance is met for the client’s deal, thereby minimising the risk of failure or loss of invested capital.

Now, investment banking services are aplenty. They are as follows –

• Mergers and acquisitions
• Corporate finance
• Equity research
• Sales & trading
• Asset management

What other services do investment banking offers?

The investment banking services may include the issuance of securities, underwriting, sales and trading of derivatives, equity securities, and fixed instruments, currencies, and commodities, facilities.

• Issuance of securities: It means raising capital for the client or business and creating documentation for the Securities and Exchange Commission. It is a prerequisite if the company plans to go public.
  
  
• Underwriting: It is practically the investment bank standing guarantee for the loan which is given to a business or corporate individual purely for business purpose. Investment banking also includes IPO underwriting, which assures that they have investigated the company’s credibility and is good to invest.
  
  
• Sales and Trading: This aspect of derivatives is a highly specialised skillset that offers accurate data, and its analysis comes handy for gauging the market stock price and its potential to grow or fall. These skills allow traders to either buy or sell stocks for their clients.
  
  
• FICC facilities: It involves handling fixed income instruments such as currencies and commodities, which, unlike the stocks carry lesser risk levels daily. Also, the percentage of growth is steadier.

Essential Facts You Should Be Aware Of Concerning NRI Banking

 Most of the Indian banks nowadays offer NRI account to their consumers living overseas. NRIs have the option to choose between three basic accounts – NRE, NRO, and FCNR accounts. These accounts make it easier to manage your savings seamlessly and conveniently. However, since all NRI bank accounts come with different features and benefits, here are some facts you should be aware of.

Types of accounts

As an NRI, you can open four different kinds of NRI bank account. These are –

• NRE account
• NRO account
• FCNR account
• RFC account

Salient features

Before you do the NRI account opening, you must consider your requirements. The basic features include –

• You will need an NRE account if you want to park your savings in foreign currencies. The funds parked in the accounts and the interest earned on the same are freely and fully repatriable.
  
  
• If you are staying overseas but have investments and a good source of income, you need an account where you can save funds in INR. In such scenarios, you should open an NRO account. In such accounts, you can only repatriate the interest earned on the savings, according to RBI limitations. Also, you need to pay TDS on the savings parked.
  
  
• If you hold enough savings in foreign currencies, you can open an FCNR account and earn decent interest rates on them without worrying about the currency fluctuations.
  
  
• If you seek to return to India at a later point and park the foreign currencies in the NRI savings account, you can open the RFC account for eliminating risks associated with currency fluctuations.

Opening of account

According to the NRI services, most prominent Indian banks allows the consumers to open their NRI account online. You can visit the preferred bank website, select the type of account you seek to open, fill the form, and attach documents. Some banks may ask to provide proof of the NRI status, which you get from the Indian Embassy of the country you are living in. You can also open this account by visiting your preferred bank with the essential documents whenever you visit India. While most banks offer these services, you should check if the bank has an RBI authorisation and the necessary license for dealing with foreign currencies. Open such accounts irrespective of the international country you reside in.

Facilities available

As an NRI, you can save your foreign earnings in any of the mentioned NRI bank account. You can conduct different transactions. Like with most of the accounts, you can NRI net banking facility which helps you do a range of online transactions. For instance, you can easily send funds to your family in India or make fixed deposits out of the savings through internet banking. You can seamlessly transfer money from one account to other and pay for the expenses in India or overseas through net banking.

How To Open A Saving Account?

Finance and funds are some of the essential requirements for living a comfortable and luxurious life. Not only do they provide mental satisfaction, but they also provide people with the ability to meet all their desires. Most importantly, families must learn how to use money sustainably so that they can start saving for the future. Nobody can predict emergencies and problems; hence it is safer to start saving from the current moment.

With the help of banks and financial institutions, people can start depositing and investing capital in various assets for higher returns in the future. They offer the facility of a saving account which enables customers to use their wealth wisely and calculatingly so that they do not exhaust their savings. Money can help people avoid so many problems like debts, poverty, dependability, and so on.

With the rise in people opting for employment, companies approach banks to help them with a zero-balance account opening online to deposit the salaries of all their employees at the end of each month. They can use it to their convenience and withdraw money whenever they desire. All account holders get a debit card, a cheque book, a passbook, and other documents necessary for tracking the finance from the respective bank.

Following is the eligibility criteria to open the account:

• The applicant should be a citizen of India
• The age should be 18 years and above
• Minors require their parents or a legal guardian to open an account for them
• The address and identity proof should be valid and approved by the Government

Documents required to open the account

With the invention and progress in technology, banks have started providing digital banking services for access to customers. The digital banking app helps them access services on mobiles and other gadgets anytime and anywhere. Whether opening a zero-balance saving account online or by visiting the bank’s branch, every applicant should submit some documents as proof. Following is the list of documents required to open this account:

• Proof of Identity – Passport, Driving Licence, Voter’s ID card, etc.
• Proof of Address – Passport, Driving Licence, Voter’s ID card, Utility Bills, etc.
• PAN card
• Form 16 (in the absence of the PAN card)
• Two latest passport size photographs of the applicant

The procedure to open the account

For accessing the benefits of online saving account opening, individuals must follow some guidelines to open the account. Following is the procedure:

• Download the application form from the bank’s website and fill it with the information in all the required fields to avoid rejection. Contact the executive of the bank for queries.
• Keep the documents mentioned above ready with the duly filled application form to upload on the bank’s website
• The bank’s executive will verify the information and provide the debit card and bank documents with details of the saving account