What Are The Features Of Digital Banking?

Technology caused the biggest shift in the banking sector over the years. It changed the way they engage with customers and each other. The shape of established retail banks is changing, driven by the challenge of fast, focused digital new entrants capturing the market. They made processes and applications convenient to access for everyone worldwide.

Digital banking is the digitisation of all traditional banking activities and programmes historically available to customers when physically inside the branch. It includes money deposits, withdrawals, transfers, Bank Account management, financial product applications, loan management, bill payments, and other account services.

Features

Digital banking in India is accessible on PC, smartphone, or tablet. It is also far better than visiting the bank branch. There are several features you enjoy by adopting this method.

Online banking

It provides you with the luxury of banking anytime, anywhere. Website services offered are available 24*7. To facilitate online use, banks provide online banking apps with a host of high-quality technology solutions to make the banking experience easy and fast. Some services include account summary, transaction history, checking account statement and balance, online payments, and fund transfer.

Personal finance planning

There is lots of competition in the banking sector. Hence, they come up with advanced websites and processes to ease online Saving Account opening. Some features include loan calculators, premium calculators, financial planning tools, investment tools, budgeting, forecasting, and tax preparation. It becomes simpler for you to select the Bank Account and calculate the interest rates.

Mobile banking

It is a service provided by a bank or financial institution, allowing customers to conduct financial transactions remotely using a smartphone or tablet. Unlike internet banking, it uses software or an app provided by the financial institution for this purpose. Mobile banking is usually accessible anytime.

Unified Payment Interface

Nowadays, you make transactions from your mobile phone from any location. Thanks to the integration of UPI and online banking solutions, customers transfer money between accounts easily. UPI is an instant real-time payment system developed by the National Payments Corporation of India facilitating inter-bank transactions directly to the Saving Account.

Phone banking

It is famous for people with a primary phone without a data connection. The services include SMS, missed call, and USSD banking. Those who lack an online Bank Account use them from anywhere. They are free services offering cashless transactions.

Digital wallet

Mobile wallets are popular too. They are the best technological innovations and allow you to pay directly from your smartphone. Millions of people use them for payments. Some popular options are PayTM, MobiKwik, JioMoney, State Bank Buddy, etc.

The Procedure To Transfer Money From The UK to India

Funds are a source of living worldwide. You earn money to secure your future and fulfil your expectations while finding several growth opportunities in professional fields. Indians travel to foreign countries to live a bright future and secure their goals. You never forget your responsibilities towards your family and cultural values, even in a foreign land.

Several Indians travel to this country each year and improve their living standards. While you reside in the UK, you find several options to transfer money from the UK to India. The funds help your family in an emergency and for fulfilling urgent requirements.

Bank transfer

The convenient option to send money to India is banks. With the promotion of benefits of digital banking, most Indians own a Bank Account. Your recipient accesses the money from an authorised ATM or visits the bank to collect money.

Money agent

Sending cash is one of the quickest ways of money transfer to India from the UK. You need to meet an agent, hand over the cash to transfer abroad, and provide the recipient and sender details. The receiver collects it from a local agent. One of the things to consider is the size of the agent network in India. Since the receiver collects the cash personally, having a broad network is an advantage.

Mobile wallet

The majority of mobile phone users in India use a digital wallet to manage payments. It is an app you download on your phone which works similar to a physical wallet. It allows you to store money, pay, and send money directly to another person’s wallet or Bank Account. When you transfer money to India, the cash is readily available for the receiver to spend, pay bills, or withdraw.

Reasons to transfer

There are plenty of reasons you transfer money using your Bank Account or international money transfer operators. In India, it helps you pay for the rent of your flat or property. Additionally, you pay the tuition fees of your child and renew investment premiums periodically. Your family meets the necessary expenses without borrowing funds from others.

Weddings in India are a grand occasion. You initiate an online money transfer to India to help your family pay for the wedding expenses without running into debt. Since it is a crucial phase, you ensure it is memorable and pleasant. You prevent your family from facing financial burdens and reduce their worries.

Reducing costs

When you transfer money from the UK to India through your Bank Account, you pay a fee. If you also consider the exchange rates, the costs add up. Hence, find ways to reduce these fees and achieve superior exchange rates to save money while securing your transfer.

Always consider the time taken to reach the recipient, the convenience, and network facilities, among other factors, while transferring funds.

How Are NRI Account Interest Rates Calculated?

We all aim to excel and succeed in life. Whether it is academics or career, we have some expectations to meet. Some courses or job opportunities are not available in India. We collect and save money to travel overseas for fulfilling our aspirations. However, we must not forget our responsibilities towards our family in India.

Banks encourage you to open an NRI account for depositing foreign currency. As a non-resident Indian, it is safer to enquire about the NRI account interest rates before submitting the account opening application. They differ between banks and the facilities they provide. Some give an interest rate between 3% and 6% per annum to customers opening the account. All this information is available on their portal for easy access.

Payment

The bank pays you the NRI savings account interest rates every quarter or as decided. They calculate it on the available daily balance or as required by the regulator and bank. They are subject to change with time at the bank’s discretion or according to RBI’s directives.

Calculation

There are two categories of NRI accounts – NRE and NRO account. You calculate the NRE savings account interest rates depending on the end-of-day balance maintained in it. In case they change, the bank updates the information on the website.

Taxation

NRE interest rates are exempt from taxes in India, whereas the interest earned in an NRO account attracts taxes. Both the principal and interest earned are tax-free. You get the facility of repatriating interest and principal amounts anywhere globally with internet and mobile banking services.

Investments

The NRE account helps you invest in India across mutual funds. Joint account opening is possible with another NRI or Person of Indian Origin (PIO) and operated on either or survivor basis. Assign a Power of Attorney to transact on your behalf. However, they might have limited access to your account.

Payment frequency

You get the best NRE account interest rates. Every quarter, on 31st March, 30th June, 30th September, and 31st December, the payment frequency is subject to change.

Currency

The bank maintains funds in Indian rupees. Open it with a deposit of INR 5 lakh. The total relationship value within six months should amount to a minimum of INR 30 lakh. They calculate it by aggregating the average quarterly savings account balances and term deposits, insurance, investments, and mortgage loan outstanding. Thus, 40% of the loan’s net balance goes towards TRV computation.

Other accounts

As an NRI, banks also offer you attractive NRO savings account interest rates of up to 3% per annum.  The account helps you manage your Indian rupee earnings while residing abroad. They are the ideal choice for those who have some form of income in India while overseas, such as rental property, mutual fund dividends, pension, fixed deposits, or other similar sources.

Which Is Beneficial: Recurring Or Fixed Deposits?

India has long been a country that prioritises saving overspending. Therefore, most of us are aware of Fixed Deposit and Recurring Deposit concepts, mainly because they are two of the most preferred investment options. Let us look at some of the reasons why they are so beneficial.

FDs and RDs: Traditional investment opportunities

Traditional investing options such as fixed deposits and recurring deposits have been popular for years. Many modern investors put money into FD and RD regularly to offset the risks associated with sophisticated, market-linked instruments.

An investor can put aside some money into the FD for a specific time at a set interest rate. However, if you withdraw money before the minimum lock-in period gets completed, banks levy a penalty.

Monthly, quarterly, half-yearly, or annually, the interest gets either accumulated and added to the amount of the fixed deposit account or deposited to the investor's savings account. At the end of the investment term, the investor's collected interest is given to the principal sum of the FD.

You can make use of a fixed deposit calculator to know your maturity amount before investing. These are available on the banking apps too. On the other hand, a recurring deposit is a monthly investment of a defined amount at predetermined interest rates. The interest and maturity proceeds get credited in the same way as an FD.

If the interest amount for a financial year exceeds Rs. 10,000, the bank deducts a Tax Deduction at Source for both. Here, you can use a recurring deposit calculator to know what the maturity amount will be. So, you might wonder how an FD differs from RD.

Higher returns in FD

When an FD and recurring deposit are co pared, the former's maturity proceeds are likely to be higher. It is because the FD requires you to invest the entire amount at one go. As a result, the interest gets computed on a bigger sum, and the maturity proceeds end up being bigger due to compounding effects.

On the other hand, the RD account allows you to invest a set amount of money monthly. As a result, while the first instalment receives interest for the whole 12-month period, the second instalment only earns interest for the first 11 months. As a result, the interest earned here is lower than the FDs.

More flexibility in RD

FDs are the best option for you if you have significant money to invest. On the other hand, RDs are a great choice if you want to develop a safe pool of assets. In addition, with consistent monthly commitment, you can set specific, short-term goals, such as paying annual school fees or saving for a major family event.

A Detailed Guide On The Facilities Offered Under Online Savings Account

Today, all public and private sector banks offer savings account. You can use them for parking and growing your savings gradually. The moment you begin earning, you can open the account if you do not hold one. While some organisations do offer an account for depositing the salary, consider opening a regular one with which you can enjoy a host of benefits. Thanks to digital banking, you can open an account in minutes online. 

Here are some of the most generic facilities which banks offer on online saving account opening: 

Usage of account for daily transactions 

The essential feature of the account is it lets you conduct all types of daily transactions. There is no upper cap on the sum you can deposit in the account. Deposit the money through cash, cheque, or online transactions through various accounts. However, banks have a daily withdrawal limit on such accounts. Generally, the withdrawal limits are higher when you remove cash from the bank branch than the ATM. 

Provides ATM or debit card 

All Indian banks offer an ATM or debit card in the saving account welcome kit. The ATM card includes your name, a 16-digit code, and the expiration or validity date on the front, while the CVV number with the signature strip on the back. You use the ATM card for withdrawing funds from any ATM vestibule. However, you should check the number of transactions possible through ATM, be it home bank or otherwise. 

Besides withdrawing cash at the ATM, use the card for shopping at retail stores and online portals. You can use them for paying the utility bills as well. 

Net banking services 

You already have opened the account online. Now, you can explore more opportunities here. You can do transactions often, check your account balance, download the bank statement, transfer funds through NEFT, RTGS, or IMPS modes. You have the provisions to pay the utility bills, house rent, loan EMIs, and other monthly expenses directly through the account. You can even set up login details in the banking apps for on the move transactions. 

Earn interests on the savings 

Every bank offers savings interest rates on the balanced parked. The interest rates offered are generally not too high, but you can earn higher interest rates under the online mode. It is also applicable for those who have maintained higher deposits in the account, usually exceeding Rs. 1 lakh. The interest rates offered ranges between 4% to 7% depending on the bank and the savings. The interest pay-out also happens on a half-yearly or yearly basis. 

When you open the saving bank account, enquire about the different accounts you can open. Apart from the standard account, there is a joint account, zero-balance, accounts under various Government schemes, women, senior citizens, and minors.

How Is A Home Loan Beneficial?

A home is where you can relax and reside safely after a hectic day at work. It gives you peace of mind and ensures you get the freedom to perform your chores without any interruption. You aim to lead a secure and peaceful life with your family without worrying about insecurities and giving them utmost attention.

Banks and financial institutions are offering a home loan to every citizen of the country to fund the cost of the property. You can borrow a loan amount according to your affordability and repayment capacity and repay it with interest in equated monthly instalments. You can apply for a loan for constructing and renovating the house as well.

Tax benefits

To encourage more people to buy a house, the Indian Government provides a tax deduction on the principal and the interest payable on the housing loan. You are eligible to claim a tax deduction of up to Rs. 1.5 lakh on the loan amount and Rs. 2 lakh on the interest in a financial year under Section 80 C and Section 24 B of the Income Tax Act, 1961. The deductions are only available after the completion of construction.

Convenience

You can receive quick approval when you apply for home loan, even before selecting the property. It helps you arrange funds and pay the seller immediately without wasting time. You can also get attractive interest rates with affordable repayment options from the bank or lender.

EMI repayments

You can repay the loan from your bank account in affordable monthly instalments. Set the auto-debit feature by giving standing instructions to the bank and saving time. You can also avoid the hassle of signing and procuring cheques for the payment.

High repayment tenure

You get a high repayment tenure which can go up to 30 years even when you apply for home loan online. These days, you can visit the bank website or download the official banking app to access all their banking and finance products without seeing them personally. You can reduce the burden of instalments by extending the loan tenure.

Attractive interest rates

When you avail of a home loan in India, you get it at a low and attractive interest rate compared to other unsecured loans. Generally, the interest rate ranges between 7.35% to 8.50%, making it an affordable loan scheme.

Security

Buying a home is one of the biggest financial commitments. You need to pay the EMIs on time and ensure you have the repayment capacity to finance the loan. It gives you mental satisfaction and a sense of accomplishment. You can secure your future by applying for a home loan online and reducing the paperwork.

Tips For NRIs Interested In Buying A Home In India

Non-Resident Indians (NRIs) may use NRI home loans to finance their plans to buy a home in India. However, the mechanism should also ensure that the Foreign Exchange Management Act of 1999 (FEMA) and related RBI regulations get followed because of the cross-border remittance requirements. As a result, when applying for a home loan for NRI in India, NRIs must keep the following points in mind:

• Home loans are available for a wide range of residential properties, including new construction and ready-to-move properties. In addition, a home loan can get used to finance the purchase of a plot, building works, and maintenance and improvement costs. However, under current FEMA legislation, an NRI gets no permission to purchase agricultural land, plantations, or farmhouses, among other things.  

As a result, even if an NRI wants to be a co-borrower, no loan can be obtained for such a house. 

• According to RBI regulations, an NRI home loan can only get repaid with NRI accounts, like NRE and NRO accounts. Apart from debits from an NRI account, a foreign money transfer from abroad may get used to credit the Home Loan directly.
  
  
• An NRI should prepay their NRI home loans in the same way that residents can. However, credits into the home loan account must come from the borrower's NRI accounts or foreign remittances to meet the standard repayment conditions.
  
  
• Banks typically charge slightly higher credit spreads due to the higher risk perception of the person staying out of the region. As a result, the home loan interest rate for NRI is slightly higher than for locals. If an NRI returns to India with the aim of settling, the loan account must be converted to a residential home loan so that lower interest rates can get obtained.
  
  
• Compared to a standard home loan for Indian citizens, NRI home loans come with additional paperwork requirements. You will need to submit a copy of your passport and a valid visa along with the application form. A General Power of Attorney (GPA) will need in favour of a resident Indian with whom the bank can interact in India.
  
  
• Though NRIs may jointly purchase a property in the name of another NRI, this is not possible with a resident Indian or those who are not permitted to buy property in India.