Planning on investing in a term Deposit? Well, it is good way to invest your funds and enjoy higher interest paybacks. While starting a fixed deposit account is pretty straightforward, you may be confused about whether you should opt for a short-term fixed deposit or a long-term fixed deposit.

Which one can bring you bigger and better benefits? The answer to this will vary depending on your financial standing and several factors. These include aspects such as the interest rates, the amount you deposit, fees levied by the bank and also the term that you can commit for.

Long-term fixed deposits generally have a tie-in period of a minimum of 12 months and can go up to even 10 years. Due to the longer lock-in period, it does carry a much higher interest rate as compared with other types of fixed deposits. You will enjoy a much high rate of interest upon opening a fixed deposit with a longer term period.

Shorter-term fixed deposits come with a lock-in period that ranges anywhere from 1 to 12 months. The short-term carries the benefit of knowing that you can access your money soon enough. You also have the opportunity to invest your money in better investment options if you do come across better-value investment options over the period. However, the interest rate is not as attractive as a long-term fixed deposit.

What’s best?

A long-term fixed deposit is a great pick if you have several different assets that can be quickly liquidated in the event of a financial emergency. As suggested above, the long-term lock-in will mean that you cannot access your finances for a longer tenor and cannot turn to the same when you need some quick cash withdrawals.

Even if you do, you will have to pay a penalty and may lose the amount gathered in interest. Thus, long-term fixed deposit is a better option if your financial planning includes a diversified portfolio. It is suitable for you if you have long-term goals such as funding a wedding ceremony in the years to come or creating a retirement fund.

Typically, a short-term fixed deposit is a good option if you have a goal that you must fulfill within a shorter term. It is also a most suitable pick for you if you are new to investing in fixed deposit and do not want to tie down your money for a very long tenor. For example, if you plan on taking a trip in the near future, then a short-term fixed deposit will bring good interest returns while also keeping you from spending it.

One can witness the growth in medical expenses in the last few decades for medical facilities. Most people ignore health insurance plans, but they form the preliminary step in your financial planning.

A health insurance policy gives you support for your general well-being, along with an added financial assistance to you and your family in times of need. Such steep costs of healthcare can wipe out all your savings and even leave you in debt. Getting a mediclaim which can be like critical illness insurance or cancer insurance is the need of the hour.

Prima facie as simple as it appears, there is a confusion among the vast majority in selecting a fixed benefit health insurance or indemnity health insurance plans. Both plans differ significantly in premium amounts, the sum assured, medical treatments covered, and much more.

Fixed Benefit Health Insurance

Fixed benefit health insurance does not indemnify the insured for the medical expenses so incurred. Instead, it just pays a fixed amount [the amount of sum insured] when the ailment strikes. Such diseases are predetermined at the time of availing the health insurance plans. Fixed benefit health insurance help in bridging the gap between your regular insurance plan and those ailments not covered by it. You can opt for a fixed benefit health insurance along with regular health insurance to achieve blanket protection for all your medical needs.

Availing critical illness insurance like cancer insurance or heart insurance for pre-existing medical conditions offers all-round protection along with an added peace of mind. It removes the sub-limit that most policies have generally mentioned in the fine print, covering non-medical expenses like travel and nutritional requirements along with loss of livelihood during treatment and recovery stage. You surely have important things to worry about when your loved ones are undergoing medical treatment.

Indemnity Health Insurance

Indemnity health insurance or commonly referred to as ‘fee-for-service’ is a traditional form of health insurance. The insurance company pays for the medical expenses incurred subject to specific terms and conditions varying among different policies. Costs incurred are reimbursed depending on the limits specified in terms of your policy. You can select the medical professional of your choice along with the various treatment facilities available as per the health insurance policy.

It is imperative to know about deductibles and co-payment clause that may be attached tour indemnity plan. A deductible is where the insured pays a pre-decided amount at the time of claim. In contrast, under co-payment, a certain percentage of hospitalization expenses are borne by the insured. Indemnity plans are best suited for those who like to enjoy the freedom associated with selecting the medical facilities and other services.

Availing a comprehensive mediclaim cover while maintaining a balance between both types of insurance policies is the base logic behind health insurance. Make the best choice of health insurance plans that suit your needs as both types have their unique advantages. Choose wisely!

Credit cards have become a widely used financial product today. They bring to you the convenience of making payments through a plastic card anywhere and at any time. Over and above, you enjoy a range of benefits and offers as a part of this payment method.

So what are cash back credit cards? As the name suggests, cashback credit cards offer you cashback rewards when you make a transaction. The rewards are lucrative and can add to your earnings.

Cashback credit cards make for the most popular type of credit card. This is because of the obvious reason that they let you earn. How does it work? Each time you purchase through you cashback credit card, you receive a percentage of the price that you paid. The cashback may be rewarded to you instantly or at the end of the billing cycle. You must note that cashback can be enjoyed only through eligible purchases. Typically, these purchases are as defined by your credit card issuer.

Redeeming your cashback

There are different ways through which the credit card issuer lets you redeem your cashback

• Statement credit – The most common way used to redeem the cashback is through a statement credit. This means that the rewards are used to lower the credit card bill in the following cycle. The earned cashback rewards is adjusted into the following bill.
• Account Deposit – The direct account deposit allows you to have the cashback directed straight into your bank account. For example, if you have earned INR 2000 as cashback reward through your monthly eligible spends, then the same value is added to your linked savings or checking account. This is yet another option that is popular among cashback credit card users.
• Gift card or shopping vouchers – Depending on the brand partners, the cashback rewards can be received through gift card rewards for different brands. This can include restaurants, shopping sites, resorts, clothing brands and much more.

It is essential to pick a credit card that meets your requirements. Ensure that you can strike the right balance between your spending while effectively earning through the rewards. Additionally, be mindful of the fees attached to the card and these include the annual fee, repayment duration and more.

Cashback rewards are great if you can commit to making repayments on time and keep all the fees in check. It is most important that you avoid making unwanted purchases while being lured by the lucrative cashback offers.

Mutual fund investments are climbing the charts to being an effective investment avenue for investors. One such variant is the Equity Linked Savings Scheme [ELSS], which is a diversified mutual fund scheme that invests at least 80% in equity and equity-related instruments.

Investing in ELSS can help save tax by allowing investors to claim an ELSS tax benefit under the Section 80C of the Income Tax Act up to Rs.1.5 lakh in a financial year. Additionally, it offers the lowest lock-in period of three years compared to other Section 80C counterparts.

This article looks at the ideal number of ELSS funds you can include in your mutual fund portfolio.

The ideal number of ELSS funds

Typically, an ELSS fund invests in 70 to 100 stocks. So, if you own 5 ELSS funds that means you own around 500 stocks [though not necessarily]. A portfolio with as many as 500 stocks is similar to owning the entire market.

There are around 5000 listed stocks in India, out of which 90% of the total market cap is concentrated on the top 250 stocks. Even if you own half of these 250 stocks, you eliminate your chances of beating market returns. If your aim of investing is to achieve market returns rather than beat them, you can consider investing in an Index fund. These funds charge low expense ratios as compared to ELSS funds.

On the other hand, if you have invested in only one ELSS fund, there is a risk of the fund under-performing. This can, in turn, impact your returns. To diversify the risk across different stocks, you can invest in 2 to 3 ELSS funds, and not more than that. Ensure no common stock holdings are overlapping in various schemes as that can bring down your overall returns during a downward trend.

The investment horizon for ELSS funds

Even though ELSS funds have a lock-in period of three years, mutual fund advisors ask investors to maintain an investment horizon of at least seven years. It is not compulsory to withdraw your funds on the completion of the three-year lock-in period. If the fund is performing well, you can keep continuing to stay invested, as it can give you a better chance of reaping decent yields in the long run.

Most ELSS schemes have a multi-cap strategy allowing them to invest in small-cap, mid-cap and long-cap funds. Thus, when you stay invested for a longer investment horizon, you give your funds more time to weather market volatility and generate good gains compared to short-term.

Conclusion

If you are a new investor looking to invest in mutual funds, you can read more on ELSS v/s mutual fund before you start investing. With ELSS tax saving instruments you can enjoy ELSS tax exemption up to Rs.1.5 Lakh under Section 80C of the Income Tax Act. It is advisable to have not more than two ELSS schemes as part of your portfolio. This can prevent duplication and over-diversification due to overlapping of portfolios of different schemes.

From India’s first electric sport-bike to some advanced looking electric scooters, the two-wheeler industry is ready to introduce a long list of electric vehicles in 2020. In fact, popular manufacturers like TVS Motor Company, Bajaj Auto and Hero MotoCorp are all preparing themselves for their wide range of electric two-wheelers.

But more than the two-wheeler industry, insurance companies are working on their two wheeler insurance so that you don’t get any hurdle while buying or after-buying a vehicle. Here look at some exciting electric two-wheeler that will be launched in India by 2020.

Bajaj Urbanite

Bajaj Auto might have given upon their ability of manufacturing scooters a long time ago, but now the company is set to witness some customers through their launch of Urbanite vertical. It would be the first electric scooter of the company. Till date, you will get only a few fuzzy spy shots, but it’s fixed that Bajaj will launch its first electric scooter under Urbanite brand name.

Revolt RV 400

Revolt RV 400, the first electric motorcycle of Revolt Intellicorp’s claims to be the first motorcycle with artificial intelligence. This two-wheeler lays a claimed range of 156 km on a single charge and a top speed of 85 km per hour, the Revolt RV 400 happens to be presented with many unique features that include a swapping network and dedicated battery charging.

TVS Creon

The TVS Creon electric scooter will be represented as a concept at the last Auto Expo. With a best and sharp attractive design, the Creon will be the best looking two-wheeler at the Auto Expo. TVS says that it will be a performance-oriented electric scooter that will have a range of 80 km on a single acceleration and charge starting from 0 to 60 km per hour in 5.1 seconds.

Hero Duet-E

In 2016 Auto Exp, the Hero Duet-E was showcased as a concept. But, there is no doubt to say that Hero MotoCorp is currently working on a variety of two-wheelers. Recently, Hero MotoCorp chairman Pawan Munjal has confirmed on the news that the company is working on a wide range of electric vehicles and development is underway. The Hero Duet-E would be the first production of an electric scooter from Hero.

Honda Activa 6G

Honda is going to introduce the new Activa 6G in 2020. The upcoming scooter is expected to get an advanced design that will include full-LED headlamp, redesigned body panels and restyled front apron with side turn indicators. On the mechanical terms, the new Activa 6G features a new telescopic suspension and disc brake at the front as an additional option.

These were few two-wheelers that are going to be launched in 2020. But before you get into it, just make sure that you have bike insurance as it will save you from every mishap. This time the Indian market will get a variety of two-wheelers that will attract the eye-balls of many customers in early 2020.

A personal loan is a multipurpose unsecured loan that can prove to be extremely helpful in meeting financial requirements. Banks and other Non-Banking Financial Companies [NBFCs] do not ask the applicant about the purpose behind availing a personal loan. As a result of this, you can change the purpose of your personal loan and use the loan amount as per the situation.

Therefore, a personal loan can be used for various purposes such as repaying credit card debt, managing medical expenses, home renovation, taking care of wedding expenses, etc. Due to this flexibility offered by personal loans, they have gained massive popularity in recent times. With the help of leading financial institutions, it is possible to avail a personal loan online through a hassle-free online application process.

Lenient eligibility criteria, minimum personal loan documents, instant approval, and swift disbursal are some of the added advantages of availing a personal loan with leading financial institutions.

Documents required for a personal loan

The personal loan documents list required to avail a personal loan available at Finserv MARKETS are mentioned below:

• Aadhar Card/Passport/Driving License
• PAN Card
• Bank Statement – Last 3 months

However, if you have a good relationship with the financial institution based on your timely repayments and clear credit records, then the lender may offer you a personal loan based on the detail already available with the lender.

Mentioned below are some tips that can help you avail a personal loan without documents

• You must work towards establishing a good relationship with your financial institution. This will help you gain the trust of the lender over a period of time.
• If you are applying for a personal loan with the same financial institution, where your main operating account is located, it becomes easier for the lender to evaluate your eligibility for a personal loan. Since the lender is fully aware of all the transactions being made on your account, it helps them assess your creditworthiness.
• Make sure that you have a good repayment history. If you have repaid your previous loans on time, you are at a higher chance of availing a personal loan without documents.
• While availing a personal loan, you should make sure that you have a good credit score. This will allow you to avail a personal loan at a comparatively lower interest rate as lenders may consider you a low-risk borrower.
• Make sure that you do not miss any payments associated with the financial institution where you are applying for a personal loan. Any missed payment would reflect your incapability of handling finances and therefore your lender would ask you to provide concrete income proof.

In case you do not have any income proof documents such as salary slips, IT returns, etc., you can avail a personal loan through the following ways:

• While applying for a personal loan, you can submit the latest Form 16 as the income proof.
• You can also submit any other source of income from various business endeavors, housing rent income, bank balance, income of spouse or parents, etc.
• Though personal loans are generally unsecured, you can negotiate with the lender to disburse the loan amount after pledging collateral for the same.
• If you have had a long-standing relationship with your lender, then you may not be required to submit any income proof documents while applying for an instant personal loan.
• You can also assign a guarantor while applying for a personal loan. The guarantor will be required to submit proof of his/her income and guarantee the payment of the personal loan if there is any default.

Now that you are well aware of some important tips that can help you avail a personal loan without documents, let us have at the eligibility criteria for a personal loan:

Eligibility criteria for a personal loan

The eligibility criteria for a personal loan varies from one financial institution to another. However, most loan providers have lenient eligibility criteria for personal loans. Some of the most common parameters are mentioned below:

• You must be an Indian resident
• Minimum 21 years of age
• You must have an Indian bank account
• You must a valid Indian ID proof

FAQs

How long does it take for the disbursal of the loan amount?

Nowadays, with the help of digitization, borrowers can compare various loan offers online and settle for the one that best suits their needs. The application process has become completely hassle-free and the loan amount is disbursed instantly post-approval.

What is the repayment process of personal loans?

Personal loans have easy repayment process. Though the tenure of a personal loan is not too long, it has affordable EMI options. Hence, it has become easier to repay these loans, thereby attracting more and more people to choose it as a feasible option.

What are the factors to consider while availing a personal loan?

Interest rate is one of the major factors that you should keep in mind while availing any kind of a loan. Lower the interest rate, lower is the cost of borrowing in the long run. Nowadays, with the help of leading Non-Banking Financial Companies, it is possible to avail instant loans at the most competitive interest rates. Additionally, you should also make a note of the processing charges, late payment penalties, and other hidden charges before availing a personal loan.

When you avail a personal loan, repaying it should be your first priority. Avoid spending money on any other purchases until you repay the loan. Make sure that you do not miss any EMIs. Making timely repayment will also help you maintain a good credit score. Hence, you should always look forward to managing your expenses wisely in order to make timely payments of your EMIs.

Defaulting on a personal loan will impact your credit score negatively, thereby hampering the chances your personal loan approval in the future. Based upon the loan amount that you borrow, you should calculate your monthly EMI with the help of an online EMI calculator. This will give you a better idea about how quickly you can repay the loan.

It is an instinct that makes most people think of their children when naming their life insurance beneficiary. Though it makes complete sense, is it ideal to choose a minor as the beneficiary? If your child is a minor, they won’t be able to access the money until they turn 18 or 21. You have to find a better way to provide for your kid and make the death benefit easily accessible to them.

Let’s look at some of the advantages and disadvantages of naming a child as a life insurance beneficiary:

Can a Minor Be Named as Your Life Insurance Beneficiary?

Yes, as the parent you can name your child as the beneficiary to your life insurance. But if you were to pass away while your child is still a minor, the death benefit won’t be given to your child. A guardian will be appointed to manage the funds until your child doesn’t come of age. The process of appointing a guardian and transfer of the death benefit may vary. It is best to discuss this with your insurance company and how the events will unfold in case you name a minor as your beneficiary.

Advantages of Naming a Minor as the Beneficiary

1. Financial Stability

Your child will eventually get access to the death benefit and will be financially stable in life. The life cover will eliminate the need of taking a loan for higher studies or to care of their basic necessities until they are settled.

2.  Better Choice

As parents, your child is the best choice to be your insurance beneficiary. They are still dependent even if they have reached the legal age. It will take them time to get financially independent but till then a death benefit can provide for them.

Disadvantages of Naming a Minor as the Beneficiary

1.  No Access to Money

Your child won’t be able to access the money until they come of age. They would have to take care of their expenses by depending on a family relative till they turn 18 or 21 to become independent.

2. Funds Managed by Someone else

The death benefit will be managed by a guardian appointed by the court. You will have no control on who gets picked as the guardian and is in charge of the money.

Though your child may not be the perfect pick for being your life insurance beneficiary, you could entrust the money with someone who is reliable. But if you do not know anyone who is dependable then you can set up a trust that will hold the money for your child. While deciding your life insurance beneficiary it is advised to discuss the possibility of setting up a trust to hold the money.

Thinking of purchasing your first car insurance policy? First, gloss over these numbers to know why you need to have one at the earliest!

In the calendar year 2018, the Indian states and Union Territories reported a total of 4,67,044 road accidents. Even though India is a signatory of the Brasilia Declaration, wherein it intends to bring down the numbers by 50% within 2022, it remains a far-fetched objective.

To account for it, however, the Indian government has amended the Motor Vehicles Act, 1988. According to this amendment, traffic fines on all traffic violations have been hiked. The revised challan rate on uninsured vehicles is Rs. 2,000.

Now that you are aware of its necessity, let us walk you through some tips which are imperative for every first-time insuree.

Tips to Follow Before Securing Your First Car Insurance Policy

When you are purchasing your first vehicle insurance policy, it is crucial that you go through the points which are discussed below. These are the following:

1. Choose Which Type of Car Insurance Policy You Want for Yourself

The first step is to learn about the different car insurance policies available in the market. There are majorly 2 types of car insurance present in India – a) Comprehensive Car Insurance & b) Third Party Car Insurance.

Know more about the difference between both the types in the table below with their specific features.

You can also opt for add-ons over and above your preferred car insurance policy. These include –

1. Zero depreciation cover.
2. Consumable cover.
3. Tyre protection cover.
4. Return to invoice cover.
5. Breakdown assistance.

2. Look for Different Car Insurance Providers and Their Service Feedbacks

After you have decided which insurance policy you want to purchase, it is time for you to choose an insurer. You can find about their service promptness and how convenient their service is through social media comments, Google reviews, etc.

3. Check Out the Buying and Claiming Process of Car Insurance Policies with Different Insurers

Seek insurers that have a hassle-free along with fast purchase and claim settlement facilities. It is best to have an insurance policy as early as possible to ensure you can take your car out for a drive and not wait for a prolonged period for your insurance policy to be activated. Also, a hassle-free and fast claim settlement process would allow you to avail financial assistance at the earliest in the event of an accident.

4. Learn about the Claim Settlement Ratio of Different Insurance Providers

A substantial ground on which you can make your decision about an insurance provider is their claim settlement ratio. It is the ratio of the number of claims they have settled, and the number of claims reported to them.

5. Find out about NCB Policies of Various Insurers

What is No Claim Bonus (NCB) ?

NCB or no claim bonus is the discount you receive on premiums for a year if you do not make any claims in its preceding year. Although it will not be applicable on your first premium, it is necessary to know the NCB rates of different insurers beforehand to make the most out of your car insurance policy.

6. Look for Premiums as Per Your Affordability

Premiums are what you need to pay every year to keep your insurance policy activated. Check the premium of third party or comprehensive or zero depreciation car insurance offered by various insurance providers and check for the discounts they are providing on those premiums. Always choose the car insurance based on your premium affordability and coverage provided by the insurer so that it does not burn a hole in your pocket.

7. Check for Policies with High IDVs

What is meant by IDV?

IDV stands for Insured Declared Value, which is the highest sum assured by an insurance company as compensation in the event of theft or complete damage due to an accident. Look for policies that offer high IDVs and options to customise such value to maximise your benefits.

In addition to these, if you want to maximise your benefits from an insurance policy, check network garages and voluntary deductibles under an insurance policy before purchasing.