Investment is a key to secured future. However, not many people are aware of the best avenue to invest in and hence prefer to park their money in savings account. There are many banks and post offices offering savings account online to promote convenient banking experience to customers. The savings account online accrues interest on the deposited funds over time. Also, the interest rate on savings account online tends to be higher because their operating cost here is less than the brick-and-mortar banks. In India, there are many banks and post offices which offer savings account online. To help you choose the best avenue out of the two, here’s a sneak peek into the factors that differentiate normal savings account and post office savings account:-
A regular savings account is an interest-earning deposit account provided at the bank. A post office savings account is similar to the regular savings account which can be opened at the post office. The funds invested in the post office savings account also accumulate interest on all investments made by the account holder. However, there might be a difference in the interest rate that both these avenues offer on deposited funds.
A bank’s savings account earns a moderate interest on your savings. They also limit the number of withdrawals an account holder can make in a month and may even charge a fee for not maintaining minimum Monthly Average Balance (MAB). A post office savings account is therefore free from most all these clauses. It can be opened by depositing a minimum amount of Rs 20/-. However, the cheque facility is available if an account is opened with Rs 500/-. For cheque facility, the minimum balance required to be maintained is Rs 500/- and for non-cheque facility account, the minimum balance required is Rs 50/-.
A post office savings account interest rate is 4% p.a., which is similar to what most banks offer on their savings account. In post office SA, account holders have the right to withdraw the funds either fully or partially, as and when the need may arise. However, in bank savings account, it is easy to transfer funds from one account to the other but some banks impose federal limits on the number and types of withdrawals allowed per statement cycle. You can make as many deposits as you wish, but government restricts certain types of electronic withdrawals (except for ATM withdrawals) and transfers to six per statement cycle.
Both the bank and post office savings accounts are preferred by investors looking for a risk-free investment, however, people in rural and semi-rural areas greatly rely on post office savings account while the investors in metropolitan cities prefer to keep funds in a bank’s savings account.
The process to open the bank and post office savings account is simple and convenient because these accounts do not have any option of a lock-in period for funds. Also, account holders can access banks savings account online with mere simple few clicks and make necessary transaction instantly.
The interest earned on a savings account is taxable as per the account holder’s income tax slab rates. But, the deduction u/s 80TTA is permissible on interest from savings account with a maximum of Rs.10,000/- p.a. Only individual entities and members of Hindu Undivided Families (HUF) are entitled to this deduction. The section 80TTA of the Income Tax Act further states that an interest up to Rs 10,000/- earned from all savings bank account is tax-free. This is applicable to both bank and post-office savings accounts.
So all in all, both the bank and post office savings account are the safest mode of investment. The major difference between the two is that people in rural areas are major beneficiaries of the post office savings account while people in cities rely on a bank’s savings account. Secondly, post office SA does not impose any transaction limit whereas some banks have set the limit of transactions allowed per statement cycle.
Are you planning to get a personal loan to fund your daughter’s wedding? You can consider getting it either through bank or NBFCs (non-banking financial institutions). Both these platforms offer personal loans at attractive interest rates. But before you apply for it, you must calculate your loan eligibility and EMIs in advance to plan your expenses wisely. Here a personal loan calculator can be best put to use.
A personal loan calculator is a useful online tool that enables you to plan how much money you should borrow as a loan based on your repayment capacity. By using this tool, you can also calculate the monthly loan EMIs and the interest rate that you would be paying to the bank/NBFC within a stipulated period of time to settle the loan. You can make as many searches you want using this tool with the different loan amount, loan term and interest rates to reach out the best loan scheme that matches your requirements and budget.
Here’s a complete list of what you CAN find and what you CANNOT find using the personal loan calculator.
Here’s what you CAN find using a personal loan calculator :-
- Whether you are eligible to apply for a loan or not.
- Your monthly loan EMIs payable during the tenure.
- The interest rate you would be paying on the loan (it varies across banks in India and also on your profile & the principal amount you are likely to borrow as loan).
- Amortization table displaying periodic loan payments along with the principal and the interest amount that comprise each payment till the time the loan is paid off at the end of its term.
Here’s what you CANNOT find using a personal loan calculator :-
- Whether your loan application will be approved or not.
Banks/NBFCs also provide a pre-payment facility for customers wherein they can pre-pay the loan amount at one go. It is a very useful window with which a customer can save a lot of money that is otherwise spent in paying higher interest (in unsecured loans) and continued EMIs throughout the loan tenure.
An online calculator comes to rescue to those loan applicants who wish to get a loan after proper planning and research. Getting a personal loan without considering your repayment capacity will result in increased EMIs that would disturb your finances in the long run. This is why you must instigate a thorough research on the list of personal loans offered by the banks and NBFCs.
In addition to this, you must also check out the interest rates offered by several banks on a personal loan, consider choosing your loan term wisely, and always borrow the amount that you can easily repay. A personal loan is one of the best solutions to meet immediate money requirements as it involves minimal documentation, quick money disbursal, and pre or part payment facility that will help you save big in the long run. So why wait! Apply for the loan today to meet unexpected money related problems.
An important point to note: A personal loan is an unsecured loan and that is why would involve higher interest rates as compared to other types of loans. So choose the lender that offers you loan at rates that suits your requirements. You must also improve your credit score to easily qualify for a personal loan. You can find personal loan calculators on the bank’s official website and also on the several third-party websites. However, to get the most accurate results, you must always use online calculator of the particular bank from where you are planning to get a loan.
The significance of gold in India has grown by leaps and bounds in the heart of Indians and homes alike. Gold, in Indian history, is more than an investment. It is an integral part of Indian culture and traditions as gold jewelry is passed on from generations to generations to keep the family legacy alive. Also, gifting gold is considered auspicious in India. In addition to this, many people in the country find gold as a safe investment and use it during financial crisis.
Although the price of gold is displayed at every jeweler’s shop in India but to be sure of the price of gold jewelry and coins simultaneously, it is wise to first calculate the rate of gold by following the five steps mentioned below in this article:
- Determine the current value of Gold: This is important because there is a formula that should be used to calculate the per gram value of gold. However, the only variable in the formula is the current value of gold that you can find using the internet. Note that gold rates that you see online are for 24 carat of gold – the purest form of gold. However, for gold jewelry, 22 karat gold is used.
- In the second step, divide the current gold rates in dollars per ounce by 31.1 to get today’s gold price per grams. Let’s suppose, if today’s gold price is $1600/ounce, then present gold rates will be $1600 divided by 31.1, which will be equal to USD $ 51.45 per gram.
- Categorize your gold in Karat to access its value: This means, keep all the gold coins on one side whereas the jewelry, and other items on other respective sides. You can use a magnifier to see the mark on the gold. In case it is not visible, you can even do the acid test or Skey test to check the gold karat, whether it is 18K, 22K or 24k. Once the assessment is done, keep the gold coin and jewelry in a separate group.
- For each group including the coin and the jewelry, divide the karat by 24 and then multiply it by the current gold rates per gram. For example, if you have 10k gold and the value of gold on that particular day is USD $1600/ounce or USD $ 51.45 per gram, then the price of your scrap gold will be 10k = 10/24 = .4167, that means USD$51.45 x .4167 = USD$21.44 per gram.
- To calculate the price of gold jewelry, the following formula can be used:-
Gold jewelry price = (Gold price/gram) * (weight in gm) + (making charges) * (Weight in gm) + GST
So if, the price of 22k gold is 2350/gram, the purchase weight is 2gm and making charges is, let’s suppose, Rs. 200/gm, then the price of gold ornament will be =2530* 2+200*2 =5660 +GST (3%) = Rs. 5828.
In India, the demand for gold is escalating and so is the price. Therefore, to invest in the finest gold or to sell gold for maximum returns, it is good to do a bit of ground work. Note that, not all jewelers in the country offer gold at similar rates because of the making charges (that varies from one shop to the other), and discounts (that many gold sellers offer from time to time to clear the stock). Also, some shopkeepers buy gold in bulk at a lesser price and thereafter sell it at a reduced rate too as compared to other shops. Therefore, it is wise to do some research on gold rate and the type of gold you want to invest in.
If you are in dire need of money and are looking to get a secured personal loan quickly, there are not many places you can resort to. This is because firstly applying for a secured personal loan can never be quick. Secondly secured personal loans also require you to provide a collateral – may be a home or jewelry, that you may lose if you default on the loan. Moreover, if you don’t have an asset to provide it as collateral, or you don’t want to get loan against your asset and keep it on stake, you’re ultimately left with limited choices that include:-
Title loan companies: – These companies provide a secured personal loan by claiming the car that you own. They keep the label while you can keep using your car. Depending on the year of purchase, condition and the type of your car, the amount of loan is settled – which is typically not more than half the price of your vehicle with the interest rate being 25%. These loans are mandatory to be repaid within 30 days or it can also be renewed for an additional term by paying the fees. If the borrower fails to pay off the loan or renew it, the lender can reclaim the vehicle. If the borrower still fails to pay off the loan and other charges associated with it, the lender has full authority to sell the car to make up for the loan amount.
Pawn shops: They also provide short-term, secured personal loans against your property but at a high-interest rate and fees. To initiate the loan process, you will have to display property; a broker at the shop will then evaluate and fix the loan amount that you can get, but it will be less than the actual value of your property. It is not just the property, Pawn shops also offer loan against jewelry, electronic equipment, and small piece of equipment, musical instruments, even motor vehicle but you cannot use the asset till the time you settle up the loan amount in full. The tenure of personal loans offered by the pawn shops is not more than one month and if you do not repay the loan on time and the asset is still with the lender, the broker has full authority to sell the asset to extract the loan amount.
Check-cashing stores: These also offer secured personal loans but in a different way. Firstly they offer loan amount in cash or advance, secondly, you have to give the lender a check for the loan amount as a security along with the lender’s fees. Thirdly, the loans offered by these stores are not more than $500. The lender will keep your check with him/her till the time you pay off the loan or renew the loan term by paying the fees. If you do neither of these things, the lender will deposit your check in the bank to extract the loan amount. In case your cheque is bounced, you will have to pay more dues to the lender and the bank as well.
Conclusion: These secured personal loans are intended to provide immediate funds to those in urgent need of money at a higher interest rate. The short term secured loans offered by these companies can help you a lot if you use this amount for the right purpose and pay them off on time. One word of advice: Always do a thorough grounding, and make wise judgment when getting a loan from these lenders.
While availing a loan, the hardest part is to decide the type of interest rate one should choose. Ideally, banks/financial institutions provide many types of interest rate including, fixed interest rate, floating rate of interest, resettable fixed rates, partly fixed and partly floating rate of interest. Of all, the most prominent ones are:-
- Fixed Interest Rate: As the name suggests, the fixed rate of interest remains fixed throughout the loan period. However, this rate of interest is generally 1% – 2.5% higher when compared to other types of interest rates. Also, only a few banks offer the fixed rate of interest on loans.
- Floating Rate of Interest: Also known as adjustable, flexible or variable rate of interest. The floating rate of interest fluctuates as per the market or an index. So the borrower applying for this type of loan has to bear the risk of paying higher interest rates when the lending rates climb and can also pay lower interest rates when the lending rates drop by any chance. Loans with floating interest rates are slightly cheaper as compared to loans with a fixed rate of interest.
How is Interest Rate Calculated on a Fixed Rate Loan?
The interest on a fixed rate loan is calculated using the following formula:-
P = (R/1-(1+R)-N)Loan
P is the regular payment you make every period
R is the rate of interest per period
N is the number of periods
Loan is the total loan amount
To calculate R, the rate of interest, take the yearly rate of interest and divide it by the number of payment periods in a year. For instance, if you pay on a monthly basis and your loan interest is 4%, then your interest payment will be (0.04/12) = 0.003333 or 0.3333%.
To calculate N, take the loan term in years and multiply it by the periods in a year. Let’s assume your loan term is of 20 years and you make your payments monthly. In such a case, the N would be 12×20=240. Banks and other money lenders always give borrowers the option to choose between fixed or floating rate loans – as per their requirements.
Those who find this calculation difficult can use EMI Calculator to calculate the interest rate. It is an online tool that helps you to calculate the loan interest rate instantaneously. An EMI calculator has a user-friendly interface and, therefore, is easy to use. To calculate the interest rate, you simply have to provide the required information and get the results directly. You can experiment with the EMI calculator by adjusting the sliders. Apart from providing the exact information, you can change the amount, interest rate and loan term to get an EMI that is most suitable for you. You can recalculate the loan EMI as many times you want by using EMI calculator online.
Why is a Fixed Rate of Interest Loan Better?
As compared to floating interest rate, fixed interest rate loans are always a better option. Firstly, it does not carry any risk or uncertainties. Secondly, it is good for those who want to play it safe and don’t wish to pay more in any circumstances. The fixed rate of interest also means that borrower will not be affected by any increasing rates. However, the fixed rate interest loan is less prominent in India and also comes with a resettable clause.
All in all, loans in India have appeared as a boon for those who are in dire need of money to buy a new car or property, for their son/daughter’s wedding/education and other such requirements. But before getting any loan, one must decide on the type of interest rate, the processing fee and the monthly EMI they want to pay on a regular basis to the lender. Remember, the lower the loan interest rate, the lesser will be the EMI. Therefore, the borrowers who are interested to apply for a loan must choose the loan interest type wisely before borrowing the money from the lender.