PF Withdrawal Online by Providing IFSC Code, UAN Details

One can easily withdraw money from their Provident Fund (PF) account online by providing IFSC code, Universal Account Number (UAN), mobile details and PAN card.

After the introduction of the online Employee Provident Fund (EPF) facility, withdrawing money from PF accounts has become a much simpler, hassle-free and convenient process. Before the launch of this facility, it used to take several months for employees to get their PF money. PF can be withdrawn under 3 categories: Full Withdrawal, Partial Withdrawal, and Pension Withdrawal Benefit. The withdrawal request can be made through the UAN website. It is necessary to have Aadhaar linked with the EPF account to avail this facility without any hassle.

After the PAN-Aadhaar linkage, it is now mandatory to link PF with Aadhaar

The Employees’ Provident Fund Organisation (EPFO) has now made it mandatory to link Aadhaar with the Universal Account Numbers (UAN) of provident fund members.

After attending a Tiranga Yatra organised by the EPFO, Bandaru Dattatreya, the Union Labour and Employment Minister said that the UAN, apart from Aadhaar, must also be linked with bank account, IFSC code and mobile number as well.

TDS - Tax Deducted at Source for Non-resident Indians

Non-resident Indians battle many challenges in India and high tax deduction at source is just one among them. TDS can be annoying considering the innumerable taxes that we all deal with already. When tax is deducted at source, it becomes a mandatory method of collecting taxes and makes the taxpayer feel choked and pushed against a wall. Moreover, income tax is deducted in the way of TDS for an entire year in advance and later tax returns are claimed which is a tedious process for both Indian nationals and NRIs.

What is TDS?

TDS stands for Tax Deducted at Source. It is an indirect tax collecting method followed in India according to the Income Tax Act, 1961. Managed by the Central Board of Direct taxes, TDS, falls under the Indian Revenue Services.

TDS norms for Indian Nationals

Indian nationals enjoy low TDS rates compared to NRIs. Salary, interest on securities, land rent and any other income earned by Indian Nationals who possess Permanent Account Number (PAN) is taxable at about 10% of the amount earned. Whereas, income earned through lotteries or any other games of that sort is taxed at 30%.

TDS norms for NRIs

More often than not, in many articles nowadays you might read about the whooping TDS rates for Non-resident Indians. TDS rates for NRIs ranges from 10% to 30%. Apart from general taxable income like salary, rent or interest on securities, NRIs are taxed for various other income categories like earnings under National Savings Scheme, repurchase of Mutual Fund and royalty income.

Changes made to NRI tax norms in Budget Meeting 2016

Addressing high TDS rates for NRIs, The Central Board of Direct Taxes (CBDT) reformed the taxation norms which now allows NRIs to avail lower tax rates under Section 206AA of the Income-Tax Act. CBDT has included a new rule, section 37BC, according to which non-residents can claim TDS benefits even without submitting their PAN. Previously, residents had to submit PAN under section 206AA to avail any tax benefits. In Budget Meeting, 2016, Arun Jaitley, Finance Minister confirmed that PAN is not mandatory for non-residents to enjoy tax benefits. In his speech, Jaitley addressed the 7 pillars which will support India’s economic growth and tax reforms to reduce compliance burden was one among them.

Saudi Indian Business Network (SIBN) recently conducted a lively debate with experts in the taxation industry to explain the budget meeting in layman’s terms. During the debate Vijay Soni, treasurer, SIBN, spoke about taxation policies in India and rationalization of TDS for NRIs without PAN. Echoing him, CA, S. C. Lekhwani, a senior practitioner from India joined the debate via video conferencing and explained the taxation provision for NRIs and foreign investors in India. After years of debating and procrastinating, The Government of India has ruled in favor of the NRIs which is definitely a good news for all the non-resident Indians out there.

Reaping the profit out of compound interest

Did you know you compound interest can help you increase your savings? Yes, it can do wonder by adding to your existing savings. Compound interest can help you earn more than what you invested initially and fulfill your long term savings goals by providing higher and assured returns.

So, what is compound interest?

It is a kind of interest on interest; an addition of interest to the principal amount of your deposit.  Compound interest which is added to the principal amount of your deposit or a loan, helps a loan or a deposit grow at a faster pace. Compound interest is calculated on the initial principal amount as well as on the accumulated interest of a deposit or a loan. This addition of interest to the principal as well as accumulated interest of the previous years  is known as compounding. The compounding frequency determines the interest you will receive on your deposits. The higher the frequency of compounding, the higher the compound interest is.

Compound interest rate is particularly beneficial for investing in fixed deposits. By using a compound interest calculator, you can calculate the compound interest on your deposit or a loan.

How compound interest helps you earn more:

You can be rich gradually by investing at compound rates of interest. The compounding rate of interest may work for you in the following ways:

Start your investments early:  When your start your investments early in your career at compound rate of interest, the possibility is very much there that it will add to your returns. So don’t wait, make your as early as possible to add more value to you your investment

Invest regularly:  Make it a habit to make regular investments. In the initial years, you may not be able to see the difference. But if you keep on investing at compound interest rates, you will see the difference. Investments giving lower returns in the initial stages may produce higher returns in the long run. Always, it’s important to look at the bigger picture, not short term goals. Besides, a proper asset allocation plan will also help you add more value to your savings  by managing the risk factors. A well – thought out asset allocation plan always helps in long term wealth generation.

Stay invested for a longer time: It is very important to be patient and keep your investments intact for a longer time.  The magic of compounding works only when you invest your savings for a longer duration. Do not withdraw or touch your savings, unless you really need them. Let them remain invested for a longer time and grow. Although, you will witness slow progress in the initial stage, it will pay off in the long run.

So, if you are intending to earn more profit from compounding rate of interest, invest regularly and invest for a longer duration. Make your investments at the early stage of your life and give time to your investments. Definitely, compounding will show its magic and double your returns.

Unusual Investments that Will Ensure a Comfortable Post Retirement Life!

After working hard for years, everyone deserves a peaceful comfortable life. But a post retirement life with no or limited income can be hard. The best way to ensure a good post retirement life is to invest in the right policies. Surprisingly, investments like Fixed Deposits, Gold and other investments can ensure a good life post retirement. Listed below are some unusual investments that might help you sail a lot smoother during your post retirement days.

Fixed Deposits:

Fixed deposits are term deposits wherein money is deposited as a single payment for a certain period of time and interest is earned on the same. The FD Interest Rates depends on the amount deposited and the deposit term. Fixed deposits can actually act as a retirement investment tool. FD can act as a retirement tool if you plan it the right way. Investing idle savings in an FD when you are earning a regular income can benefit you later in life. It can be planned in such a manner that the Fixed deposit matures during the time of your retirement thus granting you a lump sum amount for your post retirement days.

Precious metals:

Investing in precious metals is a wise decision and can also serve as a source of finance post retirement. The price of precious metals is always inflating thus making your investment a valuable one. Precious metals like gold, diamonds can be purchased in the pre retirement days and this will act as a valuable asset of a much higher price post retirement.

Real estate:

The value of real estate never goes south. Investing in real estate in your younger days is probably the most unusual but wisest retirement plan ever. This piece of real estate can later be sold off post retirement or it can act as your shelter.  Since the price of real estate is always inflating, this investment plan will never fail you.

Emergency fund:

It is important to have an emergency fund irrespective of your 

age. Small savings over a longer time in an emergency fund can prove to be very valuable during tough times like a medical emergency, house repair, etc post retirement.

Specific health insurance plan:

With old age comes old-age ailments. Having a health insurance plan that covers a particular ailment can be very beneficial. For example, if you are suffering from cardiac-related ailments, it is best to choose a Cardiac health insurance plan that covers for risks against cardiac related ailments. This can save you from huge medical expenses.

Top Bank FDs in India for 2015

Bank fixed deposits have been an investment staple for most Indians and as the year 2015 gets underway, we find these fixed-income options have not lost their allure.

What makes bank FDs a favorite among Indian investors?

Even as financial markets in India develop and diversify, bank FDs continue to win over other channels of saving. The main reasons for this are:

Simplicity - FDs are easy to understand. Money is deposited with a bank for a particular period of time in return for a fixed amount of interest. At the end of the deposit period, account-holders receive their principal investment along with the interest earned on it.

Safety - Banks are considered to be the safest financial institutions in India, operating within a well-monitored framework, under the watchful eye of a regulatory authority viz. the RBI.

Guaranteed returns - Interest rates on fixed deposits are pre-determined and remain unchanged throughout the deposit period. This makes it easy for an investor to calculate how much is due on maturity. Interest rates currently vary between 3.5% to 9.25% for holdings between 30 days to 5 years.

Flexibility - Bank FDs let investors balance returns and liquidity. Deposits can be held with banks for varying tenures, starting as low as 7 days and going as high as 10 years. Additionally, depositors can choose to have interest credited to their accounts at regular intervals (usually every quarter). This creates a regular income stream without affecting the principal investment; this is especially useful for retired persons.

Accessibility - Opening a fixed deposit account is easy with a multitude of options available from different banks located across the country. Paperwork is almost negligible and with more FD schemes being made available online, the application process is now quicker and more convenient than ever before.

Easy to manage - There is little need to monitor bank deposits since investors know exactly how much is due to them on maturity. Interest rates don’t have to be tracked as they remain unchanged from the start to the end of the deposit period. Interest rates only have to be reviewed on renewal.

Best Bank FDs Rates for 2015

Below is a round-up of the highest interest rates offered on different FD schemes across the country and the banks that offer them. Interest rates depicted are the highest returns offered for a particular tenure, on a per annum basis. These schemes are categorised from a collective perspective i.e. all the sectors combined and further broken down to depict the best schemes for each sector i.e. public, private and foreign banks.

(Rates shown are those in effect during the last week of January 2015* for a deposit amount of Rs.1 lakh)

(All sectors)

Medium and Long-Term Deposits

5 years            9.25%              TMB

1 year              9.1%                TMB

1.5 years.        9.00%              Central Bank of India, Dena Bank, J&K Bank, Karur Vysya Bank,

                                                State Bank of Mysore, TMB

2 years            9.00%              Dena Bank, J&K Bank, Karur Vysya Bank, State Bank of

                                                Mysore, TMB

3 years            9.00%              Dena Bank, TMB

4 years            9.00%              Dena Bank, TMB

Short-Term Deposits

90 days           8.80%              ING Vysya Bank

6 months         8.75%              TMB

9 months         8.75%              Indian Bank,IndusInd Bank,TMB,Yes Bank

120 days         8.70%              ING Vysya Bank

60 days           8.00%              TMB

30 days           7.75%              State Bank of Mysore

*Interest rates are subject to change.

★     Best Public-Bank FD Rates 2015

Medium and Long-Term Deposits

1 year              9.00%              Dena Bank, Central Bank of India, State Bank of Mysore

1.5 years.        9.00%              Dena Bank, Central Bank of India, State Bank of Mysore

2 years            9.00%              Dena Bank, State Bank of Mysore

3 years            9.00%              Dena Bank

4 years            9.00%              Dena Bank

5 years            9.00%              Dena Bank

Short-Term Deposits

9 months         8.75%              Indian Bank,IndusInd Bank

120 days         8.70%              ING Vysya Bank

6 months         8.55%              Syndicate Bank

90 days           7.75%              State Bank of Mysore

60 days           7.75%              State Bank of Mysore

30 days           7.75%              State Bank of Mysore

*Interest rates are subject to change.

★     Best Private-Bank FD Rates 2015

Medium and Long-Term Deposits

5 years            9.25%              TMB

1 year              9.1%                TMB

1.5 years.        9.00%              J&K Bank, Karur Vysya Bank, TMB

2 years            9.00%              J&K Bank, Karur Vysya Bank, TMB

3 years            9.00%              TMB

4 years            9.00%              TMB

Short-Term Deposits

90 days           8.80%              ING Vysya Bank

6 months         8.75%              TMB

9 months         8.75%              TMB,Yes Bank

120 days         8.70%              ING Vysya Bank

60 days           8.00%              TMB

30 days           7.50%              TMB

*Interest rates are subject to change.

★     Best Foreign-Bank FD Rates 2015

Medium and Long-Term Deposits

1 year              8.25%              Standard Chartered Bank

3 years            7.75%              Citibank

4 years            7.75%              Deutsche Bank

1.5 years.        7.50%              Citibank, Deutsche Bank

2 years            7.50%              Citibank, Deutsche Bank

5 years            7.25%              Standard Chartered Bank

Short-Term Deposits

9 months         8.25%              Standard Chartered Bank

90 days           8.00%              HSBC

6 months         7.75%              Citibank

120 days         7.75%              Standard Chartered Bank

60 days           7.50%              Deutsche Bank

30 days           7.00%              Deutsche Bank

*Interest rates are subject to change.

How to choose a good fixed deposit scheme

Although Bank FDs make great fixed-income options, they are not as simplistic as they appear. When choosing an FD scheme, don’t look at interest rates in isolation but consider the following as well:

➢     What is the minimum amount required as initial investment? The initial investment required to open an FD account varies from bank to bank. For e.g. HDFC Bank stipulates a minimum amount of Rs.10,000 to open a regular FD account.

➢     What is the penalty levied on premature withdrawals? Banks charge a penalty for breaking an FD i.e making premature withdrawals or closing account before maturity. Penalties are applied to the interest rate and can go up to 2% in some cases. This can greatly compromise expected returns. E.g. a penalty of 1% on a deposit featuring interest rates at 6% will earn account-holders net returns of 5% in case of early closure of the account.

➢     How well does the bank service its customers? How a bank services its customers is important. Some banks delay crediting interest to depositors’ accounts while still others require constant follow-ups for renewals and issuing of fixed deposit receipts. Foreign and private banks are generally known for their promptness in providing information and processing transactions.

➢     Does the bank provide loans against FDs? Most banks grant loans against fixed deposits. These loans feature interest rates which are lower than those of most personal loans. The interest payable on the loan is usually set off against the interest earned on the FD. This is an advantage for those who require funds but do not wish to break their FDs and lose out on returns.

➢     Does the FD feature cumulative options? Under cumulative options, interest earned, instead of being credited to the account-holder, is compounded or reinvested at regular intervals. This maximises returns as interest earned is added to the principal for subsequent interest calculations.

The longer the tenure and more frequent the compounding, the higher the returns under cumulative options. Some banks offer quarterly compounding while some offer half-yearly compounding.

➢     Does the bank offer special senior citizen / employee rates? Most banks offer special FD rates for senior citizens and bank employees. Senior citizens are generally offered an extra 0.25% - 0.50% on rates offered to regular customers while employees generally earn 1% over standard rates. Retired persons can create a regular income stream by having interest earned on deposits credited to their account.

➢     What is the effective rate of return post taxes? Interest earned has to be declared as part of an account-holder’s overall income and is taxable according to the appropriate tax slab. While determining the desired rate of return, taxes should be considered. For e.g. If a depositor earns 9% on a deposit and is liable to pay tax at the rate of 30%, his/her effective rate of interest is 6.3%. This information is useful when comparing schemes to choose the one that provides optimum returns.

(For interest earned on fixed deposits over Rs.5,000 in a financial year, tax will be deducted at source, by the bank @ 10%.)

Outlook for bank fixed deposits in 2015

Given the changing economic scenario in India, the question on most investors’ minds is - ‘Is it a good time to invest in bank FDs?’

Rate cuts are already signalling a downward trend in the interest rate cycle and banks are expected to bring down interest rates on fixed deposits in the coming quarters. Some banks have already acted on this by reducing rates between 25 to 50 bps over the last month.

In view of these developments, long-term FDs appear to be the best option for those who can trade-off on liquidity and lock-in funds for a period of 3 to 5 years at current rates, before returns are lowered in line with market changes. Investing in tax-saving FDs, which have a minimum lock-in period of 5 years will also reap long-term benefits at current rates.

This will prove most beneficial to those in the lower tax brackets or those whose incomes fall below the tax exemption limits. It is also an advantageous prospect for senior citizens / retirees who can lock-in interest income at current high rates for the next few years.

ICICI Bank Pay-Transact Using Twitter Account

ICICI Bank, India’s largest private sector bank has been leveraging social media platforms to offer path breaking banking solutions to its mammoth customer base. In line with this mission is ICICI BankPay, a payments system which allows its banking customers in transferring monies to any part of the country using the micro blogging site. In addition, ICICI bank account holders with an active twitter account can also check account balance, view last three transactions, recharge prepaid mobile and DTH.

By simply following the official ICICI bank Twitter handle (@icicibank), tech savvy customers can transact on Twitter securely, without any hassles. To start using this service, the customer needs to use his mobile number (registered with the bank) along with a Twitter account.

Steps to Register for ICICI BankPay on Twitter

1.    Follow @icicibank from the Twitter account(Also access page twitter.com/ICICIBank)

2.    Now send a direct message(DM) @icicibank #reg <space> <registered mobile number> Eg:#reg 9880312345

3.    You receive a one-time password(OTP)

4.    Now, send a DM with OTP as reference #regotp 123456 to the same handle

This completes the registration procedure for gaining access to ICICI BankPay on Twitter. Now, you can use all the available banking services with your Twitter account.

Transacting on Twitter with ICICI BankPay

1) Transferring money: You can transfer monies online to anyone who has a savings, Twitter account and mobile phone anywhere in India. Use #pay <space> followed by twitter handle of the recipient followed by the amount you wish to transfer and send this information as a direct message to @icicibank. Eg: #pay @xxxx123 1200

The beneficiary receives a tweet immediately notifying him/her of the incoming monies with a unique link. The recipient has to simply click on the link which lands them on a secure page. Here, the beneficiary is required to verify Twitter account details and also provide bank account, IFSC code and redemption code(received via SMS) to complete the transaction. The money is transferred instantaneously.

2) Recharge prepaid mobile: Refill your mobile currency by sending a direct message #GenOTP to the official twitter handle. After you receive the One Time Password, send a direct message again to @icicibank by composing as below.

#TopUp<space>Mobile number<space> Operator Code<space>Amount<space>OTP

Eg: #TopUp 1234566345 Vodafone 125 123456

To ensure correctness of operator code used, send a direct message #operatorcode to the Twitter handle before beginning the recharge process.

3) Recharge DTH account: Akin to recharging prepaid mobile, an ICICI bank customer can also renew DTH by following simple instructions. To begin with, generate an OTP by sending a direct message #GenOTP to @icicibank. An OTP is instantly sent to the registered mobile number by SMS.  Now compose a direct message as below.

#DTH<space>DTH Account Number<space> Operator Code<space>Amount<space>OTP

Eg: #DTH 1234566345 Tatasky 500 123456

To ensure correctness of operator code used, send a direct message #operatorcode to the Twitter handle before beginning the recharge process.

4) Check account balance & View last three transactions: As easy as it can get. Send a direct message #ibal & #itran to check balance and view last three transactions respectively. The bank tweets you back with the required information.

 With such conducive banking options from ICICI Bank, your transaction is just a Tweet away!

Digital Banking all set to change the face of banking in India!

Mobile wallets seem to be reshaping the future of digital banking. These products are becoming increasingly popular with customers who enjoy their ready accessibility as well as ease of usage. Digital Banking includes mobile banking, online banking, as well as the newly launched social media banking.

According to a report by RBI, mobile wallet banking has been on a steep rise from 8.58 million transactions in December 2013 to 23.19 million transactions in December 2014 which marks an increase of 170 per cent. The value of mobile wallet transactions increased by about 233.8 percent from the year 2013 to 2014. Similarly, NEFT and IMPS transaction also been on the rise as also has banking through digital media like Twitter and Facebook.

Pockets, launched by ICICI Bank; takes banking to another level

Recently, ICICI bank launched Pockets, which can be called a digital bank with a mobile interface. Pockets is a virtual place to store money and carry out transactions. The usage consists of downloading the App and getting your KYC details registered to create a username and password. An option of getting a no minimum balance account is also available. Pockets is powered by Visa and allows monetary transactions as well as ticket bookings, bill payment mobile recharge and expense splitting. Pockets is an extremely high-end digital banking platform that allows you to transfer and receive money through channels like bank accounts, mobile numbers, e-mail accounts, Google+, Facebook, Twitter. Chat features too are in-built so as to provide customer support. The pockets account can be used to shop online across all Indian digital shopping platforms. Also, the physical pockets card can be used to pay for your food and other related expenses.

Digital Banking is becoming a preferred option among customers

Digital Banking is becoming increasingly popular among customers. Firstly, due to the extreme convenience that it offers in today’s fast-paced life and secondly because of the host of options that are available to customers. Mobile Wallets have less security issues too since the amount stored in the wallet is the only amount that is at risk as against bank accounts which carry customers’ total account balance. Technological advancements in the banking industry are paving way for a better and more convenient banking experience. Competition among banking players ensures that private as well as public sector banks pick up in terms of technical upgrade and provide users with the best possible financial solutions. Rural Banking too is set to benefit from this since technological advancements will ensure that even customers from rural areas are included in this chain of growth and innovation.

With a huge percentage of Indian population being the youth, connect with them is the primary goal for all banking institutions. This is where Mobile banking and internet banking play a crucial role. Digital Banking requires continuous and steady innovations in technology architecture, user interface as well as security. IT spends for almost all banks has been on the rise and mobile phones are supposed to be the primary banking channel in the coming years.