Executive Summary – Unified Payments Interface (UPI) has been launched to facilitate transfer of funds between persons/organisations via smartphones. You do not need cash/card for money transactions. Once you download the UPI app and register, you can receive and pay money using your virtual address and M-PIN. UPI aims to simplify transactions, arrest tax evasion thereby boosting government revenue and support e-commerce business.

What is UPI?
It is late evening and you are going home in a rickshaw and you realise you do not have money to pay him and there is no ATM around. Chances are that the ATM will dispense only ₹ 500 notes and you will have to argue over change with the auto wallah.
​You have gone on a team dinner with your office colleagues and it is time to split the bill and lo behold you have forgotten your wallet!! It is embarrassing to ask your colleague to pay for you as there might be seniors and juniors around too.
The National Payments Corporation of India (NCPI), RBI and Indian Banks Association have come together to launch the Unified Payments Interface (UPI) which might save you from such situations. The UPI will facilitate immediate transfer of funds from one person to another via a smartphone. It can work without requiring cash or card in hand. It is being showcased as an alternative to mobile wallets and other mechanisms of transfer of funds such as NEFT.

How do I get it?
​You will need a smartphone and the UPI application of any of the participating banks downloaded and installed in it. You have to register your details and a virtual address. For example if your name is Aman and have the UPI application of Punjab National Bank, then you need a unique virtual address such as aman@PNB. The virtual address can be <<your mobile number>>@PNB too. You can then use this ID for receipt and payment of money up to ₹ 1,00,000. This id can be used for person to person transfer or person to organization transfer.

Which banks are offering this method of transaction?
Currently the following banks offer the application -

• Andhra Bank
  
• Axis Bank
  
• Bank of Maharashtra
  
• Bhartiya Mahila Bank
  
• Canara Bank
  
• Catholic Syrian Bank
  
• DCB Bank
  
• Federal Bank
  
• ICICI Bank
  
• TJSB Sahakari Bank
  
• Oriental Bank of Commerce
  
• Karnataka Bank
  
• UCO Bank
  
• Union Bank of India
  
• United Bank of India
  
• Punjab National Bank
  
• South Indian Bank
  
• Vijaya Bank
  
• Yes Bank

Two major banks – SBI and HDFC have yet to join to provide this facility.

In India, savings based on a systematic legal framework has been followed since the last 150 years, when the first savings bank was established in Calcutta by the Government in the year 1834. With the Govt. Savings Bank Act passed in 1873, it led to the establishment of Post Office Savings Bank (POSB) in 1882.

Post offices in India constitute the largest network in the country offering various services of financial, communication and retail services. Postal Savings System can be termed as one of the "Traditional Banks" of India. Since the last 123 years, POSB has been the main vehicle to spread these plans throughout the country. Some of the savings schemes like Public Provident Fund, Senior Citizen's Savings Scheme and Sukanya Samriddhi scheme are also operated through designated branches of Nationalized Banks and private banks like ICICI, IDBI, HDFC, etc.

Let us now look into some of the financial products being offered by Indian post, Banks and Mutual Fund Companies:

4. Senior Citizen Savings scheme: This is one of the most popular saving schemes among senior citizens. The reason behind its popularity is that the amount deposited is exempted under sec 80c of income tax and the interest payable is highest among other similar product. The safety of capital is also very high. The current interest rate is 9.3% per annum at post office and 9.2% per annum at banks which is payable on 31st March, 30th June, 30th September, 31st December. An investor can only have one account which can be in multiple of Rs. 1000 and the maximum limit is Rs. 15 lakh. The maturity period is of 5 years and penalty of 1.5% of the deposit if account is closed after 1 year and 1% of deposit if closed after 2 years. TDS is deducted on interest if it is more than Rs. 10000 per annum.  

5. National Savings Certificate (NSC) - It is a tax - saving instrument that gives high returns and also ensures safety. Minimum amount of deposit is Rs. 100 with no maximum limit. This instrument can be bought by an individual or on behalf of a minor or by minor himself. The deposits qualify for tax rebate under sec 80c of IT act. Also the interest every year is eligible for tax saving. Transferring of certificate from one holder to another is possible. These are of 2 kinds - 

1. 5 years National Savings Certificate – Current Interest rate is 8.5% compounded six                                                                                                monthly  but payable at maturity
2. 10 Years National Savings Certificate - Interest rate is 8.8% compounded six monthly but                                                                                         payable at maturity.

6. Kisan Vikas Patra (KVP) - It is a saving instrument that provides interest income similar to bonds. This instrument was discontinued few years back to stop the flow of black money in system. However, recently newly formed government has once again launched this product with new features. The KVP certificate can be purchased by any adult at any post office or at few nationalised banks for himself of on behalf of minor. The certificate can be encashed after 2.5 years from the date of issue. The amount invested under this scheme gets doubles in 100 months. The different denominations of certificates are available which are of Rs. 1000, Rs. 5000, Rs. 10000 and Rs. 50000. Minimum deposit amount is Rs. 1000 and there is no maximum limit.

7. Public Provident Fund (PPF): PPF is useful for those people who do not have any structured pension plan covering them after retirement. It is also known as one of the retirement planning tool. The current interest rate is 8.7% per annum compounded yearly. The minimum deposit amount is Rs. 500 and maximum Deposit amount is Rs. 1,50,000 in a financial year. An individual can open an account with Rs. 100 but has to have a minimum deposit of Rs. 500 in a financial year. Maturity period is 15 years but the same can be extended within one year of maturity for further five years. Pre - mature closures before 15 years are not allowed, however, withdrawal is permissible every year from the seventh financial year, from the year of opening account and loan facility is available from the 3rd financial year.

8. Sukanya Samriddhi Account: This is one of the latest saving schemes launched by the government which is only for girl child. This account can be opened for any girl child who is below the age of 10 years. Only one account can be opened in the name of girl child and maximum two accounts can be opened by any specific guardian in the name of two different child. The minimum deposit to be made is Rs. 1,000 and maximum limit is Rs. 1,50,000 in a financial year. The amount deposited gets rebate under sec 80c of IT act. If the minimum amount is not deposited in that particular financial year then the account is discontinued and it can only be revived through a penalty of Rs. 50 per year with minimum amount required for deposit of that particular financial year. The account under this scheme can be closed after completion of 21 years only. However, premature closure will only be allowed after the completion of 18 years provided that the girl is married. Also 50% of withdrawal of the deposit amount is allowed after the account holder's age is 18 and If the account is not closed after maturity then it will continue to earn interest from time to time as specified in the scheme.

The current Rate of interest is 9.2% per annum which is compounded annually. 

9. Debt Mutual Funds: These are the kind of mutual funds which have no exposure in the equity market thus ensuring safety of capital. The interest rate in this product is not fixed and depends upon the underlying security it holds. However, an investor can expect the returns similar on the lines of a fixed deposit of bank. Different kind of schemes are available under debt fund category such as long term funds, short term funds, income funds, gilt funds, liquid funds, etc.  

With such variety of financial services available by the Government and Private companies, today’s investors have a lot of options to choose from. The only thing matter is that the product should suit their convenience, their goals and their risk profile. Postal Schemes have taken quite a number of initiatives to encourage the middle class and the poor people to invest today, so that tomorrow they do not have to depend on loans and debt. From mail to money they have given our country excellent opportunities to future in a systematic manner. However, most of these schemes are still not capable of beating inflation in the long run. So, one should try to avoid such kind of schemes and look at other good schemes available in the market. On the other hand debt mutual funds are gaining popularity due to their flexibility and few tax benefits. An investor can consider and choose debt scheme according to his need and risk profile and make it a part of their portfolio.

Disclaimer: Please remember to consult your financial advisor before taking any final decision about any product.

People are increasingly using the Internet, mobile phones and social media for everything. Banks want to use this medium to increase their customer base and number of transactions. It is imperative that banks use proper security methods to prevent misuse and theft. From a user's perspective, such tools are convenient and also help people who do not have bank accounts. But it is important to take necessary security measures. The bank may also get information on your other activities on social media which might be a compromise on your privacy.

You should view the pros and cons and decide if you need to use this apps and services.

Fake Indian Currency Note (FICN) is a term used by officials and the media for fake currency notes circulated in India. According to Wikipedia, in the year 2011-12 alone, RBI had detected Fake Indian Currency Notes (FICN) of various denominations in the banking system having a value close to Rs. 25 crores. Printing and/or circulating counterfeit notes is a criminal offence. 
The best way to protect yourself from counterfeit notes is to be aware if the currency notes that you receive are genuine or not. Here are some basic guidelines to detect whether a currency note is real –

1. Security thread - A silver security thread goes through the breadth of the note. It has the words ‘Bharat’ and ‘RBI’ inscribed. The thread changes colour from green to blue when viewed from different angles. It is seen as a single line from the back of the note. In fake notes, this may be in gray or there is an aluminum thread.
2.  See through Register - There is a floral pattern on the front and back of the note in the middle of the vertical band. It has the denomination written there. The numerals on both sides appear as one when held against light.
3. Watermark - A portrait of Mahatma Gandhi is hidden in the large blank space in the front left hand side of the note. The denomination can be seen when held against light with some multi-directional lines.
4. Intaglio print - The words ‘Reserve Bank of India’, the denomination written in words and the portrait of Mahatma Gandhi are printed in Intaglio print and can be felt by touch.
5. Latent Image - There is a vertical band on the right side of a bank note on which the denomination is printed but that can be seen only if the note is held at the eye level.

RBI has a website which has some interesting insight into detecting fake currency notes. You can visit the website by clicking here.

What should you do if you get a currency note?
The big issue is that there are numerous fake notes in circulation and you could get one from anywhere - be it from the taxi driver or from the ATM. If you think you have received one, take it to the nearest bank, where if it is confirmed that it is indeed a forged note, the note will be impounded as counterfeit and you will be given an acknowledgement receipt. If there is more than 1 fake note, the police will be notified about the same along with your details. You will not be given any compensation even if you are an innocent victim of the currency racket.
If you think of palming off the notes to someone else, to save yourself from trouble and financial loss, think hard as if it is found out that you were trying to give the fake money to someone intentionally, you will face criminal charges. The best way is to exercise caution by knowing how to identify fake note, so that one avoids getting them in the first place.

Summary
You have to make the basic checks on the currency notes when you get cash whatever be the source. If you do receive fake notes, do not try to pass it on to someone else but give it to the bank.                                                                                                          #gettingyourich

Vidya Kumar
Team GettingYouRich.com

Those who do not learn from history are doomed to repeat it. (Paraphrased)…George Santayana

Recently there has been a spate of news on financial fraud, online banking thefts and credit card misuse.  But that does not mean we should stop transacting online and lose the convenience.

Needless to say, we should be very careful when we transact online using netbanking or use credit cards for shopping. Some of the basic steps that you should definitely take are –

• Have strong passwords for all your online banking and trading accounts. They should be regularly changed. You should never ever reveal your passwords to anyone.
  
• Public computers should be avoided as much as possible for accessing internet banking facilities or shopping online.
  
• Ensure to log off completely from the website. Never just close the browser when you have finished with your work, as secure information is sometimes stored in the server.
  
• Ignore emails that seem to be sent by your bank/ Income tax department etc. asking for detailed personal information or asking you to click on links in the email.
  
• You should keep a close eye on your account. If there are withdrawals or any kind of transactions on your account that you did not make, be sure to report it to your bank right away. You should act promptly, as else it would become nearly impossible to detect the fraud.
  

Let us see what our banks have done to curb this menace –

• Most of the netbanking sites like the ones of HSBC and HDFC have automatic timeouts which means the online session will end after a certain amount of time if no activity is performed on the webpage.
• Consumer education –All banks have material on their websites educating customers about safe online banking. RBI sends advisory messages to banks that are to be sent to customers to educate them about online transactions’ safety.
• Many banks have virtual keyboards on the online banking websites so that customers can enter login credentials using that rather than the keyboard which could be misused by harmful programs that could have infected the computer.
• Many banks send an OTP (one time password) to the customer’s mobile phone when he/she makes a transaction online. The transaction can be completed only by using this OTP.
• People can use virtual credit cards instead of credit cards. You can generate a virtual card with your bank. This card will be for a specified amount and also have a unique login ID, password, CVV2 number and an expiry date. The exposure of the card in terms of timeline and amount is reduced here.
• Many banks alert the customer if there is some irregular account activity. Banks send emails or text messages when there are transactions in the bank account if the customer has registered for such a service.
• Reserve Bank of India (RBI) has notified banks to stop issuing regular credit cards that have a magnetic strip at the reverse of the card and to issue chip-based cards by June this year which will have higher security potential.

Do ensure that you take the necessary steps to secure your online transactions and that you know the steps that your bank has taken to ensure safety of online transactions.                                                                                                                             #gettingyourich
                 
Vidya Kumar
Team GettingYouRich.com

Poor credit score can lessen your chances of getting loans and credit cards from banks and other financial institutions. Even if you get them, you will have to comply with additional terms and conditions, pay additional interest rates, give a lot more collateral security than others, or may have to arrange for a strong co-borrower or a guarantor. So, understanding and maintaining credit history is as important.

Credit history is the way you manage your debts and loans and the discipline with which you use and repay them. This information is shared by banks with one another and is accessed by them when you apply for loans or cards the next time. They look at how you well in time did you pay your EMIs for your last loan and how disciplined a borrower you are. Information from all banks and financial institutions is pooled by ‘credit agencies’, which in addition to maintaining your history, also calculate your credit scores on various parameters linked with credit. Your negative entries would stay on your report for a minimum of six years.

You should, at all times, aim at maintaining a high credit score so that you have a good negotiating power the next time you apply for a loan and that too, from the bank of your choice.

Maintaining high credit scores and a strong credit history isn’t any rocket science. These simple things kept in mind, would let you be a good borrower -

• Avoid late payment and defaults in any ongoing loans. Any irregularity in payment cycles depicts that you are not being able to service your loans and you have borrowed more than you could repay and also that you are a risk for the bank.
• Keep your credit card limits till only the level that you would use. In case you have a credit card that you do not use, you would be taken as someone for whom the bank has earmarked money, but is not using it. Therefore you wouldn’t be worthy of giving credit. This reduces your score and damages your credit history because you are someone who did not turn out to be profitable enough for the bank.
• Be careful when taking credit cards and personal loans. Since these are unsecured loans, their default or non-utilisation would result into a lower credit score in comparison to a default in a home or a car loan.
• Avoid applying for loans often. That shows your credit hungry nature and that you are always in need of money over and above of what you earn, and that you do not know how to cut your coat according to the cloth. This typical behaviour is perceived as being that of a future defaulter. “If you are not earning enough today to make your both ends meet, how much more do you expect to earn in the near future to repay all your loans?” is the question that banks ask you here.

Abiding by these tips would make you a disciplined and a credit worthy borrower. Happy borrowing!!                         #gettingyourich

Team GettingYouRich.com

It’s easy to meet expenses – everywhere we go, there they are.” …Anonymous

Retail banking in India has many opportunities as well as challenges. The challenges are mainly related to customer retention and sustainability. As part of their strategy to attract customers, banks come up with products with some unique features. Customers should keep an eye to take advantage of such products. We have listed some of the products that might be interesting for you:

Auto Credit Service - YES Bank had launched the 'Auto Credit Service' wherein a customer of any bank can submit a one-time ECS instruction to transfer funds to an account which will enjoy the benefits of a salary account in YES bank. The customer can earn an interest rate of 7 per cent on balances of Rs. 100,000 and above which is much higher than interest rates on savings accounts with most banks. The best part here is one does not need to visit his or her existing bank to activate this service. So you need not close the existing account that you have and at the same time earn higher interest rate from another bank.

Waiver on Processing Fees – Union Bank of India will not charge any processing fees on auto loans and home loans till January 26 2013. The scheme started on August 15 2012. If any of you out there is planning to purchase a car or a home, this is worth considering.

Minimum Balance Criteria – Many banks have the clause of a minimum balance in the savings accounts and failure to maintain the average minimum balance results in some penalty for the customer. SBI has done away with the minimum balance criteria in some types of savings accounts. In some other variants, the minimum balance is as low as Rs. 50. This is a good strategy to expand customer base.

Women’s’ Savings Account – IDBI bank had started a special savings account for women where the special features included –

1. A Zero balance account for your child below the age of 18 years. 
   
2. 25% discount on Locker services

Many other banks also have accounts or loan schemes customized for women.

Do remember to look out for special features or offerings when you are buying products/services from banks. Let us know if you have had some experience with such products.

Team Getting You Rich

During the month of December, most of us are busy scouting for investment avenues and preparing our “To-Do” lists for the coming year. This year, there is something very important which you must do immediately, to ensure smooth financial transactions with your bank. You must ensure that your cheque book is CTS-2010 compliant. Read on to understand more about this.

What is CTS-2010 standard?
The New Year is going to witness a change in the way cheques are cleared in India. From January 1, 2013, the Cheque Truncation System (CTS) will be implemented by all banks across the country, wherein the physical movement of cheques between banks will be eliminated. This means, when you issue a cheque to someone, and this person presents the cheque in his bank, this cheque will not physically move to the drawee bank. The physical cheques are retained at the presenting bank level. Instead, an electronic image of the cheque is transmitted to the drawee branch, along with relevant key information like data on the MICR band, date of presentation, presenting bank, etc. To enable this, the Reserve Bank of India (RBI) has prescribed a set of minimum security features which need to be followed by the banks. Such benchmark prescriptions are together known as “CTS-Standard”.

Is this a new concept in India?
The CTS was implemented by the RBI in the National Capital Region in 2008 and in Chennai in 2011. Taking into account the benefits of this system to all the stakeholders, the RBI has decided to introduce this system across the country from January 2013.

How will the new cheques look like?
The CTS-compliant cheque leaves will need to have the following:
1. Bank's logo and details, printed in invisible ink
2. VOID pantograph, which is a wavelike design, below the account number
3. Cheque printer details along with ‘CTS-2010’ mentioned, positioned on the extreme left hand side of the cheque
4. Rupee symbol "`" next to where the amount in figures needs to be written
5. Signature space indicator mentioning "please sign above"  

What must you do as a customer of the bank?
As a customer, you must ensure that you use only CTS-2010 compliant cheque leaves with effect from January 1, 2013. You are not charged a fee for this. If you have ordered cheque books recently, there is a possibility that you would have received the new format cheque books. However, if you have received the cheque book before 3 or 4 months, you might have received a cheque book which is non-CTS compliant. In such a case, you must immediately surrender the non-compliant cheque book to your bank and obtain a new CTS-compliant cheque book.

Further, if you have issued a post-dated cheque to anyone, dated after January 1, 2013, or issued such non-compliant post-dated cheques for your home loan or auto loan or any other loan, then you must exchange these for CTS-compliant cheques immediately, as the old cheques may not be cleared after December 31, 2012.

You must also take great care while using CTS-2010 compliant cheques. Any alterations or corrections in crucial fields may result in the cheque not being processed under the new system. It is therefore advisable to use a new cheque leaf if you wish to change the payee’s name, amount in words or the amount in figures. It has also been advised by RBI to preferably use dark coloured ink while writing cheques.

What do you stand to gain under the new system?
As there is no physical movement of cheques, the clearing and credit to your account will be faster than before. Also, there is no risk of loss of cheque in transit. The biggest advantage is that CTS-compliant cheques are more secure than old cheques. There is a reduced scope for committing frauds due to the security checks in place. It is proposed to integrate multiple locations and reduce geographical restrictions in cheque clearing. The new system also aims to increase operational efficiency, both for the banks as well as the customers.

Team Getting You Rich

In today’s world, most of you wish to have all your investments online to keep an effective tab on them. Now, you can view your Employees Provident Fund (EPF) balances online and track its growth as the Employees Provident Fund Organization (EPFO) has introduced an e-passbook facility for its members this year. 


E-Passbook is basically an online version of your PF status book. It can be used -

• To track the recorded transactions date-wise.
• To check the PF status.
• To check your EPF balance online anytime. 

Features of e-passbook -

•  Available to active members only,
• It cannot be availed for negative balance, inoperative or settled EPF accounts.
• E-passbooks are not availed for exempted establishment.
• Availing an online passbook require its members to register themselves by providing all the required details.

Procedure to register online (Revised) -
You will first need to register on the EPFO website to avail the e-passbook facility, by following the steps given below -
​Step 1 : Get UAN and Member ID from your employer. You need to have the mobile number you used to register with EPFO.

Step 2 :  Check whether UAN is activated or not

• Go to the homepage of EPFO
• Under the option, 'Our Service, click on 'Know your UAN status'
• Input the Member Id details and click on 'Check Status'
• ​If you get a message that your UAN is activated, you can proceed to step 4 else follow step 3.

Step 3 : Activate your UAN based registration.

•  Go to EPFO UAN e- sewa website - http://uanmembers.epfoservices.in/index.php
• Click on the option  - 'Activate your UAN based registration'.
• Add the following details -
  • ​UAN - Universal Account Number
  • The mobile Number registered with EPF
  • Your Member ID

Step 4 : Go to EPFO UAN Member e-sewa website. Enter your login details and download your passbook.


Other important points:

1.  You do not need a user id and password to login to your account. You simply need your mobile number, document name and document number. Different document types can be used to create multiple ids. You can use only one mobile number for one registration. This can be changed subsequently. 
2. You can view details of only one EPF account under one establishment. You must first transfer one EPF to another if you want to view details of all your EPF accounts under the same establishment. However, you can view a total of 10 EPF accounts under different establishments. Inoperative and already settled EPF accounts are not available for viewing.
3. The E-Passbook facility is available to employees whose electronic challan cum return has been uploaded, for the month of May 2012 on wards. Date-wise transactions can be checked from the year for which annual accounts were updated for the establishment for the first time.
4. Any employee who has left his job before March 2012 cannot view the details online. A request can be placed on the website and the E-Passbook will be uploaded in a few days in such cases.

The E-Passbook facility can help employees to manage their EPF accounts from anywhere in the country. However, the success of this initiative depends on the EPFO’s ability in managing the website and in handling member requests.

Team Getting You Rich

Most of us postpone investing our cash inflows in productive investment opportunities. The extra cash lies idle in your bank account, earning a meager Savings Bank (SB) interest, just because you may be too busy to invest it or do not give much thought to it. This is where an Auto-Sweep facility in your  Savings Bank account will help you. 

Meaning of Auto-Sweep Facility
“Auto Sweep” facility is offered by many leading banks and is called by different names in different banks. This gives the twin advantages of both a Savings Bank account and a fixed deposit (FD) account. Your Savings Bank account is linked to a FD, and any amount lying in the Savings Bank account above a pre-defined threshold limit is automatically transferred to the FD account, helping you earn higher interest compared to the interest earned in Savings Bank account.

Working of an Auto-Sweep Account:
In an Auto-Sweep account, you define the maximum amount you would want to hold in your Savings Bank account, which is the threshold limit. At any point in time, when your account has a balance higher than this limit, the surplus is transferred to a FD account automatically, enabled by technology. This is called a “sweep-in” and the transferred amount earns normal FD interest. The amount in the Savings Bank account earns Savings Bank interest. Whenever you need money in excess of the pre-defined limit, the money in your FD is swept back into your Savings Bank account, which is called “sweep-out” or “reverse-sweep”. 

Suppose you open an Auto-Sweep Savings Bank account in ABC Bank with -
Minimum balance: Rs.5,000
Initial deposit: Rs.30,000
Threshold limit defined: Rs.10,000.

The excess Rs.20,000 is transferred automatically by the bank to a new FD account. This will earn FD rate of interest. The amount in your Savings Bank account (Rs.10,000) will earn Savings Bank rate of interest. If you wish to withdraw Rs.15,000 after 3 months from your Savings Bank account, the shortfall amount of Rs.10,000 (withdrawal amount of Rs.15,000+ minimum balance of Rs.5,000- threshold limit of Rs.10,000) will be auto-reversed from your FD account. If it is a zero balance account, only Rs.5,000 will be reversed from the FD. Your FD which is now reduced to Rs.10,000, will continue to earn FD interest. In future, if you deposit more money into your account, the excess above the threshold limit will again be swept into a FD.

Advantages and Drawbacks:
This facility offers the double benefits of liquidity and flexibility of a Savings Bank account and high interest rates of a FD account. It is suitable if you are not able to exactly time the need for money. This facility is especially useful for the salaried class, who may not be willing to lock-in large amount in FD, but at the same time want to earn high interest on idle money in the Savings Bank account.

While there are certain benefits of the Auto-Sweep facility, it is not bereft of drawbacks. You may not be able to efficiently track the movement of your funds if you are too frequent in your sweeps. Additionally, some banks may specify a minimum period for FDs. If there is a pre-mature withdrawal when you need money, it will attract a penalty on the interest rate offered. Some banks also calculate simple interest on FDs created under this facility, as against compound interest in traditional FDs. Although this facility is generally free of charge, some banks apply service charges on transactions.

Should you opt for the Auto-Sweep facility?
Auto-Sweep is best suited for busy professionals who do not have time to monitor their Savings Bank account, helping them earn higher interest on idle cash. It is also suited for people having only few transactions in their Savings Bank account. However, it is important not to over-do this facility. If you think you can predict your cash flow patterns reasonably well, it is better to invest the surplus cash in better-manageable investment avenues with no penalty for fore-closure.

While it is a good idea to leverage the excess cash and earn better interest, please keep in mind that such short term FDs are tax inefficient. Also, interest earned on FD is subject to TDS by Bank if the amount exceeds Rs. 10,000.

If you like to avoid Auto-Sweeps, one good option is to look at Yes Bank Savings Account. This will earn you interest @ 7% p.a. for balances above Rs. 1 Lakh.

Another important aspect to keep in mind is that your surplus cash may have a better use for your Financial Goals like Retirement, Children’s Education etc. 


Team Getting You Rich

A penny saved is a penny earned… Benjamin Franklin

We all have bank accounts, debit cards and credit cards. Some of us have these courtesy our salary accounts where we normally do not have a choice or some ardent salesman whom we could not shrug off. If we did have a choice what would we want in these products?

In the case of bank accounts, the features that would typically be in a wish list are as follows:

• High interest rate for savings account.
• Minimum balance requirement should be nil or very less.
• Customized products, services and upgrades depending on loyalty and size of account.
• Personalized services.
• Usage of innovative and friendlier technology
  

Some of the banks with interesting services are:

• Yes Bank and Kotak Mahindra Bank give 6.00% and 5.50% respectively on savings accounts with balance less than Rs. 100,000. For balances above Rs. 100,000 the rates are 7% and 6% respectively. Other banks do not match this figure.
• State Bank of India (SBI) has done away with the minimum balance criteria for saving banks account. Other banks charge a penalty if one does not retain on an average the minimum monthly/quarterly balance specified.
• When it comes to online banking, Citibank India has a really good internet banking facility. There is multi level security, ease of use, no multiple registrations when it comes to adding new services like trading in mutual funds. There are no additional charges for purchase and sale of Mutual funds units 
  

In credit cards the features that we as customers would typically like are – No/Low annual fees; Customized reward points, Eligibility criteria and last but not the least a high credit limit.

Here are some credit cards worth taking a look and maybe even having them:

• Credit cards from Citibank generally have a 55 day credit period. Most other banks have the credit period around 48-52 days. 
• The American Express Gold card is high on reward points for customers. You get 1000 points if you use it once a week. You get points on purchase of grocery, fuel, travel and utility bills. At the end of one year of usage of the card, you get additional 5000 points. There are discounts of up to 20% in premium in fine dining restaurants. It also boasts of intelligence wherein the limit gets adjusted depending on payment behavior and spending patterns.
• Citibank Jet Airways CitiBusiness Credit Card is another interesting card. It is perfect if you are a corporate executive who has to travel frequently. You earn 2 points for every Rs. 100 spent and double the points for tickets booked on Jet Airways. Since it is a travel oriented card, card holders have special access to airport lounges, additional baggage allowance etc. The icing on the cake is that the credit limit is Rs. 1,000,000 and as of now there is no joining fees or annual fees. 

The new trend is to have airline neutral cards. Here the cards worth looking at are –

Citi Premier Miles card where you get the following benefits

• Get 10000 Miles as soon as the first transaction of Rs. 1000 is made
  
• Get 10 Miles for every Rs 100 spent on airlines.
  
• Get 4 Miles for every Rs 100 of all other spends.
  
• Redeem miles across airlines on www.premiermiles.co.in
  
• Redeem miles up to 3 hours before take off
  
• Other features like access to airport lounges, offers on movie tickets etc.
  

Amex Platinum Travel Card

• Get a bonus of 5000 points if the joining fees is paid
• Get 1 point for every Rs. 40 spent
• Free two supplementary cards are given.
• If you spend Rs.190,000 in a year, you get two return flights of Indigo worth Rs. 6,000. Of course it has to be seen which two return flights you will get for this amount. I suppose you will end up paying the balance
• If you spend Rs. 400,000, you get a voucher worth Rs. 10,000 for a 2 nights stay. Over and above this amount, you have to pay and it does not seem to allow a one night stay.
  

Many banks have special privileges on Gold cards and Platinum cards. You must try to upgrade to these type cards by calling up the bank as the normal cards do not have too many offers/goodies for the customer. If you become a preferred customer or get a high priority status, you can avail of more benefits as a credit card customer.

To summarize, try to get the best benefits out of your Banking Relationship across Saving Accounts, Fixed Deposits & Credit Cards.

Do let us know your experiences of banking and using credit cards

Team Getting You Rich