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How Does Employee Provident Fund (EPF) Work?

An essential financial benefit that all of us obtain while getting employed with any public or private sector organisation in India is the EPF Account. First launched in 1952, the employee provident fund has been an integral part of employee benefits. From the most junior employee to the CEO – every employee of an organisation gets benefits from EPF. All organisations with 20 or more employees need to register for EPFO mandatorily. However, organisations with less than 20 employees can also voluntarily join EPFO and provide their employees EPF account benefits. But how does it work? What happens to the amount deducted from your salary every month? We will take a look at all this and more in this article. But first, let us take a brief look at what an employee provident fund is and what are its benefits. [B-01] What is an Employee Provident Fund? EPF is a scheme under the Employees’ Provident Funds and Miscellaneous Act, 1952 where-in both the employee and the employer each contribute 12% of the employee’s basic salary and dearness allowance toward an employee’s EPF Account. This money earns a fixed rate of return which changes from time to time. The current interest rate on EPF is 8.1% (as of 22nd November 2022). EPF is promoted by a non-constitutional body named the Employees’ Provident Fund Organisation (EPFO). The Ministry of Labour and Employment, Government of India, governs this organisation. All schemes of this organisation cover Indian workers as well as International workers from countries with whom EPFO has signed a bilateral agreement. Your contributions towards EPF are eligible for deduction under Section 80C of the Income Tax Act. Earnings generated from EPF contributions are also eligible for deductions, up to an amount of ₹ 1.5 Lakhs. How Does the Employee Provident Fund Work? EPF primarily works through a three-step process: 1. EPF is deducted from your salary As mentioned earlier, 12% of your basic salary is deducted as EPF every month. This appears in your salary slip. This is a compulsory deduction. 8.33% of the deduction goes towards Employee Pension Scheme or EPS and the remaining 3.67% is deposited into EPF. 2. Your employer matches this amount So, while you contribute 12%, your employer also contributes the same amount. Employers’ 12% is also treated in the same way – 8.33% toward EPS and 3.67% toward EPF. Hence, effectively, you compulsorily save 24% of your basic salary every month. While the amount may look small on the salary slip, when accumulated over the years along with interest, this amount can grow up to a handsome amount, which may come useful for major expenditures such as retirement, children’s higher education, wedding, and others. 3. All EPF contributions earn interest All EPF contributions across the country are pooled together and invested by a trust. This fund earns interest at a rate decided by the government. In general, the interest rate varies between 8% to 12%. EPF balance grows at a compound rate as in you earn interest on interest. This helps you to accumulate a significant amount every year. EPF Withdrawal EPF balance can be fully withdrawn in three scenarios: On retirement While switching your job from one organisation. When unemployed or in between jobs. In this case, a person should be without a job for at least 2 months. However, partial EPF balance withdrawal is allowed under certain circumstances, for example: Higher education Wedding Constructing or purchasing a house Repayment of home loan Renovation of home How to Withdraw EPF? The withdrawal process of EPF balance is quite simple and can be done online or offline. Online process: Register for a Universal Account Number (UAN) on the EPFO portal. This is your unique login through which you can access all your EPF details. Ensure to use an active mobile number while creating the UAN. Link your UAN to your Aadhar. Verify your KYC details on the portal and proceed as per instructions. You will need to input your PAN details and bank account details along with the IFSC code. Offline process: Fill up the composite claim form. Get it attested by your previous employer. Submit the form at the EPFO office under whose jurisdiction your EPF is collected. Transferring Employee Provident Fund We discussed the process of withdrawal of EPF. But what happens if you leave an organisation and join another one? You have to transfer your EPF balance from your old employer to your new employer. The process of transfer is quite simple. It can be done by your new employer. You simply need to fill up a few forms and submit them to your new employer. The process will be handled by them. These forms are usually a part of the joining kit. However, if they are not, you can ask your employer about them. You can also initiate the transfer process yourself. You will need your Universal Account Number (UAN) and simply follow these simple steps. 1. Log into the EPF member portal. 2. Go to Online Transfer Claims Portal and request an EPF transfer. 3. Select ‘Request for Transfer of Funds’ and input your previous employer details. 4. Herein you will need your old or new employer to authenticate it. 5. Once you submit your information, you will receive a PIN on your mobile. 6. You will be able to track your application using the tracking ID provided to you. The EPFO website also has a grievance section. Hence, in case you have any issues with your withdrawal or transfer or any grievance against your employer, you can complain on the website itself. [B-02] The EPFO website also has a passbook section where-in they issue passbooks to all members. The passbook can help you keep a track of your EPF account balance and ensure your EPF is being deposited on time. EPF, at the end of the day, is an immensely beneficial financial buffer. With multiple benefits, it is the “friend in need”.
08-11-2023
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Other

How does Corona Virus Impact the Economy of India

The coronavirus outbreak has affected the Indian economy in many negative ways. It hit economic growth in the first few weeks of 2020. The outbreak brought all nations, including India, to a standstill. Nearly every country implemented strict lockdowns. Many of them also had a second lockdown due to the second wave. The second will arrive in the winter of 2020. The economy’s work slowed down a lot. It affected the output of the products. The pandemic closed most offices and industries for a while. Supply chains suffered a lot of issues. As businesses closed, lots of people lost their jobs and income. Effective demand decreased too. This article will provide a comprehensive analysis of the impact of coronavirus on the Indian economy. [B-01] GDP loss India’s economy had one of the sharpest global reductions. Due to the coronavirus outbreak lockdown was implementted. During that time, the GDP growth reduced by 23.9%. The nation’s GDP shrank to 7.3% in 2020–21. The decline brought on by the coronavirus outbreak is visible here. India’s growth rate in 2019 was among the best. The national unemployment rate was 7.1% in 2020. The government transferred funding in March 2021. It was when the second wave of the epidemic broke out. It strengthened India’s vaccine drive. Over a billion vaccine doses were provided across the nation until February 2022. It was estimated that domestic inflation would start to drop in 2021. But, protests rose in various areas in 2022. Thus, the issue of unemployment remained. The NSO made preliminary estimates public on August 31, 2022. India’s GDP during the first quarter (April-June) of the current fiscal year 2022–23 increased by 13.5%. The GDP increased by 20.1% in the corresponding quarter of 2021–2022. (Note: NSO stands for National Statistical Office.) Impact on Agriculture and Food The rabi harvest in India was ongoing when the lockdown took place. The sale of the product could’ve brought large profits for the farmers. But it was stopped due to the partial collapse of the food supply system. The declining farm-gate prices also hit revenue. The impact of coronavirus on the Indian economy was huge. The coronavirus outbreak suspended international trade. It reduced the demand for Indian agricultural products on a large scale. Not only had global trade ceased, but so had domestic trade as well. Due to a lack of transportation, farmers could not take the produce to markets. The holds on the domestic movement of products were also a hindrance. Agriculture market arrivals in India were ineffective. It was so because the supply networks were improper. Online grocery platforms were affected due to restrictions on transport. Thus, farmers all around India suffered a lot of financial damage due to the coronavirus outbreak. Oil The Indian oil and gas sector accounts for 5.2% of the world’s oil demand. India is the third-largest energy user after the United States and China. The nationwide lockdown reduced the demand for fuel. It was responsible for two-thirds of the oil and gas sector’s demand. Bulk and personal transportation were also impacted. There was a sharp decline in crude prices during the coronavirus outbreak. Even so, the government hiked the excise and special excise taxes. It aimed to make up for the lost revenue. Moreover, the government also raised the price of toll roads. Tourism and Flight Networks The flight industry and tourism cover quite a bit of our GDP. They were the first businesses to be harmed by the pandemic. Experts agreed that COVID had a greater impact on them than the 2008 financial crisis. There were nearly 35 million layoffs in these two businesses. It accounts for about 65% of the workforce. The massive cash flow problems were responsible for it. IATO (Indian Association of Tour Operation) estimates that these industries could lose up to 85 billion rupees. Thus, the coronavirus outbreak affected aviation and tourism finance in India. E-Commerce Following the coronavirus outbreak in March 2020, unemployment increased a lot. In the first few months of 2020, many workers left the labor field. From May 2020 on, there was some recovery. Yet, the size of the labor force continued to suffer. It had decreased from its early 2020 level by mid-2021. The number of employed people shrank even faster than the labor force. The official sector also experienced an influence on employment. The informal sector was no different. In India, there were more than 80 million salaried employees during 2019–2020. More than 10 million people had lost their jobs by April 2020. Cash Flow More than half of Indian businesses are still having functional problems. Nearly all are experiencing cash flow issues. The coronavirus damaged more than 50% of businesses. This data was provided by FICCI. Cash flow issues brought on by the slow economic growth affected principal, interest, taxes, liquidity, and other crucial expenses. (Note: FCCI is the Federation of Indian Chambers of Commerce and Industry.) Pharmaceuticals Since the COVID-19 pandemic began, this industry has been expanding. India, being the biggest supplier of medicines, was crucial here. Indeed, this had a major effect on the Indian economy too. At the beginning of 2020, a market worth $55 billion was booming in India. The country was supplying hydroxychloroquine to countries all over the world. This also included: USAUKCanada Middle Eastern countries Due to the coronavirus outbreak, the cost of raw materials imported from China has increased. The generic medications and their cash flow were affected due to: Reliance on importsImproper supply-chain. Lack of workers in the field. Despite the drawbacks, the government vaccinated more than 1 billion people in India. [B-02] Conclusion Every crisis creates a new chance to reconsider the steps taken for improvement. Given the impact of coronavirus on the Indian economy. should adopt formative models. For further details, you can visit the website of Piramal Finance. We provide excellent financial services and advice. It will be our sincere pleasure to serve you.
08-11-2023
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Personal Loan

What Is Education Loan And How Can You Apply For Abroad Studies?

Education loans are like any other loan. You borrow money and then you pay it back with interest. But instead of paying the money back to a bank, you pay it back to your school. Education loans are a way to pay for school. They are given out by banks and other financial institutions. You can use higher education loans to pay for college, university, or other types of school. Education loans have some of the lowest interest rates among all types of borrowing. The repayment period can be up to 25 years. This makes education loans more attractive than other types of loans. A personal loan for education gives borrowers more time to pay them off. Some lenders may even provide special forbearance periods. In this period, payments are not necessary, and the interest rate is stable. [B-01] Types of Education Loans in India Course-Based Loans for Career Development A lot of people who have worked at a job for a few years take a career break. They go to school to learn new skills. This helps them to get a better job. Such people would strive to get admission to prestigious technical and commercial schools. They perfect their skills and enhance their careers. Undergraduate Loans This loan helps students pay for college. A college degree lasts 3 to 4 years. A college degree makes it easier to get a good job and start earning money. Loans for Postgraduate Studies Many students decide to get a post-graduate degree. A post-graduate degree is an advanced degree. To get a post-graduate degree, you need to study for two years. A post-graduate degree will help you understand the field you are studying much better. Location Based International Education Loan These loans let students attend a foreign university to pursue their desired degree. If they meet the conditions, students who wish to study abroad may apply for a loan. The loan will cover their airfare, accommodation, and tuition. Domestic Education Loan Students may apply for this loan if they plan to study in India. Approval from an Indian educational institution is necessary before loan approval. Collateral Based Assurance from a Third Party The student may be able to get an education loan with the aid of a guarantee letter from a bank employee or a home bank. Loan against Assets, Deposits, and Securities You may add assets like equity shares, fixed deposits, real estate, flats, houses, and more. You can even put up gold deposits. Education Loan Eligibility To be eligible for an education loan, you must meet the following requirements: You must be an Indian citizen. You must have been admitted to a reputable university in India or overseas. Your age must fall between 18 and 35. You must be undergoing a graduate, post-graduate, or post-graduate diploma. Your enrollment in a school connected with the University Grants Commission (UGC). Or, The All India Council for Technical Education (AICTE), the government, etc. Full-time students must have a co-applicant. The co-applicant needs to have a steady source of income. A solid academic background speeds up the process. What Will Increase Your Eligibility for a Student Loan? Banks are careful while assessing loan eligibility. It guarantees that financial help reaches deserving students. Some of the assessing points are: Good marks in the qualifying examinations Having a strong academic record Admission to a prestigious institution Co-borrower with a strong financial background Possessing promising future income generation potential How Can You Apply For Abroad Studies? Applying for studies abroad in India can be a daunting process for many students. However, with the right guidance, the entire process can become easier. Research The first step in applying for studies abroad in India is to find a suitable institution. Research different universities and programs. Find the best fit for your academic and career goals. It would help if you considered factors such as: School’s reputation Courses offered Cost of tuition Availability of scholarships You can find this information online through university websites or an education consultant. Apply for Admissions Once you have found the right university you must apply for admission. The admission process starts by filling out an application form. This form is on the university’s website. After that, you must submit documents. Some of them are academic transcripts, letters of recommendation, and a purpose statement. Also, depending on the university, you may need to take an English proficiency test. If your application is accepted, you will receive an acceptance form and a letter of the offer. Please review them before accepting. It may have restrictions that you need to be aware of. Student Visa After receiving the offer letter, the next step is to apply for your student visa. You must assemble the necessary paperwork. Each nation has its unique requirements that you must fulfil. You should keep the following documents ready. Passport (with six-month validity) Student visa application form Passport pictures Proof of admission Evidence of financial means Civil documents International student health insurance Previous university records Travelling Make your flight reservations as soon as possible. Always be on the lookout for cheaper fight tickets. You should also confirm with the airline about the maximum luggage allowed. Accommodation The campus may or may not provide accommodation. You may need to find a place to live while studying abroad. Looking for a room on rent or a local host would be best. The price will vary from city to city. Let’s say you decide to rent an apartment. You may need to pay for tenant’s insurance and extra utility costs like power, internet, and water. (in some housing areas). [B-02] Wrapping Up Applying for studies abroad from India involves several steps, besides evaluating higher education loans. It includes thorough research, analysis, document submissions, and studying for the admission tests. If in doubt, consider consulting an institution like Piramal Finance. Their experts can help you calculate how much you need to borrow and how much EMIs you need to pay when taking a personal loan for education. You can check out more helpful articles like this on their site for free.
08-11-2023
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Other

EMI – Everything You Wanted to Know About EMIs

EMIs are significant since they help finance anything from a smartphone to an entire apartment. Despite its apparent advantages, many consumers must be aware of the EMI repayment process. This article will help you understand EMI’s meaning and everything you need to know about them. [B-01] What is an EMI? An Equated Monthly Instalment (EMI) is a fixed sum of money paid by the borrower to the lender of funds on a defined day each month for a set time. An EMI comprises two parts: the principal and the interest. Before taking out a loan from any financial institution, the borrower must understand these two components, particularly the calculation of EMI by banks. No-cost EMIs are one of the most popular EMI repayment methods that ease the pressure of paying a large sum upfront. However, lenders charge a processing fee so you must carefully study all terms and conditions before opting for such loans. How do EMIs Work? An EMI is made up of two parts: principal and interest. When a loan is granted to an individual, the interest rate is initially higher than the principal. The loan amount, interest rate, and loan term determine the EMI. During the first stage of EMI payments, the interest is greater than the principal. However, while the EMIs continue, the principal grows, and the interest shrinks. You can alter the loan duration based on your demands and ability to pay to determine how much EMI is required in each situation and then make a decision. Types of EMIs There are two types of EMI payments: EMI in Arrears Standard EMI. The entire principal loan amount (after deducting the processing fee) is released by the lender to the borrower’s bank account without any advance EMI payment reduction for EMI in arrears. Several banks offer standard EMI wherein the principal amount (after subtracting the processing fee and the first EMI amount) is released to the borrower’s bank account. In this case, the advance EMI paid does not include the interest payment but only the principal amount. This reduces the principal loan amount for the remainder of the EMI payments. How are EMIs calculated? EMI calculation is mainly of two types: The flat rate method The reducing balance method Flat Rate Method Each interest charge is calculated using the initial principal amount under the flat rate approach when the loan is repaid in instalments. On personal loans and auto loans, the flat rate technique is popular. Borrowers profit less from this plan since interest payments must cover the principal amount, resulting in a higher effective interest rate than the reducing-balance strategy. This technique charges interest on the loan amount, regardless of any previously repaid principal. Vehicle loan lenders typically use this strategy. EMI = (Principal + Interest)/Monthly Period. For example, suppose you want to buy a car and take out a loan of Rs. one lakh with a 12% interest rate and a term of 2 years using the flat rate technique. In that case, the interest calculation is on the loan amount of Rs.2 lakhs. As a result, in this case, the EMI would be calculated as follows: EMI = (1000000 + 24000)/24=42666.67. Reducing Balance Method Compared to the flat rate method, the declining balance strategy determines the interest payment based on the outstanding principal. This means that the interest and principal payment components of each EMI change. As a percentage of the outstanding loan, interest payments make up a higher amount of the EMI at the start of the loan period. As you repay your loan over time, the interest amount reduces, and a more significant proportion of the payments go toward principal repayments. Lenders charge interest on the outstanding balance of your loan amount following monthly repayment of the principal amount under this method. The EMIs will remain unchanged in this case, but the interest amount reduces each month. The formula for calculating EMI using this method is: P=the principal loan amount R = monthly rate of interest N = duration of the loan in months So, using the same example as in the previous way, the EMI calculation would be: EMI = [P x R x (1+R)^N]/[{(1+R)^N}-1]. Thus, EMI = [1000000 x 12/(100 * 12) x (1.01)^24] / [{{1.01)^24}-1] = 10000 x 1.2697 / 0.2697 =47078.23 Advantages of EMI Affordable You can afford high-value products like vehicles through EMIs that would otherwise take a long time to save up. Convenient Immediate demands can be met with easy EMIs deducted from your salary account. Manageable Rather than paying a large sum from your savings all at once, paying off smaller and regular sums from your monthly salary is better. Thus, EMIs a better method of financial management. Flexible EMIs allow you to choose the amount and tenure of repayment. This makes it a convenient and adaptable solution for meeting requirements. Factors that influence EMI calculation Loan Amount: The amount borrowed by an individual is an important factor affecting the EMI. The EMI is directly proportional to the loan size; the higher your loan amount, the higher your EMI. Interest Rate: The interest rate on a loan is calculated by considering the borrower’s income, credit rating, borrowing history, current market conditions, ability to repay, and so on. Loan Tenure: The third most crucial consideration is the loan’s tenure or length. If you choose a loan with a longer term, your EMI will be lower than if you choose a loan with a shorter period. Manage your EMIs better Never missing an EMI is one of the most important things to remember when taking out a loan. When applying for a loan, carefully consider all possibilities and calculate EMIs in each situation. You can use a loan EMI calculator to aid you with this. Estimate your financial flows in the future and avoid pressures with EMI payments. Saving money on small expenses will assist you in better managing your EMI. You can use them to pay off a significant chunk of your loan EMI and save money on interest. You can avoid excessive fines if you pay your loan EMIs on time. The penalty is determined as a percentage of the skipped EMI. If you have applied for a used car or a home loan, making timely EMI payments will qualify you for a top-up loan. [B-02] Conclusion EMIs are double-edged swords. They help maintain your expenses, but they come with a cost. The longer the loan term, the lower the EMI, but the higher the interest expense you must bear. However, with careful planning and budgeting, you can use EMIs to pay off debt regularly and conveniently. You can benefit from EMIs since the debt is divided. You can schedule your income and expenses carefully and set your EMI payments every month.
08-11-2023
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Schemes

All the benefits of pradhan mantri awas yojana gramin you should know

Pradhan Mantri Awas Yojana Gramin is the main program initiated by the central government to build new homes for everyone. The scheme is meant for the poor in rural areas. It would give those living in kutcha and pucca houses a clean kitchen and all the basic things they need. This scheme has replaced the Indira Awaas Yojana, a similar social welfare program begun by the government in 1985. Pradhan Mantri Awas Yojana Gramin is known as one of the most comprehensive social programs. [B-01] What is PMAY-G? The primary objective of PMAY-G is to provide pucca housing with some of the basic necessities. This initiative is for people who do not own a home, live in houses that are severely damaged, or have kutcha houses. The minimum size of the homes under the PMAY-G program is 25 square meters. The PMAY-G comes under the Housing for All program. The federal government projects that this program will be fully implemented by 2022. Features of the Pradhan Mantri Awas Yojana Gramin Scheme The most important parts of this comprehensive plan for social welfare are: The central and state governments would share the cost to help the rural poor pay for housing. The ratio of the central government’s share to the state government’s share is 60:40. The government would provide total assistance of Rs. 1.20 lakhs to all units in non-hilly states. For the union territory of J&K, the northern states, and the Himalayan states, the ratio is 90:10. Also, they will get the assistance of Rs. 1.30 lakh for each unit. The PMAY-G project will replace all the temporary homes. Each recipient of assistance under this program would also receive ₹90.95 per day for unskilled labor under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). The SECC and caste census will determine who will get aid based on how well off they are. After that, the relevant gram sabha will look into the data and pass it on to the government. Under the Pradhan Mantri Awas Yojana Gramin, the payments will be transferred straight into the bank accounts of the beneficiaries. Aadhaar data will also be checked to ensure that payments are made to everyone who needs them. Swachh Bharat Mission-Gramin (SBM-G) and MGNREGS together will provide up to Rs. 12,000 for the construction of toilets. Pradhan Mantri Awas Yojana Gramin: Benefits 1. Generous Financial Aid for All Citizens Depending on the income level, the government offers credit-linked subsidies to economically weaker sections (EWS), low-income groups (LIG), and middle-income groups. The only condition is that the applicant or any of their family members should not already be homeowners. 2. Housing for All Social Classes The government intends to build 2 crore affordable homes in well-known urban areas for people who qualify under the PMAY scheme. In states like Maharashtra, West Bengal, and Tamil Nadu, the development of such residences has already started. The government wants to raise the living standards of several people through this development scheme. 3. Nationwide Housing Construction The PMAY program is not only available in urban areas. Rural low- and middle-income people are also given consideration. The Pradhan Mantri Awas Yojana ensures growth in real estate and other related sectors in remote regions. 4. Employment Advantages The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), which is part of the PMAYG 2021–22 scheme, offers the applicants 90–95 days of employment in addition to housing support. 5. Support for Building Toilets Each beneficiary will also receive ₹12,000 to build toilets, whether through the Swachh Bharat Mission or another program. 6. Different Housing Designs In accordance with terrain, climate, culture, and other housing practices, the beneficiaries are given a choice among several modern house designs. Pradhan Mantri Awas Yojana Gramin: Apply Online Here are the steps for Pradhan Mantri Awas Yojana Gramin online apply that should be followed to add a new beneficiary to this program: Step 1: Visit the PMAY website Step 2: Tap on “Citizen Assessment” and then click on “For Slum Dwellers” or “Benefits under other 3 components,” depending on what you need. Step: 3 – Enter Aadhaar card information Step 4: This will take you to the application page, where you’ll need to fill out all the information correctly. Step 5: Fill out your name, phone number, other personal information, bank account information, and information about your income, among other things. Step 6: When you’re done, click “Save” and enter the captcha code. Step 7: Click the “Save” button to finish. Now that the application is finished, you can take a printout. How to Apply Pradhan Mantri Awas Yojana Gramin Offline? People can apply for the Pradhan Mantri Awas Yojana Gramin program offline. To do that, you can go to a Common Service Center (CSC), which is run by the governments of the state and union territory. There, you have to pay Rs. 25 plus GST and fill out the application form that the staff gives you. It’s important to note that the Ministry of Housing and Urban Affairs (MOHUA) has not given permission to any private organization or individual to collect this fee from any recipient of this scheme. PMAY-G: Exceptions It gave a list of reasons why someone would not be eligible for a Pradhan Mantri Awas Yojana Gramin Rural unit. The Pradhan Mantri Awas Yojana will not help the family if an adult member is literate and over 25. Taxpayers and tax professionals People who own landlines and refrigerators should not use PMAY-HFA. People who work for the government and earn more than Rs 10,000 per month are not eligible for assistance under the Pradhan Mantri Awas Yojana. People with a Kisan Credit Card (KCC) limit of Rs 50,000 or more cannot use PMAY-HFA (rural). The Pradhan Mantri Awas Yojana is not open to anyone who possesses motorized two-wheelers, three-wheelers, four-wheelers, farming implements, or fishing boats. [B-02] Conclusion This program aims to give every homeless person living in a kutcha or old house a pucca house with basic amenities. If you want more information, please visit the Piramal Finance website.
08-11-2023
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Other

Benefits of Opening a Current Account for Your Business

When it comes to the management of a company, there are a variety of factors that need to be considered. These factors include, but are not limited to, running the business day-to-day, and paying employees’ salaries every month. It also includes taking debt into account along with expenses when growing and expanding the business. A current account is an absolute necessity for any kind of business. The purpose of this piece of writing is to explain what a current account is and why it is beneficial to companies. [B-01] What Exactly is a “Current Account”? Having a separate bank account for a company makes it much simpler to record financial transactions. It also helps to manage cash flow and figure out tax obligations. A business current account allows the same depositing, withdrawing, and balancing of funds as a personal current account. Almost all commercial banks in India allow customers to open current accounts. Business owners and entrepreneurs who do a lot of transactions can use these types of accounts to their advantage. Since this number is generally high and the amount spent per transaction can be large, interest is usually not added to the balance. Benefits of Maintaining a Current Account Once you know what a current account is for a company, you can start thinking about all the advantages it offers. There are numerous advantages to opening a business current account: – With an unlimited transaction limit, account holders no longer have to worry about how much money is coming into or going out of their accounts. Owners of accounts are free to make as many or as few withdrawals as they like. This ensures a great degree of operational flexibility for businesses. Maintaining financial privacy by keeping a separate bank account for business transactions is very helpful. It allows owners to keep their finances from interfering with their professional initiatives. It is much simpler to track incoming cash, which improves budgeting and planning. When it comes time to pay taxes and think about deductions, having clear and understandable financial records is a huge help. The business’s financial data is presented in a clear manner, making it possible to draw wise conclusions. The statement will specify the location and parties involved in the transactions. An overview of a client’s banking relationships is included in the immediate financial reports. Most banks make it available to their customers. Real-time transaction data is also provided, which is useful for making better business decisions. All company transactions may be handled quickly and on schedule with the help of a current account. When these transactions are completed, it is easy to maintain friendly relationships with both vendors and buyers. Improves credibility. Having a separate checking account for your business is a good way to establish your company’s credibility in the eyes of customers. A company that doesn’t use its current account looks unprofessional and raises doubts about its trustworthiness. Other perks of current accounts are like those found in traditional savings accounts. Almost all banks offer free demand drafts, NEFT and RTGS transactions, and Pay Orders to business clients. All of this is in addition to the limitless withdrawals and deposits. Current Account Structures Banks offer different types of current accounts to meet the different needs of their customers. When you open a current account, you must have a clear idea of the kind of transactions you intend to do. Here are some of the typical current account types that banks provide: Standard Current Accounts A specified monthly average balance and minimum balance requirements apply to this non-interest-bearing deposit account. Chequebooks, debit cards, an overdraft facility, etc. are all available. Other advantages may include free RTGS and NEFT transactions, online banking, SMS banking, and so on. Current Accounts Packaged The bundled accounts provide account holders with a wide range of benefits. Other services like roadside assistance, medical care, and travel insurance are also included. Single-Column Cash Register Simple cash accounts or single-column cash book accounts let you make daily transactions. But they don’t have features like an overdraft facility. It is suitable for companies without active bank accounts. It is a book that keeps track of daily transactions. Current Accounts With a Premium It provides exclusive discounts and benefits to account holders. The account includes a lot of customization choices. This account is suitable for people who deal with a lot of critical financial matters. Accounting for Foreign Currencies This account is an ideal option for individuals or enterprises that often transact in foreign currencies. [B-02] Conclusion Many factors contribute to a current account’s significance for a company. Traders may rest easy knowing that their transactions will be processed accurately. Also, there is no cap on the volume of business they can conduct in a particular time frame. In case readers are wondering whether a current account is necessary to operate a business in India, the answer is no. Thus, it is recommended that business owners make use of it for the sake of smooth business operations. A current account can be opened for them at any of India’s commercial banks. Before opening a checking account, business owners should look at what different banks have to offer. They should never let themselves get caught off guard in the future by failing to read the fine print. Business owners need to keep their personal and business finances separate. They should have separate bank accounts to make this possible. Contact Piramal if you have any doubts or need help understanding the benefits of opening a current account for your business. Piramal will guide you well and make your mind clear.
08-11-2023
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Investment

Best SWP Mutual Funds to Invest in 2022.

A Systematic Withdrawal Plan (SWP) lets investors withdraw money from their investments at regular intervals. It is similar to a systematic investment plan (SIP), which enables them to invest a certain amount at regular intervals. The investor has full control over the SWP and can choose its size, schedule of payments, and length of time. Withdrawals from SWP may be charged an exit load. This makes SWP plans an excellent bargain for investors who require instant access to their funds. Investors use an SWP when they want to get a steady flow of money from their investments. SWP has multiple use cases, like retirement, EMI payments, meeting regular expenses, etc. But how can you choose the best SWP that suits your needs? Let’s find out. [B-01] Important Factors Before Choosing the Best SWP Plan There are certain things that you should remember before selecting the best SWP in a mutual fund. Verifying the mutual fund implies that the company’s stability and longevity are your first steps. Secondly, you should consider the asset allocation approach and the fund’s risk-adjusted returns. Thirdly, you need to see whether investing in SWP via a mutual fund would incur any fees or not. Here are some other factors you need to consider before selecting an SWP plan: Financial Requirements When deciding how much to invest, it’s important to consider your future financial needs. This will involve determining the goals of your investment. It can be retirement, purchasing a house or car, etc. Consistent Earnings You need to determine your needs before going for SWP. If you do not need constant access to funds, you may opt for a lump sum withdrawal. Monthly salary withholding provisions are a common type of SWP plan. The monthly payment can be set based on your requirements. Retirement Income SWP can become the basis for your retirement income. You can list your preferred mutual funds to start a simple plan for withdrawing money over time. SWP plan, if set up correctly, is an excellent way to provide steady income during your retirement years. Few people may feel more secure if they are guaranteed a monthly income. In this case, a systematic withdrawal plan is helpful. Impact on Taxes If you use the best SWP in mutual funds to supplement your monthly income, you should pay special attention to the tax implications. The distribution through SWP will be subject to capital gains tax. You should know that the fund you invest in charges a capital gains tax. For instance, long-term capital gains on stocks (gains accrued over more than 12 months) shall be taxed at 10%. Whereas short-term capital gains (gains accrued over less than 12 months) shall be taxed at 15%. Market Conditions Before you invest in an SWP plan mutual fund strategy, it’s important to think about how the stock market is performing. This is because mutual funds are market-linked plans. If the market is performing well or is expected to rise, then it is the right time to invest in SWP. In the long run, markets have always risen. If you are investing with a long-term horizon, then you don’t need to panic much. Best SWP in Mutual Fund in India Here is a list of some of the best SWP in mutual funds in India: SBI Equity Hybrid Growth Plan SBI Equity Hybrid Growth Plan is a high-risk option from SBI Mutual Fund. Since its inception on December 31, 1995, investors have been able to place their money into either debt or stocks via this fund. This investment’s minimal risk makes it suitable for people who want their money to grow over time. The plan’s goal is to provide investors with liquidity and long-term capital growth. The plan invests in a variety of asset classes. This includes a variety of stocks and bonds from fast-growing companies and safe haven investments like government bonds. A diversified investment portfolio reduces your portfolio’s risk. ICICI Pru’s Equity and Debt Fund The ICICI Pru Equity and Debt Growth Plan is an ideal hybrid fund strategy from ICICI Prudential Mutual Fund. Allocating funds across equities, money market instruments, and some fixed income is part of the plan’s investment strategy. It aims to deliver a passive income source and long-lasting capital appreciation. Quant Absolute Funds – Growth The Quant Absolute Fund Direct-Growth invests in both equity instruments and fixed-income securities. This allows investors to generate passive income along with the growth of their investments. Franklin India Equity Hybrid Growth Plan This plan gives investors access to equities, the most alluring asset class for long-term investment. Investments in a diversified, high-quality portfolio aim to produce a consistent income stream and long-term capital growth. Canara Robeco Equity Hybrid, A Long-Term Growth Investment Program With an eye on high annual returns and long-term growth, the Canara Robeco Equity Hybrid Growth Plan uses a balanced portfolio with a hybrid fund structure. The plan’s ultimate objective is to curate a well-diversified investment portfolio that generates high annual returns and substantial capital appreciation. In March 2000, the initiative became a permanent part of the system. [B-02] The Bottom Line SWP in mutual funds provides a wide range of opportunities that make investing accessible to everyone. SWP plans allow you to withdraw systematically from your investment. Thus, you benefit from a regular income while you stay invested. Once you are clear on your goals, selecting the best systematic withdrawal plan becomes easier. To learn more about SWPs and other investment options, you can read similar blogs on the Piramal Finance website.
08-11-2023
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Cards

Everything You Need to Know About Credit Card EMI

Once you learn how to use one responsibly, a credit card may be a great financial resource. Credit card schemes provide you with the freedom to make large purchases in preparation for future events, and then pay for them over time with manageable monthly instalments. Once the sum is converted into EMI, the outstanding balance is repaid monthly, much like a loan. Credit card issuers often allow customers a repayment duration of anywhere from three months to three In this. In this article, we’ll talk about credit card EMIs. [B-01] What Are Credit Card EMIs? There has never been a more convenient time to use a credit card for cashless transactions, what with the widespread adoption of digital payment methods. Your credit card debt can be converted into an EMI the same way a personal loan can. For people who can’t afford to pay off their credit card balances in full, the option of making payments in instalments over time is a good compromise. It’s also a good option for debtors who would rather pay down a portion of their debt now and let the remainder accrue interest. How Does Credit Card EMI Work? One perk of availing of a credit card scheme is the grace period. This is typically 45-55 days but varies between different financial institutions. It allows you to pay off your purchases without paying interest. The statement period (or billing cycle) is when interest is not charged, starting on the first day of the period and ending 15-25 days following the last day of the statement period. However, when making a sizable purchase, it may be outside of most people’s financial means to make a full repayment within the interest-free grace period. Banks respond to this need by providing credit card EMIs. EMI programs are typically issued in conjunction with a retailer or supplier. A minimum purchase requirement is typically in place before you can use a credit card’s EMI program. If you choose the credit card EMI plan, you’ll be able to spread out your payments over 3, 6, 9, 12, or 24 equal monthly payments. Each bank’s interest rate for the Credit Card EMI program is different. How to Convert Credit Card Payments to EMI? Users can choose to divide their credit card charge into monthly instalments at the time of purchase if they so choose. If you have enough cash on hand to make a down payment, you can do so, and the rest of the price can be paid in instalments over time. Well, it’s worth noting that it’s not just up to the credit card holder to decide whether or not to repay the credit amount in instalments. The credit card issuer/bank has considerable say over whether a customer can pay down their balances via instalment payments. Paying off a credit card balance is similar to paying back a bank loan. The bank will lend you the money you need to pay off your credit card balance, and you can make your payments in instalments that best suit your budget. In order for the bank to extend credit to you, it must be certain that you will repay the money on time and not abuse the privilege. Before deciding whether or not to convert your credit card payments to EMIs, banks will look at your credit score, credit repayment history, other loans you may have, etc. Factors to Consider While Converting Your Credit Card Bills into EMIs Here are some things to think about before deciding to turn your credit card payments into EMIs: Reducing Balance Method Interest on the EMI amount is often calculated using the diminishing balance approach by banks. Therefore, interest will be added to the unpaid loan sum on the last day of each month. If you borrowed Rs. 50,000 and paid off Rs. 10,000 in the first month, the interest you pay the following month would be calculated based on the remaining Rs. 40,000. In this manner, your monthly interest payment will gradually decrease. Rate of Interest It’s important to keep in mind the interest that a bank will tack onto your credit card statement when you pay it off in instalments. Interest rates on credit cards, however, differ between financial institutions. The down payment, length of payments, interest rate, and other variables all play a role. Generally speaking, the interest rate will be lower for a shorter-term loan. Therefore, the loan amount should be repaid as quickly as possible. Processing Fee Some financial institutions may impose a nominal fee for transforming a credit sum into EMIs, while others may not charge any fee at all. During the holiday season, many banks reduce or eliminate this processing cost, making it easier to shop. Period of Repayment The length of time you have to pay back the loan is flexible, falling between 6 months and 2 years. In any case, it’s worth noting that the interest rate will be lower if the repayment period is shorter. Termination and Foreclosure In the event that you are successful in accumulating the outstanding loan amount, you will be able to repay the loan before the end of the period during which you are required to make repayments. Your loan may be foreclosed upon or cancelled. However, in such circumstances, different banks may charge a minor foreclosure fee while others may not. Tips To Make Credit Card EMIs Work For You Go with a shorter term The larger the loan term, the larger the interest payment will be. The minimal term should be one in which you can afford to make the payments. Be cautious During the holiday season, several credit cards waive the processing fees associated with the EMI option. Make use of it. Read the terms and conditions properly Any of the cards do not impose prepayment penalties. Prior to making a final decision, it is important to learn about the pre-closing terms and circumstances. Feel free to inquire It’s possible that during the holiday season if you choose easy EMI credit cards, you won’t be eligible for in-store cash savings. Many stores provide discounts on things bought straight up by cash/card only. But if you ask for discounts, you might be in luck because the holiday season is a time of goodwill and generosity. Don’t default If you choose the EMI option with your credit card, be sure you pay on time every time. Your credit score will take a hit if you don’t pay your EMI on time every month. [B-02] Conclusion Though it’s simple to have your credit card payments restructured as instalment payments, there are several issues to think about before making the switch. First and foremost, you should know that not all credit card issuers provide EMI instalments and that not all credit card customers would qualify for it. If you must use your credit card for an EMI purchase, make the loan for the shortest possible duration. If you want to know how much you can afford to charge on your credit card, an EMI calculator will be very useful. Want instant funds? Apply for a quick personal loan with Piramal Finance and get up to Rs. 10 lakhs.
08-11-2023
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Four Ways To Get Your Travel Fund Ready For That Upcoming Vacation

Vacations can be a fantastic way to escape life’s stresses, but they can also be costly. If you’ve been saving your extra cash to take that long-awaited vacation, it might help to learn how to save money, so you have more cash available for your upcoming trip! The four tips in this article should give you plenty of ideas about how to get your travel fund ready for your upcoming vacation! [B-01] What is a Travel Fund? A travel fund is savings account you create to save up for your next vacation. You can start by setting aside a minimum weekly amount and then increase your contributions as you get closer to your vacation date. Once you’ve saved enough money, it’s time to start thinking about your destination! If you have flexibility in your schedule and budget, consider visiting multiple countries on one trip. How Much Minimum Travel Fund Should You have? Having a travel fund before you embark on your journey is important, as this will help you avoid last-minute emergencies. To plan for such events, knowing how much minimum travel fund you should have in India is important. The amount of money needed varies depending on the type of trip you are taking. Here are four guidelines that can help you calculate what is suitable for your trip – -The length of your stay -The cost of transportation -The cost of accommodations -What kind of food do you want to eat 4 Ways to get your Travel Fund Ready There are multiple ways that people opt to grow their travel fund. Some of the prominent ones are: 1) Set up a dedicated savings account To get your travel fund ready, set up a dedicated savings account. It is the first step to getting your money saved and where you will deposit all of your extra cash that you’re not already spending on necessities. It’s important to ensure that this account is easy to access and has low or no fees to take advantage of unexpected windfalls like tax refunds or bonuses at work. Be sure to keep an accurate record of the deposits and track how much money has accumulated over time. Opening a savings account may seem unnecessary, but it’s the most important. It can also be the basis for getting a personal loan for travel in the future. 2) Do an Additional Job to have Additional Income flow for the Travel Fund If your goal is to save for a vacation, then the best thing you can do is get another job. The more money you make from your additional job, the faster you can reach your goal. Just think about how much each hour of work can contribute towards that coveted travel fund! Nowadays, many people have side hustles and have succeeded in doing so. Getting an extra gig may seem challenging, but you can surely try. One way is to have an updated resume that clearly outlines all skills and talents and any previous experience or qualifications you have acquired over time (although this may not always be necessary). Click on Ways to Begin a Travel Fund for Your Future Vacation – Funender.com for more details. 3) Try to Reduce Your Debt to increase Your Travel Fund To make your travel fund more accessible, you should try to reduce any existing debt. It can be done by looking at your budget and making some cuts where necessary. Doing this will increase your money for your vacation without having to dip into your savings or take out a loan. In addition, try to save as much as possible before setting off on your journey. You should strive to save at least 20% of the total cost of the trip to avoid using a credit card or cash advances while abroad. Saving up beforehand will allow you to focus more on fun activities and less time worrying about finances during your trip. 4) Travel Loan Offers An excellent way to prepare your travel fund for a vacation is to take out a loan for travel. Taking out a vacation loan has many benefits, and it could be the perfect solution for you. These loans can be taken out for a specific time to save money before your next trip. It also means that you have the funds available in advance, which could make planning easier for you. If you plan an upcoming trip, this may be the perfect opportunity to take out a travel loan! You need to talk to the financial institution that will give you the best deal in terms of the interest amount that you have to return. The first thing to consider when looking for a travel loan is the length of time you will need the funds. Next, consider what type of traveller you will be while abroad- those who want to partake in extreme activities might need more funds than those who enjoy wine tours or culture tours. Finally, ensure you read all information carefully- not just about interest rates or repayment periods- but also any possible exclusions that might be part of the agreement. Additionally, when travelling, it’s important to keep your expenses low. One way to do this is using a rewards credit card that doesn’t have foreign transaction fees. Plus, many cards in India offer great bonuses when you use them abroad. Rewards can be points or cash back, and these bonuses’ value can add up! Click on Travel Loan – Interest rates, Eligibility, Document Required & Apply Now (bankbazaar.com) for more details. [B-02] Conclusion Start now if you want enough money saved up for your trip. The more you wait, the better the chances are that something unexpected will happen, and you’ll have to save even more. Once you’re ready with a plan, budgeting what you’re saving can help make sure there’s always money left over in your bank account. That way, when that once-in-a-lifetime opportunity arises, you’ll be able to take full advantage of it! For more information about growing travel funds, visit PersonalLoan (piramalfinance.com).
08-11-2023
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