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Banking

What is net banking, and how does it work?

Net banking encompasses the area of digital commerce, or e-commerce. The rise in internet use has provided many ways to transact money in recent years. Everything is possible if you do your bank login right from booking flight tickets to shopping online. Net banking is a very helpful process that makes your life easier. In basic terms, net banking is a digital method where a transaction or transfer of money is done using the internet. A big advantage of net banking is that you don’t have to go to the bank physically for transactions. You can use the internet to transfer funds, money, and payments. You only need a functional computer (laptop or desktop) or a smartphone with a good internet connection. [B-01] Certain unique features of net banking include: Tracking, managing, and monitoring bank balances and statements are easier. NEFT, RTGS, and IMPS methods can be used to transfer funds online. It is a secure method of banking. It allows password-protected banking. A bill payment system that is quick and easy. To channel or cancel automatic payments. Easily accessible banking services, which can be financial or non-financial. The accessibility of your bank account increases as it becomes more convenient to access it anytime, anywhere. Why choose internet banking? Technology has changed our way of living in many ways. We are now in a busy world where we have no time to spend in banks waiting in a queue. Technology makes your life easier by allowing you to pay the money within seconds. Maybe in the future, we will just use online transactions and not use notes and coins made of paper and metal. So that brings us to the question: how does net banking work? The bank will send you a user ID and password when a bank account is opened. Note the password and the user ID correctly because you will need them from time to time; after that, visit the bank’s website on your computer or smartphone. The net banking login asks for the necessary information that you need to fill up on the website. After the bank login is activated, an option appears where you can change the password. Finally, you can easily access the financial services that your bank has to offer. Remember that bank login should be done carefully online. Make sure to check the website properly to avoid any kind of fraud. You need to know all about bank logins if you plan to do online banking because it’s the first step. For opening a net banking account, there are a few steps which are as follows: Step 1: The first step is applying for a net banking account. You need to reach the bank to activate your online banking. If you have an existing account, you can talk to the bank administration about it. Approval from the bank is necessary for starting online services. You cannot use the services because high security is necessary for digital transactions. Once your bank has accepted your request for online banking, it sends you two key codes that allow you to continue with your net banking login. Step 2: Collect the User ID & Password for your net banking to work; have the User ID and password for bank login. You must request the bank for a User ID for you and a password. For new account applications, the user ID and password are given when opening the account. Step 3: Generating a new user ID requires a bank to provide you with a set of numbers. The bank will send the concealed document via electronic communication. The given password is used for bank login. After the first net banking login is done, the bank then requests that the users change their previous password. This is done to maintain the high security of the account. Changing the user ID after authenticating the first log-in is also advisable to ensure that you have a new set of user IDs and passwords. You can change the user ID and password with the following steps: Firstly, you need to log in with your bank’s online website. Then enter your respective User ID as well as password. They will be provided beforehand by your bank. Then you can choose to log out. When logging out, you will see one tab on the bank’s website for the new user ID. This will help you create a new or “fresh” user ID. Once you choose a new User ID option, the website will ask for details from your side, like preliminary information like your date of birth (DOB), profession, mobile number, email ID, address, and other relevant information. The bank will already have this database secured with your KYC. After entering vital information, you will be sent a one-time password to your registered phone number. The second stage of security assurance strengthens the security system to avoid unethical hacking. You need to enter this password to create your desired user ID. Similarly, follow all the same steps to create a new password for your account. [B-02] Conclusion Overall, we can see the rising importance of Net banking in today’s time. It is very important that you first do the Net banking login properly before getting into any transaction. You can start your bank login in any previous account or start afresh. Be careful before putting in the details on the website to avoid unethical hacking of personal details. Are you looking for similar finance blogs? Visit the Piramal Finance website and help yourself to the knowledge of wide-ranging financial products and services, especially credit cards and personal loans.
08-11-2023
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Other

7 Things To Know About Nifty Futures

The Nifty Fifty is an index of fifty companies listed on the National Stock Exchange (NSE) of India. Trading in Nifty futures is quite risky but beneficial at the same time. Are you planning to invest in the Nifty Fifty? Before doing so, it is important to know a few things. But first, let’s take an overview of the Nifty Fifty index and Nifty futures. [B-01] A Quick Overview of the Nifty Fifty Index and Nifty Futures The Nifty Futures is a financial instrument that gets its value from a related asset, i.e., the Nifty fifty index. So, the Nifty Fifty index is proportional to the Nifty Futures contract. If the value of the index rises, so will the value of the futures contract; if the Nifty falls, so do the Nifty futures. A buyer or seller has the right to trade the Nifty Fifty index at a predetermined price at a future date. But before you invest, there are a few things you should know. 7 Things to Know Before Investing in Nifty Futures Don’t make excessive investments. You never pay the entire amount when buying or selling a nifty future. Instead, you have to pay a margin of only 10% in normal trade and 5% in intraday trade. As you only pay a part of your investment, you may end up investing in many contracts. If the market goes as per your expectations, you will gain. But if the market’s decisions go against you, you will face losses. So, prevent yourself from investing. Look into open interest data before taking a position. Before investing in Nifty Futures, one must look into the open interest data, because the data provides a clearer picture of the trend accumulation. It tells you whether the investment is heading toward the longer side or the shorter side. For example, if the number of contracts sold is higher than the number of purchases, the market will be bearish soon. But if the contracts purchased are higher than those sold, the market will be bullish soon. Taking both situations into account will help you with decision-making. Know the counterparty’s perspective. There are two parties involved in Nifty futures contracts. One is the buyer of the contract, and the other is the seller (counterparty). It is crucial to understand the intention or perspective of the counterparty to know the reason for the price levels. For this purpose, open interest data will provide you with the necessary information. In short, understanding the counterparty perspective clarifies the Nifty Futures investment. Be watchful of overnight risks. Profits and losses are an integral part of investing in Nifty futures. Whether you are buying Nifty futures or selling them, there is a risk involved on both sides. Many buyers and sellers think closing stop-loss deals during the day is the only side of Nifty Futures contracts. But there is another side to the coin: an overnight risk that occurs in the after-hours of the market. And these overnight risks are way riskier than those of stocks. For instance, if you invest during the day, there may be a downward slope at night due to changes in market factors. Thus, be watchful of overnight risks. Make sure the future spreads are marginal. The “spot” refers to the current security price at which you buy or sell at a particular time and place. The difference between the spot price of Nifty fifty and the future contracts of Nifty is called the “future spread.” It is necessary to be cautious of this spread while trading Nifty futures. For instance, the market may behave positively or negatively. When this happens, you shouldn’t trade because it means that future contracts are either too expensive or too cheap. Keep an eye on extra costs and related tax implications. Investing in Nifty Futures comes with some extra costs, such as statutory and brokerage fees. These costs have a strong impact on your breakeven point (the point where the total cost of operations is equal to total sales or revenue). The tax applies to Nifty futures as well. Any profit or loss in Nifty futures is a capital profit or loss. These carry tax implications with them. Keep an eye on these extra costs to save your money for future investments. Try to understand the different margins. While buying or selling nifty futures contracts, there’s always the possibility of profits or losses. Yet, while stop-losses are essential in trading, you should also understand the margins before investing. The initial margin for the contract includes two margins: the VAR (value at risk) and the ELM (extreme loss margin). As the ELM is no longer optional, the broker should collect both of these margins. Besides, you have to pay MTM (mark-to-market) margins daily to ease your capital allocation. [B-02] Conclusion Investing in Nifty Futures is quite a challenge for newbies. Moreover, experienced investors are familiar with the ups and downs of the market. For both newbies and veterans, keeping these seven things in mind will make the journey easy and profitable. Read more related blogs on the Piramal Finance website to explore our financial products and services, especially those on personal loans, credit cards, and financial calculators.
08-11-2023
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Mutual Funds

Why You Don’t Need A Demat Account To Invest In Mutual Funds

Funds are an essential part of everyone’s investment portfolios. Mutual funds are an excellent way to diversify risk across multiple investments and asset classes such as stocks, bonds, and commodities. However, you don’t need a Demat account to invest in mutual funds investment plans. This makes it easier to start investing in them if you haven’t already started. In this article, we’ll explore the various ways you can invest in mutual funds without getting your Demat account. [B-01] What is a Demat account? It’s an account that you can open to buy and sell stocks, shares, and securities. It’s an electronic platform where investors store their bought securities, such as equities in a virtual wallet. This type of account is available to individual investors as well as institutions. Getting a Demat account makes it easier for you to trade online and invest your money in various investment instruments because you don’t have to go through the process of opening an entirely new brokerage account. However, you don’t need a Demat account to invest in mutual funds. Mutual funds investment plans are offered by mutual funds companies that employ experienced portfolio managers to manage the investment. All you need to do is contact the company with which you want to open an account and request a mutual funds investment plan. Advantages of having a Demat account to invest in mutual funds Finding mutual funds investment plans that suit your risk profile may be challenging without a Demat account. If you invest directly in mutual funds investment plans, you may incur higher brokerage costs and taxes. The market value of the securities in your account may fall below the cost of buying them, or you may need to sell the shares for other reasons. Unless you want to hold all your mutual funds investment plans in physical form, a Demat account can provide benefits like lower transaction charges and more convenient stock transfers. However, many investors don’t want their money stuck inside trading accounts, so they look for the best mutual funds to invest in. Investors with large portfolios can benefit from having their investments placed in mutual funds with no lock-in period or minimum contribution amounts because the best mutual funds to invest in do not require opening a Demat account. Other benefits of holding mutual funds investment plans in a Demat account include increased liquidity, ease of transferability, and less time-consuming paperwork. However, there are certain disadvantages associated with these funds. For instance, transferring holdings from your name into someone else’s name might be necessary. A lot relies on how much flexibility you desire in your trading frequency and the type of mutual funds investment plans you are interested in. What are the alternatives to having a Demat account for mutual funds? Investing in mutual funds can be a great way to start saving for retirement or just saving up some money for a rainy day. However, you don’t always need a Demat account to invest in mutual funds. Mutual fund investment plans offer investors a simple way to invest while keeping assets safe. It might seem like a Demat account is an important part of mutual funds, but it is one of several ways to invest in mutual funds. Many companies offering the best mutual funds to invest in have a wide variety of options available to investors which don’t require them to open a special type of account. Of course, if you’re looking for a more hands-on approach to investing in mutual funds, it’s still possible to do so without opening a Demat account. Investing in mutual funds investment plans is a great way to diversify your portfolio and access investment opportunities that you may not have otherwise. Unfortunately, it can be difficult without a Demat account because these types of accounts are typically needed for purchasing the best mutual funds to invest in. Fortunately, alternative methods exist for investing in mutual funds investment plans without a Demat account. Many companies allow you to purchase shares of their mutual funds using a bank transfer from your current account. As long as the transaction is funded by cash or a loan from your current bank, it will count as investing in mutual funds without needing a Demat account. Online brokers often allow you to invest in mutual funds without opening a separate account. They do so by accepting orders for the best mutual funds to invest in. Buying shares of mutual funds through these transactions does not cost anything because they are carried out electronically rather than on paper. You can purchase units of the best mutual funds to invest in by opting for systematic investments annually. These plans allow you to buy one or more plans simultaneously. Alternatively, if you want more flexibility than periodic investments, SIPs might be a good option. With SIPs, your money goes directly into the mutual fund’s investment plans of your choice every month or quarterly, depending on which option best suits your needs. Another benefit of this method is that you do not require brokerage services like those offered through a Demat account. Finally, another way to invest in mutual funds without a Demat account is by purchasing units of cooperative banks’ shares. So, while having a Demat account helps while investing in mutual funds, there are plenty of other ways to go about it! [B-02] Conclusion Mutual funds are a great way to diversify your portfolio and find investments for the long term. If you are looking for a low-cost, low-risk way to start investing, mutual funds investment plans are the way to go. And if you already have a Demat account you never use, don’t worry: having the best mutual funds to invest in is not necessary. Just open up an account with any mutual funds company of your choice, fund it with some money, and then purchase some units or shares of the best mutual funds to invest in. If you need help with finances, you can always contact experts such as Piramal Finance to guide you through your financial worries. They will suggest which mutual funds are best for you to invest in and help take care of your personal finance requirements if any.
08-11-2023
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Other

Know How Compound Interest Calculator Works

When you earn interest on interest, this component is called compound interest. You may invest Rs 1000 in a deposit. This deposit pays interest at the rate of 8% p.a. The interest is payable twice a year. In this case, you earn compound interest. The first interest instalment is credited after six months. This interest amounts to Rs 40. This interest is calculated as Rs 1000X 8%X ½. This calculation represents simple interest. This interest is credited biannually. During the second half, an amount of Rs 1040 is invested. This amount is the total of the principal (Rs 1000) and the simple interest(Rs 40). So interest for the second half year is Rs.1040X8% X1/2 = Rs 41.6. Rs 40 is the simple interest, + Rs 1.46 is the compound interest portion. [B-01] Generic Formula to calculate Compound Interest The generic formula used by a compound interest calculator to calculate compound interest is as follows:- A= P*(1+r/n) ^ nt Where: A is the Maturity Amount, P is the principal or capital originally invested, r is the interest rate applicable n is the number of times interest is paid t is the number of years or total period. Illustration to show the difference between simple interest and compound interest Let us assume you have invested an amount of Rs 10,000 at 10% p.a. for 5 years. The simple interest uses the formula – Prt /100 The calculation of simple interest is as follows – 10000X 10/100X 5= Rs 5000 Suppose interest is credited twice annually. Then, the calculation of compound interest is as follows:- Total Interest =10000 X (1+ 10/2) ^(10*2)= Rs 6,288.6 This extra interest due to compounding = Rs 6,288.6-Rs 5,000 = Rs 1,288.6. This extra interest is the compound interest portion. Where is compound interest applied? You earn compound interest on deposits of money with banks. Most loan interest calculators also apply compound interest formulas. How to use a compound interest calculator There are many compound interest calculators available online. You can use any of them for your calculations How to use an online compound interest calculator Step1: enter the amount you want to invest Step 2: Enter the amount you want to invest monthly or yearly Step 3: No of years you want to stay invested Step 4: What is the total annual rate of return expected Note: You must choose a frequency of interest payments other than yearly. This frequency could be monthly, quarterly, or semi-annual. This method will result in compound interest calculation. Uses of the compound interest calculator The compound interest calculator will display the results within seconds. You can google compound interest calculator. There are several online calculators for compound interest. Interest may accumulate on a monthly basis. You don’t have to struggle with long-term compound interest calculations. The compound interest calculator may quickly do complicated calculations. It is reliable and practical. Benefits you derive from compound interest calculators You can understand the growth of your equity investments with the compounding effect. You can quickly figure out how much you have to save and invest monthly. It helps in your wealth maximization. You can plan your financial requirements very easily You may decide to break a deposit or a financial investment midway. You can quickly figure out the opportunity losses that you will incur. You can understand how various savings schemes in India work. You can project the growth of your savings over long periods. Benefits of compound interest You earn interest on your invested interest. The longer you remain invested, the more your savings will accumulate. Inflation reduces the purchasing power of your savings. Your real income also reduces. Compounding of returns protects you from this loss to some extent You or your company may have a lot of liquid funds. You can invest in assets where the return is compounded The more frequent the compounding, the higher the return earned. Compound Interest on loans Compound interest is calculated on both savings and loans. Interest is compounded daily on overdrafts and other instant loans for longer periods. That is why the effective interest rate on loans is so much higher. In comparison, interest rates on deposits are much lower. Formula to calculate compound interest on loans LA= LP*(1+r/n) ^ nt Where LA is the maturity amount LP is the Loan principal All other terms have been explained previously The calculation of totalIllustration for the calculation of compound interest on loans The loan principal is Rs 10,000. the interest rate on the loan is 10%. The period of the loan is 10 years. Calculation of total interest including the compound interest is as follows:- Loan maturity amount payable = 10000 X (1+ (10/365X1/100)) ^ (10*365). After 10 years, the total amount you would pay would be Rs 27,719. This is the original principal of Rs10,000 + simple interest of Rs 10,000 and compound interest of Rs 7,719. Compound interest arises because of the interest on interest calculation. This is quite high due to daily compounding on the loan. The consequence of daily compounding of interest So now you know why overdraft and line of credit loan interest rates are so high. You must make sure that you pay back the loan principal and interest on schedule. You can avoid large balances and high compound interest payments. [B-02] Key Takeaways Compound interest works to your benefit if you earn it on your savings. It works against your benefit on your loans. To discover the outcome of the final calculations, always use an online compound interest calculator. You must be aware of how compounding may ultimately affect your debts or savings. You will be more prepared in this manner. Longer periods and more frequent compounding result in higher compound interest. If you have any loan requirements, contact Piramal Finance. Their experts can help you calculate how much you need to borrow and how much EMIs you need to pay. *Please note that the formulae for compound interest and simple interest are showing as plagiarism. They are generic formulae available on many sites.
08-11-2023
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Stocks Markets

Simple Share Trading Apps To Start Online Trading

With the rising popularity of online trading, there has been a growing demand for different trading applications. The app is becoming an essential tool for traders to keep track of all their trades and analyze performance in real-time. Today, more than half of retail investors use apps to get better market access, run analyses on companies, and manage their portfolios. These apps have made trading accessible to everyone, not just the tech-savvy or rich. To help you start your trading journey as smoothly as possible, we’ve gathered 5 of the best free online trading apps to get you started! But first, let us understand: what is mobile trading? [B-01] What is mobile trading? Mobile trading is using a mobile device, such as a smartphone or tablet, to trade on the market. Traders can keep an eye on the price of a stock or commodity and other data from wherever they are. Mobile trading is the buying and selling of stocks, bonds, cryptocurrencies, and other investments. The Securities and Exchange Board of India (SEBI) approved mobile phone trading in 2010. The advantages of mobile trading are that it is easy and doesn’t need much setup. It’s easier to carry around than a desktop computer or laptop. And because most smartphones have internet access built into them, you don’t need an extra wireless connection to get online. This makes it very accessible for anyone interested in trading. Mobile traders also have access to real-time data. They can see how the price is moving and acting. Top 5 Share Trading Apps for Beginners Here are the top Share Trading Apps in India to start online trading with: Zerodha Kite Zerodha Kite is one of the most popular mobile share trading apps by Zerodha. It is on iOS and Android and is one of the country’s finest trading apps for the volume of trade activity. It’s simple to use and straightforward. There are no cluttered components to navigate or comprehend. Users may search for and investigate simple or complicated stocks using this tool. They may also use real-time charts to apply over 100 technical indicators. Users can also create a personal watchlist consisting of all-time data. Trade Price: ₹20/trade. 5 Paisa Five paisa discount brokers own the app. 5 paisa is a smart, functional share. The trading app is popular with investors and traders. It provides a variety of items, including stocks, mutual funds, commodities, and currency. The app includes all the features an investor or trader desires. Also providing research and advisory, 5 paisa also offers it. It has a guest login function and an easy Demat opening function for beginners. It provides real-time updates and quotes from the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), and it has an auto-investing feature. You can invest for free through the app in the top mutual funds. Trade Price: ₹20/trade. Upstox Pro Trading App Upstox is one of India’s finest stockbrokers and a popular mobile share trading app. Upstox Securities was once called RKSV Securities and was headquartered in Mumbai, India’s economic capital. It has a web version as well. Upstox has a complicated share market app occupied by unique features to attract more people. The Upstox Pro Trading share market app has brokers charged with all trading activities and delivery trades. Users can find simple and complex stocks via a universal search tool. There are over 100 technical indicators that may apply to real-time charts. TFC enables users to trade from charts. It provides historical data for the last 10 years. One cannot verify the links between bank account details. Trade Price: ₹20/trade. Groww There are no hidden charges or complicated menus when you use the Groww app. It is a great choice for beginners because of its simple interface. The app-based platform allows investors to make free direct investments in mutual funds. Since it began as the most basic of apps, it is a time and location-independent stock market app. It is, without a doubt, the finest trading app in India. This app lets you invest in stocks and other financial tools like digital gold assets, fixed deposits, and mutual funds. You can also track your portfolio’s performance, analyze company news, and make investment decisions. The best part is that you can invest in UPI with a single click. Trade Price: ₹20/trade or 0.05% (whichever is lower). Angel Broking Online Angel Broking’s Angel Speed Pro, a share market app by Angel Broking, provides an easy trading experience with a one-window trading space. Angel Broking is a veteran campaigner with over 30 years of presence, one of the first to enter India. It offers investors insurance, mutual funds, brokerage, and other financial products & services. It also gives stock prices in a snap and provides instant market information. It provides real-time index information and lets you view several indices. You can get intraday chart news. Trade Charges: ₹20/trade [B-02] Conclusion You never know what you’ll find lurking inside an app when you install it. This article highlights the five best trading apps in India. While there are many more out there, these are our picks for the best available. These apps are perfect for beginners starting to dip their toes into investing. Their features are straightforward, and the charges are also explained in the article. So you can make a choice. If you need help with finances, you can always take the help of a financial expert like Piramal Finance. They will suggest what’s best for you and help take care of your loan requirements, if any.
08-11-2023
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Banking

Step-by-step guide on how to get a bank statement

A bank statement is a record of all of the transfers made by your account. It shows all of the credit and debit amounts for your account. The records are generally for one month. The service is available for both current and savings accounts. Most CAs urge you to generate account statements. They use it to plan the best way for you to pay taxes. Earlier, these were only provided at the bank using a passbook. Now you can generate it easily on your mobile phone. Even now, you can visit the bank physically and get the statement. The bank will then provide you with a printed record. But the best way is to get one online. You don’t need to stand in line outside the bank. You can get it with a few touches on your mobile device. [B-01] What information is included A bank statement will consist of the following details, but won’t be limited to: Your detailsThe statement has details about the account holder. It includes your name, address, mobile number, and PAN number. Your bank and account detailsIt will provide the bank name and IFSC number. It will further mention your account number and the type of account. Transfer historyIt includes a record of all credits and debits. These entries have specific dates and timestamps. The transferred amounts are recorded. The details about who paid and who received them are also mentioned. You can also find out the initial and final balance for that month. Why should we get a bank statement? It serves many purposes. Here are a few examples: It helps to make a monthly budget and keep track of your expenses. Regularly reviewing it also helps you spot fraud. It can also help you notice missing funds or financial errors. These are also filed with loan applications or income tax returns. They are also used to calculate your credit score. You can also identify the bank charges and the interest earned. Hence, you must keep monthly statements for up to a year. However, do not forget to destroy them after use. Otherwise, someone else can find out your account information and misuse it. What do you need to get a bank statement? You need a laptop, computer, or smartphone with an internet facility. You have an active net banking facility with valid login details. You must install the mobile banking app on your phone. The bank must have your KYC details. Your mobile number and email address must be linked to your bank account. How can you get an account statement for your bank account? As pointed out earlier, the easiest way is to generate it online. This bank statement is called an “e-statement.” You can go to the bank if you don’t have an internet facility. You will have to stand in a queue and submit a paper form. Then the bank will give you the printed statement. You can also call them to subscribe for a printed copy. They provide this service every month for a small fee. However, you can get it in real time using your mobile phone. Here are the ways to get an account statement online on your smartphone: Via Net Banking: Most banks ask if you want net banking when you open an account. You can also activate it after opening your account. Follow these steps to get your bank statement using net banking: Select the option of retail banking on the bank’s website. They provide separate facilities for individuals and businesses. Log in to your retail banking account using your login details. Make sure your password is valid. You need to generate a new one if it expires. You need to click on “forgot password” and proceed as per instructions if you don’t remember the password. Now look for the account you want to manage. After selecting the account, go to the “Transactions” or “Account” menu. Select the option to obtain the account statement. You will now see a list of your transactions on the screen. You can set the dates for which you want the statement. After selecting the duration, click on “Search” or “Submit.” You will now see a list of all the transfers for your selected period. Choose the format and click on “download” to get your statement. Via mobile banking The same process can be done using the bank’s mobile app. Follow these steps to download the account statement: Log in to the app with your net banking credentials. You can also set up an mPIN to log into the app. On the screen, select the option that says “Account/Passbook/Transactions.” Choose the account type and select the account you want to manage. Now tap on the account statement option. A list of all transfers will appear on the screen. Choose the format, and then click on “download.” The file is now present on your phone. Monthly subscription: Most banks send the account statement to your email address every month. Every e-statement is a secure file with a password. Different banks have different policies for passwords. Getting a mini statement A mini statement is a record of your last five transactions. You can get one using the same steps as above. You can also get it without the internet. Just send a text or a missed call to the helpline number from your mobile number. You will get the mini-statement in a text message. It will only show the last five transactions. However, other important details are not included. [B-02] Conclusion Most banks now provide the option of getting e-statements. Every month, you will receive these via email. The file is password protected, so no one else can misuse it. Remember to update your mobile number and email address with the bank. This is crucial, so use the best banking facilities. However, make sure you destroy printed statements after use. E-statements must also be deleted after use. You need to do this to keep your bank account safe. To get more information on financial products and services, such as bank statements, financial calculators, and personal loans, visit Piramal Finance.
08-11-2023
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Other

How To Use The CAGR Calculator Online?

Entrepreneurs want growth in their businesses while investors want growth in their investments. However, whether the businesses or the investments are growing or not will become clear only after one has measured their growth. So, how is this growth measured in the case of businesses and investments? The answer lies in the CAGR. What is it? Let’s find out! [B-01] What is CAGR? CAGR, also known as compound annual growth rate, is a measuring tool for determining how much growth a company or investment has achieved. It shows growth as a percentage compounded yearly. As CAGR also considers the time value of money, the actual returns on investment generated over a year get reflected through CAGR. To calculate the CAGR, the following formula is used: CAGR = [(Ending Value/Beginning Value) ^ (1/N)] – 1 Let’s understand this formula with a practical example: Amount invested: Rs. 15,000 Investment value after 3 years: Rs. 30,000 Therefore, N = 3 years CAGR = (30,000/15,000) ^ (1/3) – 1 = 25.99% If you want to find the absolute return on your investment, then you can use the following formula: Absolute return = [(30,000 – 15,000) / 15,000] * 100 = 100% It is challenging to use the above formula for every calculation. This is particularly true when you are planning your finances and examining several asset classes with differing rates of return. For instance, if you have investments in five different asset classes and want to know how each one is performing, you may do so by calculating the compound annual growth rate of each asset class. However, applying the above method will lengthen the process. What then is the alternative? CAGR calculator The CAGR calculator is a utility tool that allows you to calculate the compounded annual growth rate based on your inputs. It helps a lot when it comes to financial planning and decision-making. Following are the steps to use the CAGR calculator: Fill in the initial value of the investment. This is the amount that you have invested in any of your asset classes. Fill in the final value of the investment. The final value shall be as on the date for which you want to calculate your CAGR. Fill in ‘N’. ‘N’ represents the number of years for which you held your investment. For instance, if you invested on 1st January 2019 and redeemed your investments on 31st December 2021, then ‘N’ will be 2 years. What are the benefits of the CAGR calculator? The CAGR calculator online is one of the most used financial tools among investors. Following are the benefits of the CAGR calculator that makes it such a popular tool amongst investors: It is easy to use. With minimal input, you get your desired results. You can also use it as a mutual fund calculator. In case you have made lumpsum investments in any mutual fund, then you just need to enter the amount invested, its value on a particular date, and the number of years. It allows you to make comparisons easily with quick results. Just enter the inputs and you get your CAGR immediately. You can use the CAGR return calculator for calculating returns on your existing investments and restructure your portfolio such that to minimize the low-return yielding assets and increase the proportion of high-return yielding investments The CAGR calculator online is beneficial when it comes to future financial planning. You can set your investment goals and targets you want to achieve over a period of time and determine the class of asset accordingly. For instance, if you have Rs. 2,00,000 today and within 5 years, you will require Rs. 4,50,000, then you need to invest Rs. 2,00,000 such that it grows with a CAGR of 17.61%. Therefore, you just need to select an asset class that provides an annual return of 17%-18%. Investment decisions get a lot easier and more accurate with the CAGR calculator. The CAGR calculator can be used to compare the performance of any stock with its peers as well as to the performance of other industries. What are the limitations of the CAGR calculator? While the CAGR calculator is a handy tool, it certainly has its own limitations. The following are the limitations of the CAGR calculator: The CAGR calculator does not consider volatility. For instance, if you have derived a CGAR of 30% over a period of 5 years, then the CAGR calculator assumes that you have received a 30% growth rate for each of the 5 years. It does not consider the volatility i.e., for a particular year, the return may be 20% while for another year, the return may be 45%. The CAGR calculator can be used to derive returns only for lumpsum investments. When it comes to calculating returns on the Systematic Investment Plan (SIP), CAGR cannot calculate the same. The reason is that CAGR only considers the initial investment and final investment value whereas, in the case of SIP, the investments are done each month over a period of time. Therefore, to calculate the return on SIP, XIRR is being used. CAGR does not account for the risk involved to achieve such returns; it only displays the return on investment. Before making an investment, it’s important to understand the risk. For instance, risk-adjusted return is more significant than CAGR returns in the case of investments in equities, shares and instruments. Treynor’s ratio and Sharpe’s ratio must be used to evaluate investment risk. [B-02] In a nutshell The CAGR return calculator has been the key decision driver for many investors. When it comes to investments where you have set financial goals, it is important to make correct decisions to achieve your goals. This is because growth in investment requires time and once you end up making a wrong investment decision, you cannot reverse it. Therefore, it is important to make use of the utilities smartly that you have in hand and step ahead to make the right investment decisions. Are you using the CAGR calculator? If not, then begin now!
08-11-2023
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Other

Demat Account to Safeguard Your Investments: 2022 Edition

What is a Demat Account? Before we talk about trading, we must first understand a Demat account. Demat is short for a Dematerialized account. It holds electronic records of securities and shares. Besides, you can also store bonds and mutual funds. A Demat account is a must for trading. It is similar to using a savings account to keep your money. There are many benefits of owning a Demat account. Now, there are different types of Demat accounts. We will list them below and look at them in detail: Regular Demat Account: This Demat account aims to ease the trading process. It is the best Demat account you can use. Repatriable Demat Account: This account is for NRIs. It allows you can transfer funds to other countries. Non-Repatriable Demat Account: This account does not allow you to transfer funds abroad. [B-01] Eligibility for Demat Account Opening There are two things to check before opening a Demat account. The individual should be a resident citizen of the country The individual should be over 18 years of age. Essential Documents to Open a Demat Account Online Now, let us see the necessary documents for the Demat account. Identity proof: You must submit an identity proof having address and photograph. Also, a PAN card is mandatory. Income proof: You must submit either three months’ salary slips or an ITR statement. Signature: You must submit your signature on white paper. The sign should match the one on the PAN card. Photograph: You need one passport-size picture. Bank proof: You must submit bank proof like bank account statements. Address proof: You must submit your Aadhar card, driving license, passport, or voter ID card. Popular Demat Account Providers: Top 5 Picks Lets us have a look at the popular Demat account providers in India. We will discuss their benefits and features. 1. Zerodha Demat Account Zerodha is the best Demat account provider in the country. Today, it has a customer base of 5 million customers. The Demat account opening is a simple process. It offers a Zerodha app that teaches you everything about trading. It also lets you build your trading platform. Also, it has a Q&A section and blogs for all queries. Features: Easy to use. No hidden charges. Has a free online portal for learning the art of trading. 2. Upstox Upstox is a leading Demat account provider in India. Opening a Demat account online in Upstox helps you save money. It is a great trading platform with a website and mobile application. You can trade in mutual funds and shares. You get live insights on market information. Also, you can view live reports on the app. Upstox allows you to trade from anywhere, anytime. Join Upstox today! Features: Zero brokerage. Easy opening for a Demat account online. It has a mobile application for Android & iOS. Offers various plans and services. 3. ICICI Direct Demat Account ICICI Direct is a reliable name in the market. It has a customer base of over 20 lakh customers. They were the no.1 choice of investors until Zerodha took over. They offer three plans you can choose from. The first is the Secure Plan, and the second is the Saver Plan. Finally, it has the Pre-Paid Brokerage Plan. It offers a 3-in-1 trading account. Also, it consists of the bank account, Demat account, and trading account. Features: Secure option to manage finances. No charges for opening an account. Get instant cash in under 1 hour. Ready reports for stock purchases. 4. Angel Broking Angel Broking Demat Account is a famous brand. It has over 6 million clients. There are many benefits of opening a Demat account with Angel Broking. For instance, opening an account is free of cost. You can access monthly statements, live tracking, and account status. Download the Angel One app to learn and trade like a pro. There are some fantastic rewards and offers you receive as a customer. So, sign up today for a Demat account! Features: Start a Demat account online in less than an hour. Get a chance to earn higher returns. Get access to many applications. It makes use of a digital-first approach in stock trading. 5. Sharekhan Demat Account Sharekhan is one of the best Demat account providers available today. It is a suitable choice for everyone who loves trading. Currently, it has over 16 lakh customers in over 570+ locations. The best part is the interactive tools they offer to understand the market. Besides, they also have portfolio management services. Furthermore, you can trade bonds, shares, mutual funds, forex, and more. Features: Provide advisory services. No hidden charges for DP transactions. High accuracy and seamless trading experience. Reliable stock brokers in the country. [B-02] The Bottom Line There are many factors to consider before opening a Demat account online. So, find your Demat account provider today. Visit the Piramal Finance website and help yourself to the knowledge of wide-ranging financial products and services, especially credit cards and personal loans. Let us know if you like the article, and share your thoughts below. Help us get better by sharing your valuable feedback!
08-11-2023
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Tax

Key Learnings from 2021 about Income Tax

The Finance Act is a legal way by which the Indian govt. controls financial policy. The Act applies to the entire country. Only Jammu and Kashmir and Andaman and the Nicobar Islands are exempt. It contains changes to policies about income tax, customs, GST, etc. Initially, a Financial Bill is presented in the parliament. This is done in the last week of February. After some changes, it is passed by the Parliament. Then the President of India approves it, and the bill becomes the Finance Act. The Finance Act 2020 contained rules for direct and indirect taxes effective from 1st January 2021. Direct taxes are fixed taxes that you pay directly to the govt. Income Tax, Property Tax, and Wealth Tax are direct taxes. Indirect taxes are the ones you pay to other people. GST, excise duty, etc., are indirect taxes. The Finance Act 2021, which came into effect on 1st July 2021, overrides Finance Act 2020. [B-01] Income Tax Rules 2021 The Income Tax Act 1961 governs different tax regulations in India. It contains legal policies regarding the payment of Income Tax. It ensures that taxes are managed properly by the Indian Govt. However, the Finance Act has the power to amend this Act. This is done to keep inflation in check. It is also done to match the laws with the economy. There are minor changes in Income Tax Rules change every year. Taxpayers must be aware of the changes to the income tax rules 2021 brought by the Finance Act, 2021. Key takeaways from changes to Income Tax Rules 2021 The Finance Act 2021 came into effect on 1st July 2021. The Income Tax (IT) Rules changes were not as major as in 2018. The changes to the Income Tax Rule for 2021 are as follows: TDS/TCS deduction at the original (higher) rate is now in effect. Tax Deducted at Source (TDS) is a tax that is deducted before a person, or a business makes an income. The aim is to avoid tax evasion. TDS is deducted only if the payment exceeds a certain threshold limit. The key amendments are for the purchase of goods, the pension income of eligible senior citizens, and higher TDS rates for people who don’t file ITR. They are as follows: From 1st July, a higher rate was deducted if you have not filed IT returns in the previous two years. Until Finance Act 2020, a higher TDS rate was deducted only for those who didn’t have PAN. The higher rate will be as follows: Twice the rate specified in the Income Tax Act, or Twice the rate in force, or 5% of the TDS rate A higher value of TDS will be deducted from non-salary payments. As per the Finance Act 2020, there was a concession of 25% in certain cases. Buyers of goods, responsible for paying any sum to any resident Indian, need to deduct tax @0.1% of the purchase amount. This shall be deducted if the purchase amount exceeds Rs. 50 Lakh. TDS needs to be deducted at the time of credit of the sum to the seller’s account. If there is a credit delay, it will be deducted at the time of payment. As per the Finance Act, 2020, businesses with a turnover of more than Rs 5 crores would be liable to an audit. The Finance Act 2021 increased that limit to Rs. 10 crores. Resident senior‐citizen aged 75 years or more, earning only pension income, will be exempt from filing ITR. New tax slabs are now out in FY 2021-2022 but for AY 2022-2023. This means the new tax slab will only be applicable for IT returns in 2022-2023 and not in 2021-2022. Yearly income in the financial year (FY) is considered in the tax slabs. The new tax slab of the Income Tax Rules 2021 applies to all individuals and is as follows: Income Rs 0-2.5 Lac: NIL Income Rs 2.5 Lac Rs – 3.0 Lac: 5% (tax rebate available) Income Rs 3.0 Lac Rs – 5.0 Lac: 5% (tax rebate available) Income Rs 5.0 Lac Rs – 7.5 Lac: 10% Income Rs 7.5 Lac Rs – 10.0 Lac: 15% Income Rs 10.0 Lac Rs – 12.5 Lac: 20% Income Rs 12.5 Lac Rs – 15.0 Lac: 25% Income Rs 15.0 Lac or above: 30% As per the Finance Act 2020, an Equalisation levy was not applicable if the eCommerce operator’s sales, turnover, or gross receipts were less than ₹ 2 crores during the previous year. For turnovers of more than 2 crores, the levy was applicable for Non-resident eCommerce providers. In the case of residential providers, the person paying to purchase the goods or services would pay the levy. With the Finance Act 2021, non-resident e-Commerce operators are not liable to pay the 2% Equalisation levy on the value of the sale of goods. There is a reduction in the time limit for filing IT returns. The IT returns for FY 2020-2021 are paid in the Assessment year (AY) 2021-2022. The last date for the original/revised IT returns filing for the previous FY is 31st December of the relevant AY. Any late fees will be levied, if applicable. However, owing to the Covid-19 pandemic, the last date for AY 2021-2022 is 31st January 2022. Until Finance Act 2020, Limited Liability Partnerships (LLPs) and Hindu United Families (HUFs) were liable to taxation. Finance Act 2021 removed LLPs and HUFs from the taxation scope for professionals. [B-02] Conclusion The Income Tax Act also called the Taxation Laws Act 2021, amended the IT Act 1961 and the Finance Act 2012. These changes in the Income Tax Rules for 2021 were introduced by the Finance Act 2021. The new tax rules provide lower rates, but businesses will need proper financial knowledge to thrive. The new rules were formed keeping in mind the effect of the pandemic and the possibility of another lockdown. Are you looking for similar finance blogs? Visit the Piramal Finance website and help yourself to the knowledge of wide-ranging financial products and services, especially financial calculators and a wide variety of loans.
08-11-2023
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