Category: Personal Finance

Bank Nifty Vs Fin Nifty: Where To Invest Your Money?

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Investment

oi-Sunil Fernandes

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Are you confused or facing dilemma about where to invest your money – Bank Nifty or Fin Nifty? Investment should always be well-planned on the basis of logics, reasoning, fundamentals, calculations and other relevant aspects. Let’s deep dive into details of Bank Nifty vs Fin Nifty to understand which one is the better option to invest your money.

Bank Nifty

The Bank Nifty is basically a sectoral index with focus only on banking stocks; it includes private and PSU banks. It is also one of the most actively traded indexes in the futures and options (F&O) segment and it is available for F&O trading on the NSE.

Bank Nifty Vs Fin Nifty: Where To Invest Your Money?

This is how Bank Nifty is calculated

  • Bank Nifty is calculated using the free float methodology where the stocks are weighted based on the free float market capitalization.
  • The Bank Nifty was launched on September 15, 2003 and it uses January 01, 2000 as the base year with a base value of 1000. This means at the Bank Nifty value of ~30,000, it indicates wealth creation to the tune of 30 times over the last 19 years.
  • The index is rebalanced semi-annually and the Bank Nifty values are available on a real time basis during trading hours.

Stock mix of the Bank Nifty Index

Being a sectoral index, the Bank Nifty only represents the banking sector; including the private banks and PSU banks. Bank Nifty represents the 12 most liquid and large capitalised stocks from the banking sector which trade on the NSE. It provides investors and market intermediaries a benchmark that captures the capital market performance of Indian banking sector.

Here is the list of companies that are included in Bank Nifty Weightage Index (Nifty Bank Index Stocks) as released by NSE India on basis of closing prices of January 31, 2021.

S No. BANK NAME Weights %
1 HDFC Bank 26.89
2 ICICI Bank 20.01
3 Axis Bank 16.59
4 Kotak Mahindra Bank 13.55
5 State Bank of India (SBI) 10.93
6 IndusInd Bank 4.85
7 Bandhan Bank 2.11
8 Federal Bank 1.46
9 IDFC First Bank Ltd. 1
10 RBL Bank 0.97
11 Bank of Baroda 0.83
12 Punjab National Bank (PNB) 0.81

Now, as per the latest development, the Bank Nifty lot size has also been revised to 25 units from 20 units.

FIN NIFTY

The Nifty Financial Services Index is designed to reflect the behaviour and performance of the Indian financial market which includes banks, financial institutions, housing finance, insurance companies and other financial services firms. The Nifty Finance Index comprises of 20 stocks that are listed on the National Stock Exchange (NSE).

This is how NIFTY Financial Services Index is computed and its utility

-NIFTY Financial Services Index is computed using free float market capitalization method, wherein the level of the index reflects the total free float market value of all the stocks in the index relative to particular base market capitalization value.

-NIFTY Financial Services Index can be used for a variety of purposes such as benchmarking fund portfolios, launching of index funds, ETFs and structured products.

FIN NIFTY’s constituents

The index has 20 constituents and weightage of each stock in the index is calculated based on its free-float market capitalization such that no single stock shall be more than 33% and weightage of top 3 stocks cumulatively shall not be more than 62% at the time of rebalancing.

Index Constituents

S No. SECURITY NAME Weights %
1 HDFC BANK LTD. 27.13
2 HDFC LTD. 17.51
3 ICICI BANK LTD. 14.14
4 KOTAK MAHINDRA BANK LTD. 12.1
5 AXIS BANK LTD. 6.46
6 BAJAJ FINANCE LTD. 5.64
7 STATE BANK OF INDIA 4.06
8 HDFC LIFE 2.21
9 BAJAJ FINSERV LTD. 2.29
10 SBI LIFE INSURANCE. 1.43
11 ICICIGI 1.37
12 ICICI PRULIFE. 0.74
13 PEL LTD. 0.68
14 BAJAJ HOLDINGS. 0.66
15 HDFC AMC LTD. 0.59
16 SRT FINANCE LTD. 0.87
17 PFC LTD. 0.54
18 CHOLA INVESTMENT. 0.66
19 REC LTD. 0.49
20 M&M FINANCIAL LTD. 0.44
Lot size is 40

Bank Nifty vs Fin Nifty: Conclusion

  • The Nifty Financial Services index has a 94% correlation and a beta value of 1.2 with the Nifty 50 Index. It has a correlation of 98% with the Nifty Bank index.
  • The Nifty Financial Services index has delivered annualized returns of 14.99% in the last 5 years. 10 out of 20 stocks in Nifty Financial Services index are constituent stocks of Nifty 50 index. They account for 92.97% weightage in Nifty Financial Services index and 38.41% weightage in Nifty 50 Index.
  • 5 out of 20 stocks in Nifty Financial Services index are constituent stocks of Nifty Bank index. They account for 63.89% weightage in Nifty Financial Services index and 87.48% weightage in Nifty Bank Index.
  • Larger sector amongst listed companies; accounts for 33.5% of the Nifty 500 Index
  • 35% of Foreign Portfolio Investments (FPIs) assets under managements are invested in the financial services sector
  • 48% of FPIs net inflows in recent period is invested in the financial services sector
  • Last few years have seen big IPOs in the financial services sector and few big companies are in process of getting listed on the exchanges-
  • Most Asset Management Companies (AMCs) have schemes themed on the financial services sector
  • As it is complete package of Indian financial sector not only banks even other products as well and there is more scope in other financial sectors, so it is recommended to invest in FIN NIFTY.

Authored by – Ravi Singhal, Vice Chairman, GCL Securities Limited



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How To Make SIP & Avail Same Day NAV In NPS Account?

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oi-Vipul Das

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Since NPS funds are allocated in assets such as equity, bonds, and debt instruments, their Net Asset Value (NAV) varies regularly based on the market valuation of the respective assets. This helps you to optimise your returns by making investments at a low NAV or by contributing on a regular basis. Most citizens open a Tier-1 National Pension System (NPS) account willingly only to get a tax gain of up to Rs 50,000 in a financial year above and above the Rs 1.5 lakh 80C cap. PFRDA, the pension fund authority, had announced in 2020 that the D-Remit facility for NPS subscribers will be available, allowing them to transfer funds directly from their bank accounts to their NPS account. This revolutionary NPS feature not only makes investing in NPS faster and more convenient, but it also allows subscribers to get same-day NAV for their investment. In fact, NPS subscribers can contribute on a regular basis (daily/monthly/quarterly) directly from their bank account using the recurring option of their banking platform, much like a mutual fund systematic investment plan or SIP.

How To Make SIP & Avail Same Day NAV In NPS Account?

What is a D-Remit Deposit Facility?

D-Remit is a digital system that allows you to transfer funds directly from your bank account to the Trustee Bank and get same-day Net Asset Value (NAV) for your NPS contribution. A Subscriber must have a Virtual ID (or Virtual Account) with the Trustee Bank to use the D-Remit feature under NPS. If contributions are made at Trustee Bank by 9:30 a.m. on any business day except Saturday, Sunday, and public holidays, the D-Remit system will enhance the contribution since you will get the same-day NAV. After 9.30 a.m., contributions received will be deposited the next working day. By logging into their respective CRA scheme and generating a Virtual ID linked to their Permanent Retirement Account Number (PRAN), existing NPS subscribers under the Government, Non-Government, and All Citizens model can take advantage of the D-Remit facility at no additional cost. When the D-Remit system was first launched, the cut-off time for same-day NAV was 8:30 a.m. That being said, as of November 12th, 2020, the cut-off time has been updated to 9:30 a.m. Subscribers can use D-Remit to configure a Systematic Investment Plan, or SIP, in NPS using the Auto Debit facility. Furthermore, the Virtual Account generated for D-Remit will not only enable you to obtain same-day NAV, but will also enable you to set up daily/monthly/quarterly Systemic Investments in the Virtual Account through Auto Debit / Standing Instructions in net banking.

How to use D-Remit Facility?

  • NPS investors can use this D-Remit service to transfer funds directly from their bank accounts to their NPS accounts and enjoy same-day NAV. The D-Remit option requires a minimum contribution of Rs. 500.
  • NPS subscribers must have a Virtual ID in order to use D-Remit (Virtual Account). They must log in to the National Pension System’s Central Recordkeeping Agency (CRA) portal. NPS subscribers do not have to pay additional cost to use the D-Remit facility by generating a Virtual ID.
  • On the mobile number registered with PRAN, the subscriber will receive an OTP for authentication purposes.
  • The creation of the Virtual ID is a one-time task, and this ID is linked to PRAN for D-Remit purposes.
  • For both NPS Tier 1 and Tier-2 accounts, the virtual Ids are different.

Steps to contribute to your NPS account using virtual ID

  • The R-Remit option is available to NPS subscribers who have access to their bank’s net banking facility.
  • To transfer funds or set up auto debit from their bank accounts, the subscriber must add the virtual ID as a beneficiary with the unique IFSC code of the trustee bank after signing in to net banking the account.
  • According to PRDRA, fund transfers made by D-Remit must have the term “NPS Contribution for D-Remit.”
  • The Trustee bank will accept funds received on T day up to 9:30 a.m. on every bank operating day (other than Saturdays, Sundays, and holidays) as same day contribution.
  • PFRDA stated in a circular that D-Remit allows a subscriber to set up Systematic Investment by auto debit/standing instructions in net banking, which allows for periodical and regular contributions such as daily, monthly, quarterly, and so on.

How to create a virtual ID to use the D-Remit facility?

To use the D-Remit facility to transfer funds, you must first generate a Virtual ID that is linked to your PRAN. Here are the steps to get a CRA Virtual ID:

  • Visit https://cra-nsdl.com/CRAOnline/VirtualIdCreation.html and now enter your PRAN and Date of Birth.
  • Now select the ‘Request OTP through’ option i.e. SMS or Email and enter the Captcha code.
  • Now click on ‘Verify PRAN’ and during PRAN authentication, you must enter an OTP that you have received on your registered mobile number via SMS or on registered Email ID.
  • The next step in the ‘Consent’ page is to pick ‘Virtual Account Registration Type’ from a list of three options: Tier-1, Tier-2, or Both. Choose the Tier-1 type option if you want to generate a virtual ID for your NPS Tier-1 account. You will receive two different virtual IDs for Tier-1 and Tier-2 accounts if you choose the ‘Both’ option.
  • Confirm the consent agreement button after selecting the ‘Virtual Account Registration Type’ and then click on ‘Generate Virtual Account’.
  • You will be issued an acknowledgment number once you have submitted your submission.
  • You will receive your virtual account ID in your mail or via SMS once your request has been accepted by CRA.

Steps to add Virtual Account (Virtual ID) as a beneficiary

  • The subscriber must log in to his bank’s net banking account and pick the Virtual Account (as created above) as the Beneficiary Account, as well as his or her name (as per CRA records) as the Beneficiary Name.
  • For funds transfer, the subscriber must enter the IFSC code of (Trustee Bank) and select the account type as ‘Current Account’, if necessary.
  • After entering beneficiary details, the Subscriber can invest in NPS (minimum of Rs. 500) whenever it is convenient for him/her and benefit from the same-day NAV. The cut-off time for funds transfer to get same-day NAV is 9.30 a.m. If funds are received after 9:30 a.m., the next working day’s NAV will apply.
  • Subject to the bank’s regulations, a subscriber can also set up standing instructions for his or her NPS Account.
  • As the mode of remittance, the subscriber can also use RTGS/NEFT facility. For this transaction, the Trustee Bank does not accept IMPS transactions at the
  • You can remit funds for NPS investment upon adding Virtual Account as a beneficiary.

Hints for addition of virtual account as beneficiary:

Beneficiary Name: Name as per PRAN Card

Beneficiary Account Number: Virtual Account Number received through SMS/Email

Beneficiary Account Type: Current

Beneficiary Bank: Axis Bank

IFSC: UTIB0CCH274 (where ‘0’ indicates ‘zero’)

Note: It is required to add a different Virtual Account Number as beneficiary for each Tier of NPS account.



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WhatsApp Pay: Why Facebook-owned messaging service hasn’t exploded yet in its biggest market India

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The gap between the top three UPI apps and WhatsApp Pay is quite epic.

It took a good over a two-and-a-half-year period for Facebook-owned WhatsApp to roll out its much talked about payments service in November 2020 from around February 2018 when the messaging giant had started testing the feature. In October 2020, a month before the rollout, WhatsApp Payments or WhatsApp Pay had processed 70,000 UPI transactions amount to Rs 9.32 crore. In its first month (November) of approval from the National Payments Corporation of India, which operates the UPI payments infrastructure, the figures jumped to an impressive 3.1 lakh transactions worth Rs 13.87 crore. However, the growth, in transactions primarily, since its launch till February 2021 arguably hasn’t picked the kind of pace one would have expected from WhatsApp that counts over 500 million users in its biggest market India. As per NPCI data, WhatsApp managed to scale to 5.5 lakh UPI transactions worth Rs 32.41 crore in February.

“The reason is very clear. It is the lack of use cases. Right now, WhatsApp is offering peer-to-peer (P2P) payments. There is no geography where just on the back of P2P payments, digital payments have proliferated. They don’t have those P2M transactions or use cases defined really well,” Arnav Gupta, an analyst at Forrester Research told Financial Express Online.

WhatsApp didn’t reply to an email seeking comments for this story.

The Roadblock

While the company has been studying the digital payments market for at least three years, the business side of the platform has been a roadblock for the company as WhatsApp hasn’t been able to further evolve it and connect it back to payments proposition. For example, Gupta said that WhatsApp is only a unilateral channel of communication for enterprises to speak to their customers. For instance, a travel portal can send a customer’s travel tickets and invoice on WhatsApp but he/she cannot talk back to the company while there are very few and limited use cases where there are chatbots set-up. According to Gupta, that is the struggle WhatsApp is going through.

Also read: Government mandates companies to disclose crypto investments, profit or loss made; startups hail move

WhatsApp’s viral growth and the kicking off of its networking-effects in the early days was certainly the stuff of legend. However, that has not translated yet in its payments business that has been approached in fits and starts. “WhatsApp’s desire to keep its interface consistent across geographies meant it was unable to create a dedicated payments interface within the app for India despite the exploding UPI market. This means it lags in a market it could have clearly dominated. Even when we look at the data in the past three months, its transactions have fallen in January 2021 from a December 2020 high,” Utkarsh Sinha, Managing Director, Bexley Advisors, a boutique investment bank firm, told Financial Express Online.

Importantly, WhatsApp Pay rollout had coincided with the NPCI announcement in November that third-party applications offering UPI payments service can process a maximum of 30 per cent of the transaction volumes starting January 1, 2021. The decision, according to an NPCI statement, was taken to “address the risks and protect the UPI ecosystem as it further scales up.” Moreover, NPCI had allowed WhatsApp to launch payments service in a graded manner to a maximum of 20 million registered users in UPI.

“Limiting the number of digital payments that could be made via payment apps adversely affected all other wallets, including WhatsApp,” Prabir Chetia, Head – Business Research & Advisory, Aranca told Financial Express Online. Moreover, the entire payment section had a step-by-step launch with no marketing push. “There was no big bang marketing campaign to announce its entry into the payment space. Hence, the awareness regarding this new offering of WhatsApp is very low. Consumers who are tech-savvy and active users of the app may know about it and even use it, but many others still view it as a communication tool,” added Chetia.

Missing the Bus

The thought perhaps at WhatsApp back in 2017 was about leveraging the customer loyalty for its messaging environment to plug-in the payments service. This would have meant for customers to remain within WhatsApp instead of exiting it and using Paytm, PhonePe, Google Pay, others for transacting online. However, a nearly three-year long period from testing the service to its eventual launch has perhaps impacted its growth. “Had they been able to launch then (in 2018), they would have evolved like others. They have missed the bus by over two years. Having said that, their partnership with Jio could be a potentially viable business model and can create some buzz. But JioMart is not available on WhatsApp in all the cities currently,” said Gupta.

In April 2020, Facebook had picked up a 9.99 per cent stake in Jio Platforms at $5.7 billion. The deal had supporting India’s vast small business base digitally as its key focus. Moreover, Mark Zuckerberg at a company event in December 2020 with Mukesh Ambani had revealed that WhatsApp has 15 million business app users from India. “Jio brings digital connectivity, WhatsApp now with WhatsApp Pay brings digital interactivity, and the ability to move to close transactions and create value, and Jio Mart brings the unmatched online and offline retail opportunity, that gives our small shops which exist in villages and small towns in India, a chance to digitise and be at par with anybody else in the world,” Ambani on his part had said. Jio and WhatsApp have more than 400 million customer base in India.

“WhatsApp has been ironing out its strategy for the space since 2017. But that has led it to concede valuable space to the current incumbents. If WhatsApp was aggressive in payments to start with, a lot of the current competition would have struggled to gain a foothold,” said Sinha.

The Epic Gap

Current UPI payments incumbent PhonePe had cornered an impressive 42.5 per cent share of the 2,292.90 million UPI transactions in February, as per NPCI data. Walmart’s payment arm in India – PhonePe had processed 975.53 million UPI transactions amounting to Rs 1.89 lakh crore. Likewise, Google Pay, which lost the top spot to PhonePe in December 2020, was the second-largest UPI app in February processing 827.86 million transactions (36 per cent of total UPI volume) worth Rs 1.74 lakh crore. On the other hand, Paytm was still the distant third player in February recording 340.71 million transactions involving Rs 38,493.52 crore. It had processed 332.69 million transactions worth Rs 37,845.76 crore in the preceding month.

Also read: VC firm Sequoia Capital closes second seed fund at $195 million to back startups in India, Southeast Asia

The gap between the top three UPI apps and WhatsApp Pay is quite epic. “WhatsApp has a huge user base. However, these users are using it as a communication tool. Will they become loyal to its payment solution? I think it is unlikely,” said Chetia. Despite a large user base, those living in Tier-III cities and beyond are less likely to use WhatsApp for payments. That’s also because, unlike its large competitors, WhatsApp doesn’t offer cashback and other add-on services as incentives. “Even if they build out certain use cases, still daily active users on other platforms are far too much. So, I don’t think WhatsApp would be in a leadership position,” said Gupta. However, it might be too early to call any winners in the UPI space. WhatsApp still owns the Bharat behind India, and their entry is a significant tectonic shift that might unlock a lot of disruptive value in the long term. It is precisely because of their scale that this value potential exists.

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3 Special FD Schemes For Senior Citizens That Will End On March 31

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HDFC Special FD Scheme

HDFC Senior Citizen Care is a special FD scheme offered by HDFC Bank for senior citizens. On these deposits, the bank gives a 75 basis point higher interest rate. The interest rate on a fixed deposit made by a senior citizen under the HDFC Bank Senior Citizen Care FD will be 6.25 per cent. These rates are effective as of November 13th.

HDFC Bank FD Rates For Senior Citizens

Below listed fixed deposit rates are for senior citizens for an amount below Rs 2 Cr.

Tenure Senior Citizen Rates
7 – 14 days 3.00%
15 – 29 days 3.00%
30 – 45 days 3.50%
46 – 60 days 3.50%
61 – 90 days 3.50%
91 days – 6 months 4.00%
6 months 1 days – 9 months 4.90%
9 months 1 day < 1 Year 4.90%
1 Year 5.40%
1 year 1 day – 2 years 5.40%
2 years 1 day – 3 years 5.65%
3 year 1 day- 5 years 5.80%
5 years 1 day – 10 years 6.25%
Source: Bank Website

ICICI Special FD Scheme

ICICI Special FD Scheme

ICICI Bank Golden Years is a special FD scheme for senior citizens offered by ICICI Bank. On these deposits, the bank gives an 80 basis point higher interest rate. The ICICI Bank Golden Years FD scheme provides a 6.30 per cent annual interest rate to senior citizens. These rates are effective from 21 October 2020.

ICICI Bank Fixed Deposit Rates For Senior Citizens

Below listed fixed deposit rates are for senior citizens for an amount below Rs 2 Cr.

Tenure Senior Citizen Rates
7 days to 14 days 3.00%
15 days to 29 days 3.00%
30 days to 45 days 3.50%
46 days to 60 days 3.50%
61 days to 90 days 3.50%
91 days to 120 days 4.00%
121 days to 184 days 4.00%
185 days to 210 days 4.90%
211 days to 270 days 4.90%
271 days to 289 days 4.90%
290 days to less than 1 year 4.90%
1 year to 389 days 5.40%
390 days to < 18 months 5.40%
18 months days to 2 years 5.50%
2 years 1 day to 3 years 5.65%
3 years 1 day to 5 years 5.85%
5 years 1 day to 10 years 6.30%
5 Years (80C FD) 5.85%
Source: Bank Website

Bank of Baroda Special FD Scheme

Bank of Baroda Special FD Scheme

Senior citizens can get a 100 basis point higher rate on these deposits of Bank of Baroda. On fixed deposit under the special FD scheme (for a period of more than 5 years and up to 10 years), the interest rate will be 6.25 per cent. These rates are in effect from 16 November 2020.

Bank of Baroda Fixed Deposit Rates For Senior Citizens

Below listed fixed deposit rates are for senior citizens for an amount below Rs 2 Cr.

Tenure Senior Citizen Rates
7 days to 14 days 3.30%
15 days to 45 days 3.30%
46 days to 90 days 4.20%
91 days to 180 days 4.20%
181 days to 270 days 4.80%
271 days & above and less than 1 year 4.90%
1 year 5.40%
Above 1 year to 400 days 5.50%
Above 400 days and up to 2 Years 5.50%
Above 2 Years and up to 3 Years 5.60%
Above 3 Years and up to 5 Years 5.75%
Above 5 Years and up to 10 Years 6.25%
Above 10 years (for MACT/MACAD – Court Order schemes only) 5.10%
Source: Bank Website

Note

Note

The Reserve Bank of India’s Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary, insures all bank deposits, including savings, fixed, current, and recurring deposits, up to a limit of Rs 5 lakh. This means that if the bank goes bankrupt, both senior and non-senior citizens will get an insurance cover up to Rs 5 lakh including principal and interest against their deposits. DICGC insures depositors of all commercial banks and overseas banks, state, central, and urban co-operative banks, and regional rural banks that have acquired DICGC insurance policy.



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Niyo Partners With Equitas SFB To Offer 7% Interest on NiyoX Savings Account

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Planning

oi-Sneha Kulkarni

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No bank currently pays a rate of interest on savings bank deposits of more than 7%, and many banks pay less than 7% even on fixed deposits. NiyoX has unveiled a new type of zero-balance savings bank account with a whopping 7% interest rate.

NiyoX is a joint venture between Niyo and Equitas Small Finance Bank. Niyo, India’s leading fintech company, has teamed up with Equitas Small Finance to launch a mobile banking option called NiyoX. You can use this digital account in two ways. One can also use it as your online savings account. Second, you can use it as your Wealth Management Account.

Niyo Partners With Equitas SFB To Offer 7% Interest on NiyoX Savings Account

NiyoX is seeking to help thousands of youngsters to manage their savings and wealth in partnership with Equitas. The wealth management suite is supported by Niyo Money and is a single-stop shop that offers zero commissions, supports users in tracking investments, and rounds up costs.

Most Indian banks impose penalties and fines if a customer fails to maintain a minimum balance, which varies from Rs 100 to Rs 5000 depending on the bank. This bank is providing zero account maintenance fees, which can be extremely beneficial during the on-going pandemic.

You can invest your money directly in mutual funds for free, and you won’t be charged if your online savings account doesn’t have a minimum balance. On deposits made through this savings account, you will earn 7% interest.

If you aren’t using your card or have misplaced it, you can ‘Lock’ it temporarily and then ‘Unlock’ it when you’re ready to use it again.

This new age bank is protected by the Deposit Insurance and Credit Guarantee Corporation (DICGC), ensuring that your money is safe with a Rs 5 lakh insurance cover.

How can you maximize your earnings?

Assume your bank pays you a staggering 7% interest rate on any amount over 1 lakh in your savings account, and for less than 1 lakh, you’ll get a 3.5% interest rate.

As a result, a 3.5% interest rate is given on the entire balance for a balance of Rs 1 lakh, and a 7% interest rate is applied to the remaining balance.

If your account has Rs 1,35,000, you will attract an interest of 3.5% for Rs 1 lakh, and the remaining Rs 35,000 will attract a 7% interest rate.

On a daily basis, interest is calculated on the EoD balance: (EoD Balance) * (Interest rate of 3.5% or 7%) * (Days in quarter/365).

It’s really easy to sign up for a NiyoX account. All you have to do is download the NiyoX app from the iOS Appstore or the Google Playstore. After you’ve downloaded the app, you can immediately begin the onboarding process.



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How To Open A Post Office Time Deposit Account Online?

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Investment

oi-Vipul Das

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A government-backed Post Office Fixed Deposit, also known as the ‘Post Office Time Deposit Account,’ is similar to a fixed deposit account of a bank that allows you to earn guaranteed returns over a fixed maturity period. A deposit with a 5-year lock-in clause is also a tax-saving benefit. By investing in a ‘Post Office Time Deposit’ account you can deduct up to Rs. 1.5 lakh in a financial year under Section 80 C of the Income Tax Act, 1961. For risk-averse investors, holding their money in a post office fixed deposit is the best option. Since the scheme is backed by the Government of India, the money invested in the POTD is absolutely safe and secure, and thus generates assured returns. Let’s check out the benefits of Post Office Time Deposit and the procedure to open an account both online and offline.

How To Open A Post Office Time Deposit Account Online?

Key benefits of post office time deposit account

Below are the benefits of a Post Office Fixed Deposit account which you need to know before opening an account.

  • The Post Office Time Deposit account comes with a tenure ranging from 1 to 5 years.
  • A POTD account can be opened by making an initial deposit of Rs 1,000 and in multiples of 100, with no upper limit.
  • Deposits made over a period of five years are eligible for tax deductions of up to Rs. 1.5 lakh per fiscal year under section 80C.
  • The account can be opened individually or jointly for up to 3 members.
  • Rate of interest payable annually but calculated quarterly.
  • One can transfer his or her POTD account from one post office to another or from one person to another.
  • On maturity, the depositor has the option to extend the TD account for another period than that for which it was initially opened. Under the specified time, TD accounts will be extended from the date of maturity, i.e. 1 year TD (within 6 months of maturity), 2 year TD (within 12 months of maturity) and 3 to 5 years (within 18 months of maturity).
  • By filing an application, the annual interest will be credited to the account holder’s savings account.
  • A minor with 10 years of age or above can also open a post office fixed deposit on behalf of his or her name.

Post Office Time Deposit Rates

The Government of India adjusts interest rates of post office small savings schemes on a quarterly basis. For the quarter ending on March 31, 2021 the interest rates of post office time deposit scheme are as follows:

Tenure ROI
1 year 5.50%
2 years 5.50%
3 years 5.50%
5 years 6.70%

Tax benefits on post office fixed deposit

Unlike bank fixed deposits, no tax TDS (Tax Deducted at Source) is deducted on the interest received in the post office fixed deposit account. One can specify the Post Office Time Deposit investments in his or her ITR to seek a deduction under Section 80C of the Income Tax Act, 1961. Every financial year, the upper limit for deductions under this provision of the IT Act, 1961 is capped at Rs. 1.5 lakh.

Premature closure of the account

Here are some key points to remember when withdrawing a Post Office fixed deposit early:

  • No deposit can be made until the six-month period has passed after the date of deposit.
  • PO Savings Account Interest Rate will apply if TD account is closed after 6 months but before 1 year.
  • If a 2,3,5 year TD account is prematurely closed after 1 year, interest will be determined at 2% less than the TD interest rate (i.e. 1,2 and 3 years) for completed years, and PO Savings Interest rates will apply for part periods less than a year.
  • Premature closure of a TD account is possible by submitting a prescribed application form along with a passbook to the relevant Post Office.

Eligibility required to open a post office fixed deposit account

An individual must be any of the following to open a time deposit account:

  • An individual can open a single account on behalf of his or her name.
  • An individual can open a joint account with up to 3 adults only.
  • A guardian on behalf of a minor or a guardian on behalf of a person of unsound mind
  • A minor with a minimum age limit of 10 years or above.

Documents required to open a post office time deposit account

The following documents must be submitted to open a fixed deposit account at a post office:

  • Identity proof: Aadhaar Card, PAN Card, Voter ID Card
  • Address proof: Aadhaar Card, Ration Card, Driving License, Utility bills, PAN Card
  • Income proof: Bank account statement of the last 6 months, salary slip of the last 3 months
  • Duly filled application form attached with passport size photographs.

Steps to open a post office time deposit account online

Customers can open a fixed deposit or time deposit account in any post office in India, both offline or online. But before opening an account online some prerequisites must be met such as an active mobile number and email ID, a savings bank account, valid KYC documents, and PAN Card.

  • Visit https://ebanking.indiapost.gov.in and sign in to your account using the required credentials i.e. User ID and Password.
  • Now under the ‘General Services’ section, click on the ‘Service Request’ option.
  • Now click on ‘New Request’ to make a request for opening a TD account.
  • Now fill the application form with all the required details correctly.
  • Make the initial contribution and click on ‘Submit’
  • Upon successful submission, you will get a confirmation alert on your registered email ID.

Offline method

  • Fill up the required application form with all required details. You can get the Post Office Time Deposit application form by clicking here.
  • Along with the application form, attach all the required KYC documents and passport size photographs.
  • Make a visit to the post office where you have maintained a savings account and submit the application form by making the initial contribution of Rs 1,000.

How to make contributions towards a POTD account online?

  • Download the ‘India Post Mobile Banking app’ on your mobile and sign in to the app using the required credentials.
  • Now to open a post office fixed deposit account tap on the ‘Requests’ tab.
  • To open the account, fill in the required details, such as the deposit amount, tenure, the account from which you want to debit the deposit amount and so on.
  • To make a deposit to your TD account, go to the ‘Transfers’ section and follow the further steps.



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Best Performing Equity Mutual Funds That Gave Over 100% Return In The Last 1-Year

Personal Finance

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Investment

oi-Roshni Agarwal

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Amid booming Indian stock market which prompted by the government stimulus measures, foreign fund flows, US Presidential elections, vaccine progress continued to scale new highs, there has been seen substantial gains in so

These Equity Mutual Funds Gave Over 100% Return In The Last 1-Year

Amid booming Indian stock market which prompted by the government stimulus measures, foreign fund flows, US Presidential elections, vaccine progress continued to scale new highs, there has been seen substantial gains in some of the equity mutual funds of over 100%.

Best Performing Equity Mutual Funds That Gave Over 100% Return In The Last 1Year

In a leading business magazine report, Palka Chopra, Senior Vice President, Master Capital Services is cited as saying, “Markets were largely driven by the liquidity infused by the government in ways like announcing stimulus packages to increasing purchasing power of a common man. Even central bank participated by infusing huge money flow in the system by cutting down the bank rates multiple times within a very short span in expectation to wake up the credit demand”.

Further in the unprecedented year, what hogged the limelight were the digital or technology space and small caps. The increasing demand for technology and digital services such as cloud computing amid various curbs when people were forced to sit back and work from home provided a lift to tech stocks.

Here are the best performing equity mutual funds in the last 1-year timeframe:

Mutual funds Annualised Return Category
Quant Small cap fund 192.00% Small cap fund
ICICI Prudential Technology Fund 149.00% Sectoral/Thematic
ICICI Prudential Commodities Fund 160.00% Sectoral/Thematic
Quant Tax Plan Fund 149.00% ELSS
Quant Infrastructure Fund 155.00% Sectoral/Thematic
Aditya Birla Sun Life Digital India Fund 135.00% Sectoral/Thematic
Quant Active Fund 142.00% Multicap fund
Tata Digital India Fund 119.00% Sectoral/Thematic
Quant Consumption Fund 136.00% Sectoral/Thematic
Kotak Small Cap fund 135.00% Small cap fund
DSP World Mining Fund 116.00% Fund of funds
Franklin India Technology Fund 122.00% Sectoral/Thematic
PGIM India Midcap Opportunities fund 130.00% Midcap fund
Edelweiss US Technology Equity FoF 118.00% Fund of funds-equity
Kotak Pioneer fund 117.00% Sectoral/Thematic
Nippon India Small Cap Fund 132.00% Small cap fund
Principal Global Opportunities Fund 101.00% Fund of funds
Edelweiss Small Cap fund 122.00% Small cap
Motilal Oswal Nifty Smallcap 250 Index fund 127.00% Index funds or ETFs

Note: The annualized 1-year return for the different funds have been taken from Moneycontrol website.

GoodReturns.in



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3 Special FD Schemes For Senior Citizens That Will End On March 31 March

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HDFC Special FD Scheme

HDFC Senior Citizen Care is a special FD scheme offered by HDFC Bank for senior citizens. On these deposits, the bank gives a 75 basis point higher interest rate. The interest rate on a fixed deposit made by a senior citizen under the HDFC Bank Senior Citizen Care FD will be 6.25 per cent. These rates are effective as of November 13th.

HDFC Bank FD Rates For Senior Citizens

Below listed fixed deposit rates are for senior citizens for an amount below Rs 2 Cr.

Tenure Senior Citizen Rates
7 – 14 days 3.00%
15 – 29 days 3.00%
30 – 45 days 3.50%
46 – 60 days 3.50%
61 – 90 days 3.50%
91 days – 6 months 4.00%
6 months 1 days – 9 months 4.90%
9 months 1 day < 1 Year 4.90%
1 Year 5.40%
1 year 1 day – 2 years 5.40%
2 years 1 day – 3 years 5.65%
3 year 1 day- 5 years 5.80%
5 years 1 day – 10 years 6.25%
Source: Bank Website

ICICI Special FD Scheme

ICICI Special FD Scheme

ICICI Bank Golden Years is a special FD scheme for senior citizens offered by ICICI Bank. On these deposits, the bank gives an 80 basis point higher interest rate. The ICICI Bank Golden Years FD scheme provides a 6.30 per cent annual interest rate to senior citizens. These rates are effective from 21 October 2020.

ICICI Bank Fixed Deposit Rates For Senior Citizens

Below listed fixed deposit rates are for senior citizens for an amount below Rs 2 Cr.

Tenure Senior Citizen Rates
7 days to 14 days 3.00%
15 days to 29 days 3.00%
30 days to 45 days 3.50%
46 days to 60 days 3.50%
61 days to 90 days 3.50%
91 days to 120 days 4.00%
121 days to 184 days 4.00%
185 days to 210 days 4.90%
211 days to 270 days 4.90%
271 days to 289 days 4.90%
290 days to less than 1 year 4.90%
1 year to 389 days 5.40%
390 days to < 18 months 5.40%
18 months days to 2 years 5.50%
2 years 1 day to 3 years 5.65%
3 years 1 day to 5 years 5.85%
5 years 1 day to 10 years 6.30%
5 Years (80C FD) 5.85%
Source: Bank Website

Bank of Baroda Special FD Scheme

Bank of Baroda Special FD Scheme

Senior citizens can get a 100 basis point higher rate on these deposits of Bank of Baroda. On fixed deposit under the special FD scheme (for a period of more than 5 years and up to 10 years), the interest rate will be 6.25 per cent. These rates are in effect from 16 November 2020.

Bank of Baroda Fixed Deposit Rates For Senior Citizens

Below listed fixed deposit rates are for senior citizens for an amount below Rs 2 Cr.

Tenure Senior Citizen Rates
7 days to 14 days 3.30%
15 days to 45 days 3.30%
46 days to 90 days 4.20%
91 days to 180 days 4.20%
181 days to 270 days 4.80%
271 days & above and less than 1 year 4.90%
1 year 5.40%
Above 1 year to 400 days 5.50%
Above 400 days and up to 2 Years 5.50%
Above 2 Years and up to 3 Years 5.60%
Above 3 Years and up to 5 Years 5.75%
Above 5 Years and up to 10 Years 6.25%
Above 10 years (for MACT/MACAD – Court Order schemes only) 5.10%
Source: Bank Website

Note

Note

The Reserve Bank of India’s Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary, insures all bank deposits, including savings, fixed, current, and recurring deposits, up to a limit of Rs 5 lakh. This means that if the bank goes bankrupt, both senior and non-senior citizens will get an insurance cover up to Rs 5 lakh including principal and interest against their deposits. DICGC insures depositors of all commercial banks and overseas banks, state, central, and urban co-operative banks, and regional rural banks that have acquired DICGC insurance policy.



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SBI Customers Can Now Get Free Insurance Cover Up To Rs 2 Lakh: Here’s How

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Insurance

oi-Vipul Das

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Customers with State Bank of India debit cards can now get accidental insurance coverage by applying for an SBI Rupay Platinum card which is no doubt a significant benefit for the cardholders. With the SBI Rupay Platinum card, SBI customers can take advantage of exclusive benefits such as Accidental Insurance Cover up to Rs 2 lakh, earn SBI Rewardz points by shopping and so on. To be eligible for accidental insurance, SBI customers must make one minimum financial transaction at any PoS/e-commerce within 45 days of the date of the accident. The State Bank of India accidental insurance cover benefit will be available to SBI Rupay Platinum debit cardholders without the need to pay a premium. The SBI Rupay Platinum card is an international debit card that comes with issuance fees of Rs 300 plus GST and annual maintenance fees of Rs 250 plus GST. To know more about the card, check out the details listed below:

SBI Customers Can Now Get Free Insurance Cover Up To Rs 2 Lakh: Here’s How

Key benefits of SBI Rupay Platinum Debit Card

  • With the SBI Rupay Platinum debit card, you can shop at over 52 lakh merchant outlets in India and over 30 million overseas.
  • SBI Rupay Platinum debit card can be used to buy movie tickets, pay bills, travel, and make online purchases.
  • Using an SBI Rupay Platinum debit card, you can withdraw funds from ATMs in India and overseas.
  • You can use the SBI Rupay Platinum debit card to get free access to an airport lounge.
  • For every Rs 200 spent on shopping, dining out, fuel, booking a flight, or spending online with your SBI Rupay Platinum debit card, you will receive 2 SBI Rewardz points. Customers who use their SBI Rupay Platinum debit card to make their first three purchases will receive 200 bonus points.
  • The SBI Rupay Platinum debit card also provides a reward bonus for occasions like birthday.
  • The issuance fee for the SBI Rupay Platinum debit card is Rs 300 plus GST, and the annual maintenance fee is Rs 250 plus GST.
  • Customers who hold a quarterly balance of Rs. 50,000 are eligible for a free card.
  • You will get a 5% cashback for paying utility bills using RuPay Platinum Card
  • You will get reward points for every transaction that can be redeemed for discount vouchers.
  • The reward point value is 1 point = 1 rupee
  • The charges applicable for replacing a card is Rs. 300 plus GST for each card.

Transaction and daily cash withdrawal limit

With SBI Platinum International Debit Cards, you can indulge the luxury of cashless shopping while also earning SBI Rewardz points on your transactions. You can access your account anytime and anywhere you want with your SBI Platinum International Debit Card. You can use it to make purchases at merchant outlets, make online payments, and withdrawal in India and around the world. Please see the table below for details on the daily cash withdrawal and transaction limit of the card:

SBI Gold International Debit Card Domestic International
Daily Cash Limit at ATMs Minimum Rs. 100/- Varies from ATM to ATM
Maximum Rs. 1,00,000/- Varies from country to country, subject to a maximum of foreign currency equivalent of Rs. 1,00,000/-
Daily Point of Sales/ Online Transaction Limit Minimum No such limit No such limit but subject to local regulation
Maximum Rs. 2,00,000/-

PoS Transaction Limit : Varies from country to country, subject to a maximum of foreign currency equivalent of Rs. 2,00,000/

Online Transaction Limit : Maximum per transaction and per month limit of foreign currency equivalent of Rs. 50,000/-, available only at select international online websites.



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