Category: Personal Finance

Two-day bitcoin plunge shakes faith in cryptocurrency boom, BFSI News, ET BFSI

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The white-knuckle Bitcoin ride took another twist Monday as a two-day tumble in the digital currency stoked concern that the polarizing cryptocurrency boom may run out of steam.

Bitcoin, the largest cryptocurrency, slid as much as 18 per cent over Sunday and Monday to as low as about $33,500. That’s the biggest two-day slide since May last year and follows a record high of almost $42,000 on Jan. 8.

“It’s to be determined whether this is the start of a larger correction, but we have now seen this parabola break so it might just be,” said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore.
Bitcoin’s price has more than quadrupled in the past year, evoking memories of the 2017 mania that first made cryptocurrencies a household name before prices collapsed just as quickly.

True believers in Bitcoin argue the difference this time is the asset has matured with the entry of institutional investors and is increasingly seen as a legitimate hedge against dollar weakness and inflation risk. Others worry that the rally is untethered from reason and fueled by vast swathes of fiscal and monetary stimulus, with Bitcoin unlikely to ever serve as a viable currency alternative.

“Bitcoin is almost certainly in another bubble and its current growth rate is not sustainable,” Howard Wang, co-founder of Convoy Investments LLC said in a Jan. 10 note. “While it may mature in the future, Bitcoin as it exists is largely a speculative asset.”

Bitcoin has shrugged off recent dips and may do so again, potentially recovering to as much as $44,000 “before the actual correction,” Luno’s Ayyar said.

The coin pared some losses Monday and as of 2:03 p.m. in Tokyo was around $35,600. Rival digital assets are also slumping, with second-largest coin Ether tumbling as much as 20 per cent.



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How Can I Make The Most Of My Savings Account?

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How Can I Make The Best Use Of A Savings Account?

Usually, the first stage in a financial path begins by starting a savings bank account. Although depositing money in a safe place is the primary objective of a savings account, it also establishes a partnership with the bank that allows the investor to manage different investment vehicles. Follow the ways to make the most of your savings account.

By making investments:

By making investments:

To set up regular transactions, a savings bank account can be used. For a certain period of time, a SIP or a bank RD/FD can be established. Using a savings account you can also open a trading and demat account to invest in mutual funds or other securities. Online banking can also be used to invest in PPF, FD using a sweep-in facility, insurance and other investment strategies.

Paying outstanding bills:

Paying outstanding bills:

The savings bank account operates as a financial planning mechanism owned by an individual. Utility bill payments of third parties, tax payments, loan EMIs, insurance premiums can be paid conveniently. For all investments linked to the bank account, an overview or financial summary of the customer is offered by several Online banking platforms.

Using as a proof of annual bank statement:

Using as a proof of annual bank statement:

Along with expenses carried out, the savings bank account can be used by an individual to his or her income earned per annum by using an annual bank statement which contains a summary of income received by various means and thus becomes a crucial document while filing your IT return.

By enhancing your relationship with the bank:

By enhancing your relationship with the bank:

Based on the size of the account, the banking relationship can be useful to allow use of other privileges provided by the bank. Some of them are credit cards, pre-approved loans, overdraft services, discounts on certain transactions, exemption from service fees and so on.

Taxation

Taxation

Under section 80TTA of the Income Tax Act, interest of up to Rs. 10,000 received in a fiscal year is exempted from taxable income from post office savings accounts. If the person is a senior citizen, the benefit can be claimed under section 80TTB of up to Rs 50,000. The interest earned is taxable under the term ‘Income from Other Sources’ in the instance of a regular bank savings account. A deduction of up to Rs 10,000 on interest income is given under Section 80TTA and, thus, interest received above Rs 10,000 is only taxable. In the case of a senior citizen, this deduction will go up to Rs 50,000.

Interest rates on savings account

Interest rates on savings account

There are some small and private sector banks, opposed to the largest private banks, which deliver stronger interest on savings accounts. Despite low interest rates, there are now two private banks offering more than 7 percent return on savings accounts. To know more click here.



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How To Transfer Money In Sukanya Samriddhi Account Online?

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Investment

oi-Vipul Das

|

While preferring tax-savings strategies, individuals who have a girl child choose Sukanya Samriddhi Account (SSA). The government maintained unaffected interest rates on small savings schemes, along with Sukanya Samriddhi Account, for the quarter from January to March. Every quarter, interest rates for small savings schemes are adjusted. After opening an SSY account, with the India Post Payments Bank (IPPB) app, you can manage your account online on the go.

What is the DakPay digital payments app?

The government unveiled the digital payments app ‘DakPay’ last month. The post office and IPPB members can also make use of this. The digital financial and supported banking services offered by India Post and IPPB are presented by DakPay. It also provides services such as transferring funds online, QR code scanning and electronic payment for services and merchants and The government unveiled the digital payments app ‘DakPay’ last month. The post office and IPPB members can also make use of this. The digital financial and supported banking services offered by India Post and IPPB are presented by DakPay. It also provides services such as transferring funds online, QR code scanning and electronic payment for services and merchants. It will also provide interoperable banking facilities for every bank in the country for customers and existing account holders.

How To Transfer Money In Sukanya Samriddhi Account Online?

How To Deposit Money In Post Office RD Account Online?

SSY Interest Rates

The SSY interest rate is determined by the government, and is adjusted every quarter. In the Sukanya Samriddhi Account, the minimum contribution is Rs 250 per financial year and the limit is Rs 1,5 lakh. SSA has a maturity span of 21 years from the date of the account opening. This post office small savings scheme is currently fetching an interest rate of 7.6 percent to the eligible depositors.

Steps to deposit money in SSY account online through IPPB app

  • First you need to transfer or add money from your savings bank account to IPPB account
  • Now navigate to the ‘DOP Products’ tab and tap on ‘Sukanya Samriddhi Account’
  • Enter your SSY account number and DOP customer ID on the required space
  • Now you will need to select the instalment amount and duration
  • Once you are done with the successful payment transfer you will get a notification on the app itself.
  • You can select different investment alternatives offered by India Post and make monthly instalment via the standard savings account of IPPB.



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Should I Go For FDs Considering Health Cover Benefits?

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ROI and maturity period

Standard rates are usually provided by these FDs. So, with no additional benefit, you can get the same deposit rate as given on a regular deposit. The maturity duration is, however, pre-defined. For instance, the FD of DCB Bank is only available for a tenure of 700 days whereas the minimum term for ICICI Bank’s FD is two years respectively.

Upper limit for deposit

Upper limit for deposit

Generally, there is a limit on the minimum and overall amount of investment. For comparison, the FD of DCB Bank has a minimum investment amount of Rs10,000, whereas the FD of ICICI Bank has a minimum and maximum investment cap of Rs 2 lakh and Rs 3 lakh.

Limited Health Insurance Benefits

Limited Health Insurance Benefits

The insurance offered in compliance with these policies is minimal. In the context of ICICI Bank’s FD, for instance, the critical illness insurance is for Rs 1 lakh only but there are age restrictions as well. For instance, to deposit in ICICI Bank’s FD, the investor should not reach 50 years of age; the cap for DCB Bank’s FD is 70 years respectively.

Does It Make A Sense To Invest?

Does It Make A Sense To Invest?

With additional perks, these FDs have the same interest rates. Well, if you are depositing and satisfying all the requirements for the same tenure, you can accept them, but be alert before depositing, check the terms and conditions thoroughly. For example, one of the FD options has a two-year maturity period, but only has healthcare coverage for one year. Another type of FD has a number of advantages that differ based on the amount deposited. The standards for the minimum and maximum age often differ across FD schemes. Even, don’t focus on your health care policy for it.

In most instances, the cover may not be worthy for you and the health insurance benefits can apply only to the primary depositor. As well, the health cover will be lost if you want to break or exit from the FD scheme. As well, if you need to split the FD, the health cover will be lost. Most significantly, you will no longer be entitled to use the policy on the next extension if the bank’s liaison with the insurer breaks. We also suggest that all factors must be analysed before participating in these FDs.

GoodReturns.in



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Here is the latest FD Interest rates of banks, BFSI News, ET BFSI

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Fixed deposits (FDs) are financial instruments provided by banks or NBFCs that offer investors better interest rates than the regular savings accounts. FDs are considered one of the safest investment options and are also called term deposits as they are booked for a fixed term that may range from 7 days to up to 10 years.

Latest rates being offered by some of the top Financial Institutions:

Banks FD Interest Rates

HDFC Bank 2.5% to 5.5%
ICICI Bank 2.5 to 5.5%
Axis Bank 2.5% to 5.5%
Kotak Mahindra Bank 2.5% to 4.5%%
SBI 2.9% to 5.4%
Bank of Baroda 2.8% to 5.1%
Bajaj Finace 6.1% to 6.7%
HDFC 5.85% to 6.25%
PNB Housing Finance 5.9% to 6.7%

State Bank of India
On FDs between 7 days and 45 days, SBI gives 2.9% interest. Between 46 days and 179 days, the interest is 3.9%. FDs of 180 days to less than one year will get you an interest of 4.4%. For deposits with maturity between 1 year and up to 2 years fetch 5% interest. FDs with tenor 3 years to less than 5 years give 5.3%, while those maturing in 5 years and up to 10 years give 5.4 percent.

HDFC Bank
On FDs between 7 and 29 days, HDFC Bank gives 2.50% interest. For 30 to 90 days, it is 3.00%. For 91 days to 6 months, the interest rate will be 3.50%. For FDs of 6 months 1 days to 1 day less than a year, the interest is 4.40%. For 1 year it is 4.90%. For 1 year 1 day to 2 years, you can get an interest of 4.90%. For 2 years 1 day to 3 years, the rate is 5.15%. On FDs between 3 year 1 day and 5 years, you can enjoy an interest rate of 5.30%. And FDs maturing between 5 years 1 day and 10 years will fetch you 5.50%.

ICICI Bank
On FDs between 7 and 29 days, ICICI Bank gives 2.50% interest. From 30 to 90 days, it is 3.00%. From 91 days to 184 days, the interest rate will be 3.50%. For FDs of 185 to 290 days to less than 1 year, you can get interest of 4.40%. For 1 year to 389 days to 390 days upto 18 months, the rate is 4.90%. On FDs between 18 months upto 2 years, you can enjoy interest rate of 5%. From 2 years 1 day upto 3 years, the interest rate is 5.15%, whereas for 3 years 1 day upto 5 years it is 5.35%. For 5 years 1 day to 10 years, the interest rate is 5.50%.

Axis Bank
For Axis Bank, the FDs between 7 and 29 days is 2.50%, and from 30 days to 3 months it is 3.00%. From 3 months to 4 months interest rate is 3.50%, 4 months to 6 months interest rate will be 3.75%, and from 6 months upto 11 months and 25 days it will be 4.40%. For FDs from 11 months and 25 days upto 1 year 5 days it is 5.15%. On FDs between 1 year 5 days and upto 18 months the interest rate will be 5.10% whereas from 18 months upto 2 years it will be 5.25%. From 2 years upto 5 years the interest rate on FDs is 5.40% and 5.50% from FDs for 5 to 10 years.

Kotak Bank
For Kotak Bank, the FDs between 7 to 30 days is 2.50%, and from 31 to 90 days it is 2.75%. From 91 to 179 days the FD interest rate is 3.25% and from 180 to 364 days it is 4.40%. For FDs between 365 to 389 days the rate is 4.50%. From 390 to 391 days it is 4.75% whereas it is 4.75% from 23 months to 23 months and 1 day less than 2 years also. From 3 to 5 years it is again 4.75%. From 5 to 10 years it is 4.50%.

Senior citizen FD rates
FD interest rates vary from bank to bank depending on their tenure, amount, and type of depositor. Senior citizens, who are above 60 years, get special interest rates on their fixed deposits, which are often 0.5% above the prevailing interest rates.

Timely closure
Timely closure refers to closing the fixed deposit account at the time of its maturity only. When closed upon maturity date, the bank pays back the principal amount with the interest accrued over the tenure chosen.

Premature withdrawal
Premature withdrawal or breaking of FD is usually discouraged by lenders, and in such a case they levy a penalty along with paying back the principal amount and interest at a lower rate. However, in case of emergencies, certain banks do waive off the penalty.



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6 Easy Steps To Deposit Money In Post Office RD Account Online

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Investment

oi-Vipul Das

|

For the January to March quarter, the government retained stable interest rates for small savings schemes, including the recurring deposit scheme. Every quarter, interest rates of small savings schemes are updated. Through the India Post Payments Bank (IPPB) app, you can deposit money online on your post office recurring deposit account online from the convenience of your home or workplace. Using the IPPB app you can transfer the minimum installment amount into your RD account online without compromising your comfort.

Post Office RD Interest Rate

In the midst of weak bank deposit rates the government has maintained interest rates untouched for the January-March quarter on small savings schemes, including 5-Year Post Office RD. For a minimum deposit of Rs 100 per month or any amount in multiples of Rs 10 with no upper limit the post office RD scheme is currently fetching an interest rate of 5.8% for a maturity period of 5 years.

6 Easy Steps To Deposit Money In Post Office RD Account Online

How to deposit money online in a post office RD account?

The government unveiled the digital payments app DakPay last month. The post office and IPPB customers can also make use of this. In order to transfer money to your RD account follow the below-listed steps:

Step 1: First of all you need to add or transfer money from your bank account to IPPB account

Step 2: Head to the ‘DOP Products’ section and select ‘Recurring Deposit’

Step 3: Now enter your RD account number and DOP customer ID

Step 4: Now opt the installment amount and duration.

Step 5: IPPB will update you of the successful transfer of payment made through the IPPB app

Step 6: Using the basic savings account of IPPB you can go for different post office schemes offered by India Post in order to render monthly installments.



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10 Best 3-Year FDs With Returns Up To 7.5% For Senior Citizens

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Investment

oi-Vipul Das

|

In order to gain a regular monthly income after retirement, elderly people always choose to save their savings in fixed deposits (FDs). Investment in FDs is often considered better relative to investment in highly risky stocks or mutual funds. In the last year or so, though, declining bank deposit rates have dramatically reduced their monthly income. This is because of the rapid repo rate cuts from the Reserve Bank of India which makes banks to cut interest rates on fixed deposits through tenures. There are still some banks which offer better rates on three-year FDs for senior citizens, despite falling interest rates.

Considering the rivalry they face in attracting deposits, the smaller private banks appear to top the rate table on fixed deposits. Small private banks promise senior citizens with interest rates of up to 7.50 per cent on three-year FDs. These three-year FD interest rates are higher in contrast with those provided by leading banks in the private and public sector. For example, on their three-year FDs for senior citizens, Yes Bank, DCB Bank and RBL Bank deliver 7.50 percent, 7.45 percent and 7.25 percent interest only. Some private sector banks such as Axis Bank, Kotak Mahindra Bank, ICICI Bank and HDFC Bank offer 5.9%, 5.25%, and 5.65 percent interest on three-year FDs for senior citizens.

Compared with leading private banks, the interest rates provided by small finance banks are stronger. For senior citizens, AU Small Finance Bank and Ujjivan Small Finance Bank offer 7.25 percent and 6.55 percent interest on three-year FDs, respectively. Coming to the public sector banks Canara Bank and Union Bank of India give the highest interest rate of 6 per cent for senior citizens on their three-year FDs. Whereas an interest rate of 5.8 percent on their three-year FDs is currently provided by Bank of India and the State Bank of India (SBI).

10 Best 3-Year FDs With Returns Up To 7.5% For Senior Citizens

Best 3-Year FDs For Senior Citizens With Interest Rates Up To 7.5%

Private Banks ROI per annum in %
Yes Bank 7.50
DCB Bank 7.45
RBL Bank 7.25
IndusInd Bank 7.00
Bandhan Bank 6.40
Public Sector Banks ROI per annum in %
Canara Bank 6.00
Union Bank 6.00
Bank of India 5.80
SBI 5.80
Punjab & Sind Bank 5.75

Conclusion

As given on the respective websites, the details on FDs is as of 6 January 2021. For senior citizens aged between 60-80 years, interest rates are provided for deposit amount less than Rs 1 crore. Quarterly compounding is considered for all FDs and the deposit amount ranges through banks. The amount varies from Rs 100 to Rs 10,000 at private and public banks respectively. Considering the current rate cuts, FDs can be a good and secure bet for senior citizens as the Deposit Insurance and Credit Guarantee Corporation (DICGC), an affiliate of the RBI, guarantees investments in fixed deposits of up to Rs 5 lakh.



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Should seniors go for special FD rates offered by some banks?

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In May last year, a few banks came up with special rates on certain long-tenure fixed deposits for senior citizens, in a bid to protect them from the blow of falling interest rates. Under the SBI Wecare Deposit, ICICI Bank Golden Years FD and HDFC Bank’s Senior Citizen Care FD schemes, the banks offer an extra 25-30 basis points (bps) interest on deposits with tenures of 5 years and above. This is over and above the 50 bps higher interest usually offered to senior citizens. The special FD rates apply on fresh deposits as well as renewals.

The closing date for investments in these schemes (of above mentioned banks only) has been extended to March 31, 2021.

The additional 25-30 bps interest offered over and above the usual senior citizens rates might have caught your attention. But we do not recommend locking in sums for such long periods. Besides, the current rates on these FD schemes are not attractive enough. Other private banks offer senior citizens better rates for even shorter tenures (up to two years). And, given that we are at a bottom in the interest rate cycle, shorter tenures are better now.

How they fare on rates

After the recent revision in rates, SBI Wecare offers 6.2 per cent interest per annum on deposits of less than ₹2 crore with tenures of five years and above.

Senior Citizen Care FD of HDFC Bank gives a tad higher rate of 6.25 per cent on deposits of less than ₹5 crore with tenures between five years and one day and 10 years.

For a similar tenure, ICICI Bank Golden Years FD offers 6.3 per cent on deposits under ₹2 crore.

While most public sector banks offer up to 6.1 per cent for senior citizens currently, the interest offered by some private banks go up to 7.45 per cent for a similar tenure. Small finance banks offer 7.5-8 per cent.

Another option available is the Post Office Senior Citizen Savings Scheme (SCSS) that pays 7.4 per cent per annum for a maturity period of five years.

Besides its implicit government backing, SCSS scores over bank FDs, given the tax benefit upon investment, under section 80C of the Income Tax Act (available only if you opt for the old regime tax rates).

However, interest under the SCSS is paid on a quarterly basis only, while banks generally offer investors the option to choose from monthly/quarterly payouts or cumulative payout at the time of maturity.

Should you go for it?

The prevailing interest rates in the country are close to bottoming out and may remain at these levels till the economy recovers.

At the same time, the rate cycle cannot persist at the current levels for a long period, given the elevated inflation and signs of green shoots in the economy.

Hence, locking your deposit into a tenure of more than five years now, that too at relatively lower rates, may not be a wise decision.

This is because you can lose out the opportunity to reinvest at higher rates once interest rates begin to inch up.

It makes sense to opt for shorter-term deposits of up to two years.

For a tenure of up to two years, SBI offers senior citizens up to 5.6 per cent interest, while HDFC Bank and ICICI Bank offer up to 4.25 per cent only. Other private banks (such as DCB Bank) offer up to 7.2 per cent.

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How you can take the benefit of indexation

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With the deadline for filing tax returns approaching, two friends, share their tax woes.

Ram: I made a neat gain of ₹1 lakh when I sold some of my old mutual funds (MF). But what the market giveth, the taxman taketh. I wonder what will be left after the taxman’s cut.

Shyam: Worry not. Let’s see if you can apply indexation.

Ram: What is indexation and what has it got to do with my taxes?

Shyam: Well, indexation is one of the few acts of kindness from the tax department. So, accept it graciously when you can! Under the Income-tax Act, you can apply indexation, that is, adjust the purchase price of an asset for inflation while calculating capital gains.

Ram: As if taxes were not enough, you want me to deal with inflation too!

Shyam: No. You see, this is one time, you wish inflation were higher! To calculate capital gains, you must deduct the purchase price of an asset from its sale price. But you also need to account for the erosion in the value of that asset over time due to inflation. So, the tax laws allow you to adjust your purchase price for inflation before you calculate your capital gain.

Ram: So, I can finally put the soaring Consumer Price Index inflation to some use.

Shyam: Not so fast. You can only use the Cost Inflation Index (CII), published by the Indian Income Tax Department for indexation. Let me give you an example. If you invested ₹2 lakh in debt MF schemes and redeemed your investments at ₹3 lakh a few years later, then your capital gain isn’t really ₹1 lakh.

Ram: Then what is it?

Shyam: If the CII for the year of purchase is 100 and for the year of sale, 120, then you can adjust your purchase cost by a multiple of 1.2 (120 / 100). That is, your inflation- adjusted purchase cost is ₹2.4 lakh (and not ₹ 2 lakh) and your capital gain effectively becomes ₹60,000 (₹3 lakh minus ₹2.4 lakh). It’s on this amount, that you pay 20 per cent tax.

Ram: Let me use indexation to get whatever I can out of my MF investments.

Shyam: It’s not that simple. You can seek refuge in indexation for investments made in debt MF schemes, but not equity schemes. Also, you can do this only for long-term capital gains, that is, only if you held on to your debt MF investments for 36 months or longer.

Ram: Should have known that ‘terms and conditions apply’ always!

Shyam: Don’t be disappointed. You can also use indexation for other assets such as property (land/ house) and gold (jewellery / ETF). Gains made on sale of property held for more than two years and gold held for more than 3 years are considered ‘long-term’.

Ram: Maybe I shouldn’t crib when my wife buys and sells gold. As long as she does it after three years!

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