Stay vigilant and monitor your account activity regularly. Always log out of the mobile/ net banking after completing the transaction. Also, keep NFC payments disabled in your mobile banking application, if you’re not using it for a long period of time. Also, besides all these tips, you can always reach out to your bank by calling their helpline or using in-person banking if you prefer traditional banking.
My child is planning to move to the US for studies. How can I send money abroad?
For all money transfers abroad, it’s important to adhere to the Liberalised Remittance Scheme (LRS) guidelines set by the Reserve Bank of India (RBI).
With the evolving technology, India is certainly rooting for a boundaryless world which leads to multiple options for money transfers. The most commonly used routes are international wire transfer and a forex card. Under LRS, resident individuals can remit up to USD 250,000 or equivalent foreign currency overseas per financial year for education expenses, maintenance of close relatives, leisure travel, etc. Also it’s mandatory to provide necessary documentation as specified by the RBI when making such remittances.
For a child planning to study in the US or already in the US to pursue his/her education, Indian banks can provide multiple ways to manage large expenses such as education fees as well as day-to-day expenses.
With the help of your existing banks in India, you can transfer money directly to your child’s US bank account. Similarly, you can also send funds directly to the institute’s US bank account for the education fees, with the requisite beneficiary details, including name, account number, and SWIFT/BIC code. Once the bank receives all the relevant details and the payment, either through the bank’s online banking platform or a branch, the bank completes its due diligence and initiates the wire transfer. It typically takes 1 to 3 business days for the funds to reach the beneficiary’s account.
Another option is to pay funds through a forex card or travel card, which is a prepaid card that allows you to load US Dollars (USD) and can be utilised by your child studying in the US to manage their expenses. It functions like a credit card but is less expensive and provides a convenient and secure way of carrying USD. You may procure the card for your child before they travel abroad, and load the funds either through the bank’s online banking platform or by visiting a bank branch. Some of the best forex cards offer flexibility and control over finances during the child’s education journey.
Various online payment service providers and platforms offer international money transfer services as well, which you can explore for sending money abroad for your child’s education. Remember to choose only reputable and reliable service providers with competitive exchange rate and low fees.
Regardless of the method chosen, parents must prioritise security, speed, and competitive exchange rate to ensure their child receives the necessary funds seamlessly. Indian banks provide convenient and reliable solutions for sending money abroad for your child’s education, while adhering to regulatory requirements and guidelines.
I’ve recently started my career and got into a corporate life. Need help to understand what are the options for saving tax? Can a fixed deposit save tax?
There are many options for tax planning in terms of investments. One of the common options is a tax-saver fixed deposit.
Tax-saving fixed deposits, also known as tax-saver FD, is specifically designed to provide tax benefits under Section 80C of the Income Tax Act, 1961. The interest earned on tax-saving FDs is taxable, but it is subjected to Tax Deducted at Source (TDS) only if the overall interest income from all fixed deposits (both regular and Tax Saver FDs) in the bank exceeds Rs. 40,000 (Rs. 50,000 for senior citizens) in a financial year. The maximum investment limit for tax benefit under Section 80C is Rs. 1.5 lakh in a financial year. As per the Income Tax Act, tax-saving FD has a lock-in period of five years.
However, they do not have an auto-renewal feature. Upon maturity, you have the option to re-book the FD for another term or withdraw the funds.
I am in my late 20s and would like to save for a rainy day. How do I build and manage my emergency fund?
Building and managing an emergency fund is a prudent financial step, and you may consider opening a long-term fixed deposit linked to your savings account. This can be parked separate and can yield interest income at a regular/ defined period. This will keep your funds safe, away from unnecessary expenditure and earn interest on the deposited amount. With the new age products and services, fixed deposits can also be kept flexibly linked with a savings account that allows you to liquidate in your savings account in times of any emergency. Your bank provides a holistic financial service, and hence, it’s wiser to take investment advice from your branch staff or relationship manager.
You may also set up a recurring deposit to automatically deduct any amount of your choice on a monthly basis from your savings account. This will not only reserve a fixed amount from your savings account but you will also earn interest on this reserved amount for the chosen period.
My son is 22 years old and he has just started working. Is there any option for a family banking account?
It’s a great idea to on-board and teach your children about financial transactions, right at the beginning of their careers. You can open an account for each of your family members and link them together as family banking accounts. All account holders under family banking get the same benefits. The average balance requirement is divided among the family members so that you can maintain the balance in one account or in a group of accounts. The banks may also offer additional benefits such as a dedicated relationship manager, an international debit card etc., to all account holders in a family program. Family banking makes it easier for you and your family to understand your overall financial situation, and also offers advantages such as ease of fund transfers.
I’ve just started my working career. Is fixed deposit a good option for saving and what are the specific benefits it offers?
A regular fixed deposit allows you to deposit a lump sum amount for a fixed tenure at a predetermined interest rate. The interest is usually compounded quarterly or on a predetermined schedule and the principal amount and the interest earned will be deposited to your linked savings account, post maturity of the fixed deposit. You can also choose and opt cumulative and non-cumulative payment of interest on the FDs defining the tenure. Cumulative FDs compound the interest and pay out the total amount at maturity, while non-cumulative FDs offer periodic interest payouts, such as monthly or quarterly. You can also book a tax-saving fixed deposit with a lock-in period of five years.
Fixed deposits are considered one of the safest investment options as they offer capital protection. The principal amount is guaranteed, and the interest rate is predetermined at the time of investment, providing clarity on the returns you can expect at maturity. Also, in accordance with DICGC guidelines, each depositor in a bank is insured up to Rs. 5,00,000 for both principal and interest amount held.
Banks also offer flexibility in choosing the tenure of your investment. You can opt for short-term deposits (a few months) or long-term deposits (several years) based on your financial goals and liquidity needs. Some banks allow you to avail overdraft/loan against your fixed deposit. This can be beneficial in times of financial need, providing a source of liquidity without breaking the FD prematurely.
It’s important to note that interest rates, tenure options, and features may vary among banks, so it’s recommended to carefully review the terms and conditions of the fixed deposit options offered by your chosen bank. Additionally, consider consulting with a financial advisor to align your investment choices with your overall financial goals.
Soumitra Sen, Head – Consumer Banking and Marketing, IndusInd Bank.
3.6 Crore Indians visited in a single day choosing us as India’s undisputed platform for General Election Results. Explore the latest updates here!
Download The Mint News App to get Daily Market Updates.
More
Less
Published: 26 Jun 2024, 01:05 PM IST