Features & Benefits Flexible Recurring Deposit Scheme
03 Jul 2019
Flexible Recurring Deposit Scheme (Yatha Shakti Jama Yojana)
Bank of Baroda offers its customers a unique scheme that makes it possible for you to save money flexibly, month after month. You can avail the attractive Yatha Shakti Jama Yojana - a flexible recurring deposit scheme which comes with a host of benefits and salient features. Under the flexi recurring deposit scheme, depositors may choose a small core amount to open their deposit and increase the core amount subsequently, up to three times.
Features of the Flexible Recurring Deposit Scheme
Opening the flexi RD
The flexi RD can be opened with a small initial amount of Rs.100 only
Amount of deposit
Depositors may choose their initial amounts in multiples of Rs 100, up-to a maximum amount of ₹10,000. You may choose to deposit either your core amount or up-to 3 times your core amount. Core amount contributions are mandatory in this scheme.
Tenure of deposit
The tenure of the recurring deposit schemes range from 12 months to 120 months.
Interest on the flexi RD will be paid and credited on a half yearly basis in the months of September and March. The interest paid is calculated on daily balances, with half yearly compounding of interest.
Benefits of the Flexible Recurring Deposit Scheme
Additional interest rate benefits
Senior citizens with deposits below ₹1 crore are eligible for 0.50% additional interest. Staff and ex-staff members of Bank of Baroda are also provided with additional interest. Ex-staff members who are senior citizens can avail both bonus interest rates.
Nomination facility is also offered to flexi RD holders.
Premature withdrawal facility
Interest is paid after deducting a penalty of 1% from applicable rates or contracted rates, whichever is lower in only those cases that are subject to charging penalty.
Loan and overdraft facility
You may avail a loan or overdraft facility against the flexi RD of up to 95% of the outstanding balance in your account at interest rates as per Bank of Baroda guidelines.
No penalties are levied for delayed payments of monthly instalments.
No TDS will be deducted for persons submitting forms 15G/15H as applicable
The contents of this article/infographic/picture/video are meant solely for information purposes and do not necessarily reflect the views of Bank of Baroda. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Bank of Baroda and/ or its Affiliates and its subsidiaries make no representation as to the accuracy; completeness or reliability of any information contained herein or otherwise provided and hereby disclaim any liability with regard to the same. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Bank of Baroda or its affiliates to any licensing or registration requirements. Bank of Baroda shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
Benefits of Life Insurance
Life insurance is a must in today’s world. Modern living is an expensive business, and people have to bear the burden of huge costs like children’s education, EMIs on home loans, healthcare and so on. So it is important for every earning member to have a life insurance policy to protect the financial interests of his or her family. There are many benefits of life insurance policy, which we will look at in this article.
Features of life insurance
Let’s look at the features and advantages of life insurance policy:
Protection: The first and foremost objective of a life insurance policy is to ensure the financial protection of your family, and this could include dependent parents, spouse, children or siblings. The demise of the sole earning member could put dependents to considerable hardship, especially since cost of living is very high these days. Life insurance gives you the assurance that your family members will be looked after in the event of your untimely demise.
Contract: Life insurance is basically a contract between the insurers and the individual who takes out the policy. You pay premiums every quarterly/half yearly/yearly to the company. In return, the insurer will give a lump sum to your family in the event of your demise.
Premiums: Premiums are paid quarterly / half yearly which you need to pay to get life insurance. The amount will vary from person to person, depending on the tenure of the policy, age of the policyholder, health and type of policy.
Affordable: Life insurance is an affordable way of ensuring the financial well-being of your family. Premiums on policies, particularly term insurance, are quite low and worth your while for the protection they offer.
Easy to buy: Buying insurance from company is quite easy. Insurance companies have specified persons, who will visit you at your home or office and help you with options and paperwork. You can also do it online at your convenience.
Tax benefits: Another one of the benefits of life insurance policy is that you can deduct the premiums you have paid from your taxable income. Under Section 80C of the Income Tax Act.
Savings: There are some life insurance products that combine savings and insurance. This can be a good way of saving for the future and protecting your family at the same time
Types of life insurance
Now that we’ve seen the essential features of life insurance policy, let’s look at the types:
This is the most basic, and most popular, of life insurance policies. You purchase a policy for a certain period for which you pay premiums. For example, if a policyholder wants a policy till the age of 60, he or she can take one. And if the policyholder passes away before 60, the nominee is paid the death benefits.
Unit-linked Insurance Plan
A Unit-Linked Insurance Plan (ULIP) combines investment with insurance. At the end of the policy, the policyholder gets a certain sum. This is unlike a term plan where the payout is made only on the death of the policyholder. Part of the premium is paid for life insurance, while the remainder is invested in either stocks or bonds, depending on the investor’s risk appetite and investment goals. The investments yield returns which are then given to the policyholder after the end of the policy period
PPF Tax Benefits & Features you must Know About
A popular investment and tax saving instrument for Indians since it was first introduced in 1968 by the Central Government, the Public Provident Fund is a great tool to boost small savings by every individual across India. One of the biggest reasons thousands open opt for PPF is the PPF tax benefits.
The following are the features of a PPF for your comprehensive understanding:
The PPF is a long-term investment with a minimum tenure of 15 years. PPF holder can extend the tenure by a period of 5 years every time.
Rate of interest
The rate of interest is determined by the Ministry of Finance every quarter. The compound interest is paid out at the end of the financial year i.e. on March 31. The interest is determined based on the balance between the closing of the 5th day and last day of each month.
Limits on investment
PPF is appealing to every section of society with different income levels. The minimum deposit every financial year is Rs.500 while the maximum amount is Rs.1, 50, 000. You can deposit the amount in lumpsum or in instalments in a financial year.
You need to have at least Rs.500 to begin with when you open the account. Maximum amount upto Rs.1,50,000 can be invested every year and is eligible for exemption under section 80C of IT Act.
Mode of deposit
There is limited restriction on how you can deposit money into your PPF account. You can transfer funds online, deposit cash, cheque or pay through a demand draft.
Frequency of deposit
The account holder needs to make a deposit at least once a year for 15 years.
The account holder may nominate one or more people (maximum 4) who will receive the amount in the PPF in case of the account holder’s death. The amount that each nominee will receive can also be determined by the account holder during nomination.
One individual can hold only one PPF account at any given point of time. No joint account is allowed.
The PPF is backed by the government and offers complete protection of investment regardless of market conditions.
You are eligible to take loan against your PPF provided it is between its 3rd-6th Financial year. The loan amount is capped at 25% of the balance in the 2nd year preceding the year in which you applied for the loan.
You need to be an Indian citizen residing in India. Members of HUF cannot open a PPF account. One eligible individual can hold only one PPF account. However, an individual can hold another PPF account on behalf of a minor.
Can one withdraw from their PPF before maturity?
A PPF account can be closed only when it completes 15 years. However, if the account holder needs to withdraw money from their PPF account due to a financial emergency, they can do so only from the 7th year onwards. These withdrawals can be made only once in a fiscal year.
What are the tax benefits offered with a Public Provident Fund? Is PPF maturity taxable?
A PPF is categorised as EEE which stands for Exempt-Exempt-Exempt. This means that the principal amount can be deducted under Section 80C of the Income Tax Act, 1961.
Furthermore, there is no PPF maturity tax i.e. the account holder does not have to pay tax on the interest accumulated on maturity of the PPF or the total amount post maturity.
A simple enough tax saving instrument with good rate of interest, you can start a PPF for yourself or your child with Bank of Baroda.
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