What is Forex Card?
03 Jul 2019
Planning to go on a trip abroad? Don’t forget to carry a forex card for a hassle-free trip. So, what is forex card?
A forex card is the safest way of carrying foreign currency for paying for expenses when you are travelling abroad. It is a prepaid card which you can load with a specified amount in a foreign currency. So, when you are travelling overseas, you can swipe this forex card to pay for your expenses, instead of carrying cash around. It works as a debit card. You can also withdraw cash with your forex card from an ATM.
What is forex card and its types?
A forex card is a type of prepaid card in which you can load money in foreign currency. It is globally accepted, and you can either pay for your expenses using your forex card or withdraw cash in foreign currency at an ATM.
Forex cards are largely divided into two types – single currency cards and multicurrency cards.
- Single currency forex card: A single currency forex card can be loaded with a particular foreign currency. You can use load this card with a currency when travelling to a particular country.
- Multi-currency forex card: As the name suggests, you can preload this card with multiple currencies. Check with your bank about the currencies that you can load onto your multi-currency forex card.
What is the use of forex card?
A forex card is your best friend when you are travelling in a foreign country. There are several benefits of carrying a forex card over travelling with wads of cash or looking for places to convert currencies.
- With a forex card, you are likely to get a better conversion rate. Buying a forex card from a bank is a cheaper solution to currency converted.
- Most banks offer a range of forex cards that can suit your needs. You need not necessarily have an existing account with the bank to be able to purchase a forex card.
- You can avail of many deals, offers and discounts that most banks offer when you purchase a forex card.
- A forex card is much safer than carrying cash around. It comes with the chip and pin technology, which adds another layer of safety. Further, if you lose your forex card, you can get your card hot listed immediately to avoid any misuse of the card.
- If your card has a remaining balance when you are back home from travel, you can encash the amount at the existing exchange rates. To avoid maintenance charges, you can get your card blocked until your next visit overseas.
How forex cards work?
What is forex card if not a debit/ credit card for your overseas travels. They are globally accepted and are a safer alternative to cash. But how does a forex card work?
It works exactly like a credit or debit card. You apply for a card. Once your application is approved, you receive the card with a pin. Change the pin. Use internet banking to load the card with your desired amount and currency. Now you are good to go.
When abroad, just swipe your forex card at the point of sale machine whenever you pay for something. Just like a debit/ credit card transaction, you will receive SMS and email notification of your transaction and the balance.
Gone are the days of travelling with cash in hand. The world has gone digital and it’s time you did, too. With a forex card in hand, you can get the best deals. Be a global citizen and shop without any limits with a forex card. Avoid queues for exchanging your currencies. Forget about the hassles of travelling with wads of cash in your pocket. Just swipe your forex card and enjoy your trip to the fullest.
What is a Recurring Deposit Account & How to open this Account
Features of recurring deposit account:
A recurring deposit account can be opened for as less as Rs. 100 depending on the bank.
The installment in most recurring deposit accounts is fixed and has to be deposited on the same day every month. Some schemes allow quarterly or half yearly installments.
All the recurring deposit installments mature on the same day.
The tenure for a recurring deposit is flexible and depends on the depositor. Banks may have a minimum tenure for an RD, but the ultimate tenure fixed depends on the depositor and his need for funds.
The rate of interest for recurring deposits is around the same rate as a fixed deposit account.
No tax is deducted on the interest earned on a recurring deposit account if the amount of interest does not exceed Rs. 10,000. A depositor can submit Form 15G/15H for exemption from tax deduction. Form 15G/15H states that the depositor’s income is below the no tax limit and the bank should not deduct tax on the interest earned.
The depositor can avail a loan against the recurring deposit up to 95% of the recurring deposit amount.
The interest earned on a recurring deposit amount is added to the taxable income of the depositor.
How to open recurring deposit account in bank:
Opening a recurring deposit account is an extremely simple process. To make it easy for all types of depositors, banks have made it possible to open an RD account online and offline.
How to open RD account online:
It is very convenient to open an RD account online via net banking. Before opening an RD account, it is important to check the rate of interest for different tenures. Many banks also have a recurring deposit interest calculator where you can check the final maturity amount and the interest on the deposit.
To open RD account, you need to log in to net banking. Depending on the bank, the net banking structure will be different. You need to select the option to open a new recurring deposit account. Once you select that, you need to decide the installment amount and the tenure. You will also need to select the account to link to your RD account i.e. current account or savings account.
One important thing to remember is to specifically choose ‘Senior citizen’ option if you are eligible. Most banks give a higher rate of interest to senior citizens.
The next important point to remember is the maturity instructions. Depending on whether you immediately need the funds or not, you can opt for a maturity of the entire principal and interest amount, or convert the entire amount to an FD. You also have the option of converting the principal amount only into an FD. If you decide to convert it into an FD, then you need to decide the tenure for the FD as well.
The last detail you need to take care of is the nomination details. It is recommended to set up a nomination for your investment especially if you have an account under a single name.
Once these details are entered, you need to submit it and the bank debits your account. Once the account is debited, the RD gets created.
How to open RD account offline:
Opening an RD account offline is also very simple. All you need to do is go to the bank branch and fill up a form for opening a recurring deposit account. You need to fill up the required details and submit it to the bank along with a cheque for the installment amount. If you are a customer of the bank then you need to put in your bank account details along with other details such as maturity instructions and nomination details.
If you are opening an RD account in a bank in which you do not have an account, then you will have to provide your KYC documents along with the account opening form and other details. You will need to decide the RD tenure, the installment amount, the nomination details and the maturity amount. You will need to either give standing instructions to your bank for a periodic debit to the bank account or personally deposit money in your RD account to ensure the installments are met. If you want to get an exemption from TDS on your interest, be sure to submit Form 15G/15H.
Once the RD is processed and opened, the bank will provide an RD certificate bearing all the details.
What is Life Insurance ?
Life can be pretty uncertain. The death of a loved one is always painful, but it can have pretty serious financial consequences if it happens to be an earning member. Life insurance was devised to protect a family in the event of the death of an earning member. So let’s look at what is life insurance in some detail.
Life insurance definition is that it’s a contract between an individual and an insurer. The individual takes out an insurance policy and pays monthly or annual premiums. If the insured person meets with an untimely death, a lump sum is paid to his family, whether it’s parents, spouse or children.
Now that we have understood life insurance meaning, let’s look at the various types of products available to you.
When you are finding out what is life insurance policy, you should also understand all the different options. Among them is term insurance. This plan is for a certain fixed period of time. For instance, many people choose to have a life insurance policy till the time they are earning, so that their families do not have to suffer loss of income. The lump sum or death benefit paid will ensure that the families will be able to continue the lifestyle they are accustomed to. Some policies cover permanent disability as well. You can take out a term insurance that lasts for as long as you wish – till you are 60 years old or even a hundred! Of course, you will have to pay higher premiums if you take longer policies.
Whole life insurance
Here’s another term you need to learn while learning what is life insurance policy, and that is whole life insurance. This will provide you with lifetime coverage. Of course, you will have to pay premiums for your entire life for this kind of policy.
An endowment policy is one that combines insurance with investment. The policy is for a fixed period and the policy holder gets a certain amount at the end of it, if he or she survives that period. If the policyholder does not survive, the nominee will get the sum insured.
Unit Linked Insurance Plan
The Unit Linked Insurance Plan or ULIP is a type of endowment policy which combines life insurance with investment. A portion of the premium goes to cover life insurance, while the remainder is invested in either equity or fixed income instruments. The policyholder has the option of selecting the mix of instruments depending on his or her risk appetite and investment goals.
Benefits of life insurance
Now that we have seen what the meaning of life insurance is, let’s look at the benefits.
Protection for family
Obviously, the biggest advantage of life insurance is that it provides financial protection for your family in the event of an untimely death. Ideally, you should take a life cover that is 10 times your annual income to protect your family’s interests.
There’s another reason to invest in life insurance, and that is tax benefits. Premiums paid are eligible for a reduction in taxable income under Section 80C of the Income Tax Act. However, the amount is limited to 10 percent of the sum assured.
There are many choices available, from plain term insurance to ULIPs that combine insurance and investment.
Policies like endowment or ULIPS will help you save for long periods.