by Vinaya HS on December 30, 2009
in Finance
I’ve experienced first-hand and also repeatedly advised acquaintances and readers of this blog, the benefits of having independent health insurance — health insurance that’s not tied to your employment — for yourself and your dependents.
However, amidst all the events that have happened in my life in the past few months, I let my own health insurance lapse. I simply forgot to renew it — it’s another matter though that the insurance company conveniently forgot to remind me.
A reminder that personal finance is not a one-time activity. It’s a lifelong journey. And the onus is on you to be in charge.
What do you think?
by Vinaya HS on December 29, 2009
in Finance
Six months back, I’d complained that,
While one can request for a copy of one’s credit report while applying for credit, what about those who’re not inclined to avail credit right away. How then does one access one’s credit information report? What about those who’ve already availed credit facility? Surely, they’d like to know their credit scores too.
Here’s some great news — you can now apply for and obtain your credit information report from CIBIL. A quick extract reads,
You can now access your Credit Information Report (CIR) directly from CIBIL. As you may be aware, your CIBIL CIR is a factual record of your credit payment history compiled from information received from credit grantors. The purpose is to help credit grantors make informed lending decisions — quickly and objectively, and enable faster processing of your credit applications to help provide you speedier access to credit at better terms.
Read the sections under the menu heading “Your CIBIL Credit Report” for a thorough understanding. I plan to apply for and obtain my CIR in the coming week. Let me know if you’ve been able to obtain yours.
Tip Tuesdays is my initiative to share practical personal finance tips — every Tuesday. I’d be delighted if you could share a tip or two from your own experiences. Drop a comment to submit your tip. And, as always, do spread the word if you find this useful.
by Vinaya HS on December 28, 2009
in Finance
It’s been a long break from the world of blogging. So many events have happened in this time — my marriage, my trips to Devarayanadurga, BR Hills, K. Gudi, and Rajasthan, and the Swift breaching the 19,000 kilometer mark to name a few.
I’d like to thank everyone who wrote to me asking about my whereabouts. This blog wouldn’t be a success without you. I’ve also received a good number of personal finance queries and I will address these in the coming days.
That said, it feels great to be back. Stay tuned for more from the intricate world of personal finance.
by Vinaya HS on August 4, 2009
in Finance
I have had the unfortunate privilege of owning a HDFC Bank 3-in-1 Account (Savings, Demat — linked to Savings, and Trading). The Demat and Trading accounts were used for a grand total of two transactions. The Savings account saw a token amount being deposited, then saw the two transactions, and then saw a zero balance. To date, I have no idea why I opened this account. I closed the Trading account by handing over a simple letter at the base branch. The Demat account couldn’t be closed because it was linked to the Savings, which therefore needed to be closed first.
Here’s how you can close your HDFC Bank Savings Account:
- Reduce your account balance to zero.
- Take a photocopy/scan of your debit card (for backup and safety).
- Take a photocopy/scan of the first and last unused check leaves in your checkbook (for backup and safety).
- Go to your base branch (where you opened your account).
- Fill out an account closure form.
- You’ll be intimated of your account closure by post. If you don’t receive any intimation within a week or two, call customer care and confirm account closure (keep your Customer ID and Phone Banking PIN handy).
- Tear-up your unused check leaves, debit card, and any other leftovers.
Any balance leftover in the account after closure will be returned via. demand draft. Uncredited interest amount, if any, will be accounted for in this reimbursement.
Here’s a pictorial view of the end of my HDFC Bank Savings Account.
Tip Tuesdays is my initiative to share practical personal finance tips — every Tuesday. I’d be delighted if you could share a tip or two from your own experiences. Drop a comment to submit your tip. And, as always, do spread the word if you find this useful.
by Vinaya HS on August 3, 2009
in Finance
Interesting statistics published by the Reserve Bank of India on the number of forged/counterfeit notes detected by the Indian banking system.
by Vinaya HS on August 3, 2009
in Finance
In response to my post about guidelines on detection and impounding of counterfeit notes at Indian Banks, a reader asks,
Has anyone got a fake currency note through an ATM? What is the process to be followed in such a case? Does the bank keep track of each and every note fed into the ATM?
With most banks outsourcing to a third-party the loading of cash into ATMs, I’m not sure where the accountability and audit trail lies. I’ve never faced such a situation. How about you? If you have, what did you do?
by Vinaya HS on July 31, 2009
in Finance
Have you ever pondered over questions such as “What’s the interest rate payable on my Savings or Current Account balances?” or “What happens if I opt for a premature withdrawal of my Fixed/Term Deposits?” or “What happens to an account that I no longer operate?” etc., then this Master Circular on Interest Rates on Rupee Deposits published by the Reserve Bank of India is a must read for you. Spend some time with this material and increase your knowledge on how the most commonly used financial instruments work.
Awareness Fridays is my initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.
by Vinaya HS on July 29, 2009
in Finance
A reader writes,
I have been banking with Citibank for the past ten years. They’ve now deducted Rs 250 for not maintaining a minimum balance — without even intimating me. Now, Citibank often calls me offering credit cards and other unnecessary stuff, but they never bothered to call and inform me that they were going to levy a penalty because my salary was no longer being credited to this account. Pathetic service. Have decided to close this account.
In case you want to close your Citibank savings account, you’ll find my experience handy.
by Vinaya HS on July 28, 2009
in Finance
I often get emails that read,
I want to invest in so-and-so financial instrument so that I can avoid paying income tax. Do you think this [financial instrument] is a good option? Alternatively, can you suggest other financial instruments that will further help me avoid paying income tax?
In my opinion, paying income tax and investing in a financial instrument ought to be independent and mutually exclusive actions. You should invest in a financial instrument only if it helps you achieve your financial goals — and no, “I want to avoid paying income tax” is not a financial goal.
Pay income tax. Define your financial goals. Invest in the right financial instruments; if a financial instrument does qualify for income tax deductions/exemptions, you just got the best of both worlds!
What do you think?
Tip Tuesdays is my initiative to share practical personal finance tips — every Tuesday. I’d be delighted if you could share a tip or two from your own experiences. Drop a comment to submit your tip. And, as always, do spread the word if you find this useful.
by Vinaya HS on July 26, 2009
in Finance
A reader asks,
I have lost my acknowledged (i.e. stamped) income tax returns (form ITR-V) for last year. What is the procedure for obtaining a duplicate?
My opinion: Visit the income tax office in your geography and meet your assessing officer. A requisition letter along with an unacknowledged copy of your income tax returns (Form 16, or ITR-V, or whatever you have) should be handy. You might want to carry your PAN Card along too.
Have you ever been in a similar situation or know someone who was? What do you think this reader should do?
by Vinaya HS on July 24, 2009
in Finance
The Master Circular on Maintenance of Deposit Accounts issued by the Reserve Bank of India — a must read for anyone who transacts with a bank.
Awareness Fridays is my initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.
by Vinaya HS on July 21, 2009
in Finance
If you’re filing your income tax returns on your own, an essential piece of data that you would need is the Assessing Officer’s Ward/Circle number. Thankfully, this information has been made publicly available by the Income Tax Department of India at Know Your Assessing Officer (use Internet Explorer to open this page).
Tip Tuesdays is my initiative to share practical personal finance tips — every Tuesday. I’d be delighted if you could share a tip or two from your own experiences. Drop a comment to submit your tip. And, as always, do spread the word if you find this useful.
by Vinaya HS on July 17, 2009
in Finance
This is a guest post from Shilpa at Under the Rainbow. Though Shilpa claims that “she knows zilch about financial planning,” her guest posts never fail to prove the opposite.
Gratuity is a favor or gift, usually in the form of money, given by an employer to an employee in return for the employee’s loyal service. It is an employer’s way of thanking an employee for his loyalty. As per the Payment of Gratuity Act 1972, a company with ten or more employees should pay fifteen days’ salary (i.e. Basic + Dearness Allowance) to the employee on completion of a minimum of five years of uninterrupted service at the time of separation (by the way of resignation or retirement or death).
Gratuity up to Rs 350,000 is exempt from income tax. For a government employee, any amount is tax free. In case of death of the employee, the entire Gratuity is paid to the nominee without any tax deductions. An employer can also voluntarily choose to pay more Gratuity, but that amount would be taxable.
Here’s a simple example:
Mohan has resigned from ABC Pharmaceuticals after twenty years of continuous service. At that time, his Basic salary was Rs 22,000. His average number of work days per month was 22. The Gratuity payable would therefore be (Rs 22,000 / 22 days) * 15 days per year of service * 20 years of service = Rs 300,000.
I’d love to hear from your readers if they’re aware of any real examples — say if a family member or friend has received Gratuity.
Awareness Fridays is my initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.
by Vinaya HS on July 16, 2009
in Finance
I’ve previously written about creating a real emergency fund with real cash before you use your credit card for emergencies. It so happens that I’ve had to plan for a personal trip towards the end of the year and which will require me to use my credit card (for accommodation, air tickets, etc.). The earlier strategy can be reused — create a real trip fund with real cash before using my credit card during the trip.
I think this strategy can be generalized for any credit card usage.
Create a real “purpose” fund with real cash before using the credit card for that “purpose.”
Peace of mind guaranteed. That’s what is missing in today’s world right? What do you think?
by Vinaya HS on July 6, 2009
in Finance
I also asked D, why she didn’t own a credit card. Her response:
I don’t believe in the mechanism of credit — it’s not my money to begin with. By credit, I include credit cards, loans, overdrafts etc. — any money that’s not mine. I’m also not aware of the procedures to repay the amount. I want to keep my life simple and stress-free. So I don’t own a credit card.
That evening, one look at the check I was depositing at the ATM as payment for my credit card usage, sent D’s resolution one notch higher.
by Vinaya HS on July 3, 2009
in Finance
I’d raised a few questions when I last wrote about accessing your credit scores in India. A couple of days later, the Economic Times published an interview featuring Credit Information Bureau (India) Limited (CIBIL) addressing these very concerns. It’s a must read, especially if you’ve previously availed credit or are planning to.
Awareness Fridays is my initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.
by Vinaya HS on July 2, 2009
in Finance
I was curious to know why a friend of mine didn’t own a credit card — especially in this day and age. My friend’s response:
Haasige iddashtu kaalu chaachu (idiom for: I don’t want to spend money that’s not mine to begin with). Add to that the hassles of remembering payment due dates, amounts, etc. Throw in the risk of physically losing/misplacing the credit card (I don’t even want to talk about the virtual aspect). It’s very easy to fall into a strangling spiral of spending money that’s not yours. I’ve seen people turn into compulsive spenders just to recover the annual fee and to utilize offers; seen people shift to another bank that clears your existing credit and gives you even more (read: balance transfers); seen people exhaust the limit on one card and simply move on to the next one in their wallet. They aren’t a happy bunch today. When you can keep things simple — and yourself happy — with your hard-earned cash, why would you want to get into the mess of credit cards?
I do confess that I have been attracted to cash-back and point-redemption offers, but one look at the fine print and…I know that it’s not for me. Of course, there are certain drawbacks to not having a credit card; but when you own your choices you also own their consequences.
What do you think?
by Vinaya HS on July 1, 2009
in Finance
