All you need to know about multiple credit cards!

Using multiple credit cards is not a bad idea. But you should know how to manage them Do you have more than one credit card?  Using multiple credit cards is not a bad idea. But you should know how to manage them in a systematic way, because a single mistake can lead you to pay penalties and high interest rate. Know these facts if you are using more than one credit card.

• Decide why you need second credit card first. 
• Pay all your credit card bills on time. 
• Multiple cards and credit score.
• Keep track of all your credit cards.
• Select your cards smartly while purchasing.

Know the best ways to carry money abroad

Vacationing abroad or simply travelling to international destinations needs lot of planning and preparations. Hotel booking, airline tickets and the most important: how to carry money while travelling abroad? Till few years' back international credit and debit cards were the options for transactions abroad; but there are multiple options available now: ranging from prepaid travel cards to international mobile wallets. Carrying cash and exchanging it at the airports and hotels might not be a great idea as foreign exchange rates at the airport and hotels are the highest, but it's often good to get some foreign currency before you leave for the journey so that you have cash on hand for your immediate expenses like buying a meal at the airport or taking a cab to your hotel, keeping in mind that carrying cash is the risky way to carry money. But technology always enables faster and user-friendly provisions to make our overseas travel delightful. Payments through wallets can also be made for cab rides abroad in Indian currency, Paytm wallets soon to enable the same for using Uber rides in foreign land. With Travellers' cheque, finding Money Changers and en-cashing it may create a lot of trouble and they are not even widely accepted. Using debit or credit cards when travelling abroad may get you into unnecessary interest rates, and with the currency fluctuations it can be a lot of extra money. Whereas prepaid travel cards saves from all that extra charges and gives a hassle free experience.

What if you transfer money to a wrong bank account?

Have you ever imagined what will happen if you by mistake transfer money to a wrong bank account? Will you be able to get it back? Does  the bank have the power to reverse the transaction? Well, banks cannot reverse it, unless they have an approval from the beneficiary. It is, therefore, important to be very alert while transferring money to a bank account.

Reasons which results wrong transactions:

• Due to human (typing a wrong account number) or technical errors
• Human errors due to discrepancies in the account number, IFSC code or both
• Technical glitches at the bank's end can also cause the error

Time for quick action: 

• Try to inform the bank and bank manager immediately after the wrong transaction
• Money will get back to your account automatically, if the account number you mentioned does not exists but in case the situation is opposite, you have to take immediate action
• Try to mail the matter in detail to the bank for the sake of better communication
• Bank can only act as a facilitator by providing you the contact number/branch name of the unintended beneficiary
• If the beneficiary is of other bank and you transferred amount by mistake, then you have to go personally to that particular branch and meet the bank manager to get the solution done.

What if the wrong beneficiary refuses to give the money back?

• You cannot take the money back without the wrong beneficiary's consent. The beneficiary has to accept that the wrong transaction is made but it's not that easy
• If he or she refuses to give your money back then you can do a legal case
• No recovery is possible is the beneficiary contests the reversal and refuses approval

Rules to follow:

• According to the RBI guidelines, it is the responsibility of the depositor to provide the correct account number and IFSC code
• Try to complain immediately to the concern bank for wrong transaction and reply the bank as quick as possible. At the end it's your hard-earned money, so be cautious when you transfer the money.

Surviving the fall

The changes in interest rates on small savings schemes,and what they signify for your investment portfolio. The interest rate landscape in India has seen some several developments since the start of this year. Interest rates on fixed deposits have been going down rapidly, but the major jolt has been the reduced rates on small savings schemes. Popular with retail investors, particularly retired individuals, they have been useful for meeting long-term needs. Given below are the changes that one should know about:

What's changed

• On March 18, the government announced interest rate cuts ranging from 60 to 130 basis points (bps) for small savings schemes, effective from April 1, 2016 The schemes include public provident fund (PPF), post office schemes, recurring and term deposits, Sukanya Samriddhi Yojana, Senior Citizen's Saving Scheme, KisanVikas Patra and national savings certificate.
• Starting this financial year, these rates will be revised every quarter. The current rate will be applicable till June 30.
• Other than this, the recent policy rate cut of 0.25 per cent to 6.5 per cent, its lowest in five years, will ensure that deposit rates head south.

What to do?

• Retirees who are not financially savvy and fall in the 10 per cent tax bracket can continue with traditional saving schemes.
• But individuals in the higher tax bracket should recalibrate their investment strategy, perhaps move away from tax inefficient and lower yielding fixed/recurring deposits to debt funds.
• Top rated debt funds have yielded over 9 per cent in a three-year time-frame, where returns post three years enjoy indexation benefits.
• Tax free bonds are another option for individuals falling in the 30 per cent tax bracket.
• For younger individuals especially parents with a girl child below 10 years, the Sukanya Samriddhi Yojana is still an attractive option, given the tax-free 8.6 per cent yield.
• For middle aged individuals, equity mutual fund are the best bet along with fixed income options mentioned above.

NPCI launches next gen online payments solution

NPCI today launched next generation online payments solution - Unified Payments Interface (UPI) which will leverage trends such as increasing smartphone adoption and deeper penetration of mobile data. UPI is a channel that powers multiple bank accounts into a single mobile application (of any bank) of a participating bank, merging several banking features, seamless fund routing and merchant payments into one hood. It will empower users to perform instant push and pull transactions and transform the way people make payments today.

MCLR: A touch of relief

A new lending rate methodology enables banks pass benefit instantly to borrowers. The norm so far has been that banks reduce lending rate after the Reserve Bank of India announces its monetary policy. It was different this time, as a few banks announced rate cuts even before the RBI had announced its monetary policy on April 5. This is because of the marginal cost of funds-based lending rate or MCLR, to which all new loans, sanctioned on or after April 1, 2016, will now be linked. It is a welcome move as the new interest rate calculation is expected to be more sensitive to policy changes. Under the earlier base rate method, despite the frequent rate cuts by the RBI, banks were unable to transmit the entire benefit to borrowers.

How is the new formula different?

• Earlier, banks used to calculate the base rate on the basis of the average cost of raising funds. MCLR is calculated on the basis of the marginal (incremental) cost of funds and tenure premium (it's higher for loan commitments with longer tenures).
• The actual lending rate is MCLR plus the spread, which banks will determine after factoring in their business strategy and the credit risk of the borrower.
• The RBI has asked banks to set at least five MCLR rates-overnight, one-month, three-month, six-month and a year.
• Several banks, such as SBI and ICICI, are calculating their lending rate on the MCLR for a year.

What should one do?

• MCLR rates are expected to be lower than the existing base rates for one year. In a falling interest rate scenario, experts say, the MCLR methodology will benefit borrowers as the reduction in repo rates will reflect in their interest rates.
• However, in an ascending interest rate scenario, the borrower will have to bear the pain of rising EMIs.

Wake up the sleepy A/C

Dormant accounts are vulnerable to fraud, close them if you don't need them, or get them reactivated Do you have more than two bank accounts but do not use them often? If yes, then you must ensure that you either reactivate or close the account. As per the Reserve Bank of India guidelines, any savings or current account which has seen no transactions for two years, will be deemed inoperative or dormant. Here are a few tips on how to reactivate your account.

RBI rules

• No activation charges for inactive or dormant account.
• Banks can't charge minimum balance penalty either on dormant or inoperative account.

Points to note

• No bank can classify an account dormant before 24 months of inactivity.
• The account will be treated as operative as long as dividend or FD income is credited into it.
• Account will be treated as inoperative only after two years from the date of the last credit entry of dividend or FD, provided there is no other customer-induced transaction.
• Dormant account reactivation procedures differ for each bank.
• To reduce risk of fraud, check your savings accounts from time to time.
• While filing returns, submit details of all your accounts, including dormant and inactive one