UPI & USSD: 2 Cheapest Money Transfer Options in India

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Post demonetization, there has been a tremendous increase in usage of digital payments in the market. This gave rise to new payment options in addition to the existing ones. However this resulted in confusion for the Indian consumer who were largely dependent on cash transaction in pre-demonetisation era. Apart from cash, the other widely used money transfer options were NEFT, RTGS, IMPS, UPI, e-wallets such as Paytm, Freecharge and others.

So let’s understand which money transfer option should be used when the amount is small or big. We’ll consider two examples – transfer of Rs. 10, 000 and Rs. 2, 00, 000 (2 Lacs).

Irrespective of the amount to be transferred, a person should keep three things in mind before finalizing the option.

These are as follows:

  1. Time – Required to transfer the money i.e. speed.
  2. Amount – The quantum of money to be transferred.
  3. Cost – The cost incurred in carrying out the transaction.

For transferring Rs. 10, 000; UPI app is the best option as it does not involve any cost and money transfer happens instantly. Although mobile wallets such as Paytm and Freecharge also works on the same logic. However there are two fundamental differences. In case of wallets, user has to first transfer money from his/her bank account to the wallet and then from wallet to other person. But in case of UPI where money is directly transferred from bank account to the recipient’s bank account.

Read 28 differences between UPI & other payment methods.

Second difference where UPI scores over e-wallet is interest received on the money kept in the bank account. In case of UPI, since the money is in your bank account, the account holder receives periodic interest. This is not available in case of wallets. So interest earned is a very important point to be taken into consideration.

NEFT and RTGS are very commonly used options used by many individuals. However NEFT carries a minimum transaction cost of Rs. 2.5 whereas RTGS has a transfer cost of minimum Rs. 30.

So which is the cheapest fund transfers option amongst the all?

Unified Payment Interface is the clear winner in this case due to free transfer cost. However there is a per day transfer limit of Rs. 1, 00, 000 (1 Lac) in case of UPI. But if you want to transfer funds higher than Rs. 1, 00,000, then feasible option would be NEFT which carries a very small transaction charge.

USSD – Mobile banking with no internet connection & no transaction cost

All the above mentioned funds transfer options requires internet connection and smart phone. But there is one option requiring no internet & smart phone – which is Unstructured Supplementary Service Data (USSD) or *99#. And this technology was especially introduced to remove constraint of internet and smartphone. And target audience for this were the people from rural areas where internet connection is poor or not available, and smartphones are not much used. Because of this electronic transfer was not possible for people living in remote part of country.

USSD option was created by National Payments Corporation of India (NPCI). Through USSD, individual can transfer Rs. 5, 000 per transaction.

So, currently in Indian market “UPI & USSD” are the most viable payment methods as they do not have any transaction charges.

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Personal Loan for Senior Citizens from 11 Banks, Loan against Securities

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Post retirement or when retirement is nearing the fear of managing cash flow during sunset year starts. Many people believe that the money accumulated during their working life is sufficient. However it is a mistake. What such individuals don’t consider is the inflation, rising healthcare costs, increasing life span and at the same time protect dependents.

So in case of emergency when own savings is not sufficient to fulfill the need, the option remains is the personal loan. However getting personal loan for senior or retired individual is not easy as it is for a working professional. Let’s understand the reasons behind this.

Personal loan approval is dependent on four most important factors which are as follows:

  • Income
  • CIBIL score
  • Age
  • Loan amount

Other factors also play a major role but above mentioned factors holds most importance.

A regular income earner has higher chance of meeting these eligibility criteria. However for a senior or retired individual (with no income or pension), the chances of loan approval are very less as they don’t have an income post retirement. Age factor is also one of the reason for rejection, as most of the banks normally provide loan to individuals with maximum age of 60 years.

Read more on 7 best jobs to earn money after retirement.

So under such conditions, how can senior citizens get personal loan in India so that need of money can be met especially during emergencies?

There are many options available in the market for senior people to avail loan as shown in the table below:

Public/Private Sector BankCo-operative BanksAgainst Shares/LIC Policy
State Bank of IndiaAryapuram BankAditya Birla Finance
Syndicate BankCalicut city service co-operative bankAxis Bank
Allahabad BankAkola Janta Co-operative bankIDBI Bank
Bank of IndiaLIC Housing Finance
Dena BankICICI Bank
Andhra Bank
Bank of Baroda

Few details on getting loan from above entities:

State Bank of India: SBI offers loans to pensioners of central and state government with age limit set to 72 years with a loan amount of Rs. 14, 00,000 (14 Lakhs). However in this case the repayment tenure is small.

Allahabad Bank: Age of the pensioner should not exceed 73 years

Bank of India: BoI offers loans to pensioners with age less than 75 years.

IDBI Bank: Offers reverse mortgage loan for citizens above the age of 60 years.

Dena Bank: For pensioners with age not exceeding 73 years and 80 years.

Andhra Bank: Offers personal loans to individuals drawing pension in the branch.

Bank of Baroda: For individuals with age not exceeding 65 years.

Syndicate Bank: For pension account holder with the bank and age not exceeding 70 years.

Check out retirement investment tips.

Co-operative banks:

Many co-operative banks also offer loan to senior citizens. Few of them are:

  • Aryapuram Bank
  • Calicut city service co-operative bank
  • Akola Janta co-operative bank

Personal loan against shares:

This is offered by many public and private sector banks in India such as HDFC bank, Axis bank, ICICI bank, and many others. Individuals including senior person can pledge shares from any depository with the bank and get finance. So there is a good chance to monetize assets.

Also see home loan for retired.

Against LIC policy:

Similar to loans against shares, many credit lenders also offer loans against money back or endowment life policies. Senior citizens can avail loan by pledging their policies. Few lenders are Aditya Birla Finance, Axis Bank, LIC housing finance, IDBI Bank.

Private lenders:

There are many private money lenders offering finance at high interest rate compared to banks. However you should be careful as it is an unregulated lending market even though getting a loan is hassle free and quick process. Private financiers should be the lost option.

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Discounts, High Interest, Schemes for Senior Citizens in India

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When someone retires especially private salaried individuals with no pension as a backup, the most worrying factor is sudden stop of monthly income. With no monthly salary, there is always a tension on how to manage funds during medical emergency, meet day to day expenses, and many others.

However to protect the life of seniors during the old age; Indian government and few private bankers & companies offer special discounts/offers or run various schemes especially for seniors typically in the age bracket of 60 years and above.

In this article we’ll explore important benefits or discounts for seniors in India:

Income tax: Let’s start with income tax, which is a certain pre-fixed percentage of income paid by every earning person (depending on the income slab) in India to the government. Depending on the income earned, individuals are offered tax benefits which are better than normal individuals. Shown in the table below is the income tax for seniors:

Annual Income SlabIncome Tax
Upto Rs. 3 LakhsNo Tax
Rs. 3 Lakhs to 5 Lakhs5%
Rs. 5 Lakhs to 10 Lakhs20%
Rs. 10 Lakhs & above30%

Railway Ticket: Male senior citizens get 40% and women get 50% concession on all classes for passengers of Indian Railway. However remember that, misuse of this quote or concession by mentioning incorrect age, will result in traveler being considered as non-ticket traveler and will be charged accordingly.

Flight ticket: Few airlines offer discounts to seniors aged between 55 to 65 years. For e.g. Air India offers 50% discount on economy “M” RBD basic fare to individuals who’ve crossed 63 years as on the travel date. Indigo, GoAir & SpiceJet, offers 8% discount on basic fare.

Check out how to earn money after retirement.

Assured pension: For the coming financial year 2017-2018, government of India has approved pension scheme – Varishtha Pension Bima Yojana 2017. Under this scheme, individual would be offered 8% guaranteed pension for 10 years. Applicant will have 4 options to choose pension which can be as follows:

  • Every month
  • Every quarter
  • Half yearly
  • Annually

Investment of up to Rs. 7.5 Lakh is possible in this scheme.

26 authentic ways to earn extra income in India from home.

Higher interest on SCSS: Most of the Indian banks offer special discounts to senior citizens holding savings account with them in the form of higher interest rates. These rates are slightly higher than the ones offered to other account holders. Listed below in the table are the rates offered by various banks:

Name of BankInterest Rate per Annum
State Bank of India9.3%
ICICI Bank8.5%
HDFC Bank8.6%
Canara Bank9.2%
Bank of Baroda8.5%
Andhra Bank8.5%
Bank of India9.3%
Allahabad Bank9.2%
Punjab National Bank8.5%
Corporation Bank9.2%

Higher interest on Fixed Deposit: In comparison to FD rates offered to individuals not falling under the category of seniors, banks offer interest rate which is higher than 0.5% over and above normal rate. Here’s the table showing leading banks and rates offer to the seniors:

Name of BankFD Interest Rate
State Bank of India7%
ICICI Bank7%
HDFC Bank7%
State Bank of Mysore7%
Indian Bank6.5%
YES Bank7.6%
Punjab National Bank7.4%
Karnataka Bank7.65%
Kotak Mahindra 6.6%

Senior Privilege Savings Account: Axis bank has launched this product especially for individuals with age 60 years and above. The benefits offered under the account are:

  • 25% discount on safe deposit locker
  • 50% off on diagnosts tests done at pre-fixed 200 centers
  • Up to 15% discount on purchasing medicines at Apollo pharmacies in over 1400 locations
  • 0.5% preferential rate on FD/RD account

OLA Cab: Recently cab aggregator OLA announced special offers for senior people residing in Pune with an additional discount of 50% on 10 rides every month. Although this discount was only till 28th Feb 2017, a 30% discount was also announced in January 2017. So stay updated on any new offers for seniors on OLA

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Earn Money from Google, Microsoft, Amazon, eBay, Walmart

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Everyone wants to earn money online as an alternate income source. There are many ways to generate revenue on the internet. However do you know that world’s biggest companies offer exciting opportunities to earn money online?

We’ll discuss about earning opportunities offered by Google, eBay, Amazon, Microsoft & Walmart.

Google: Let’s start with the big daddy – Google. Everyone dreams of working in this most innovative company in the world. However very few talented people get into it. But working in Google by getting a job is one way to earn money (i.e. salary) from this biggest company. However Google also offers ways to earn money online for individuals, even if you are not working for them. And this is possible through their revenue platform called Adsense. And you can do this through website, app and youtube channel.

Here’s how you can generate online income through Google:

Website: The process is simpler. You build a website by adding adding high quality and useful content and increase website visitors. And apply for adsense. Once your application is approved, advertisements served by Google will be displayed on your website. And when your website visitors start clicking on these ads, you will get small percentage of the revenue.

Check out 26 ways to earn extra income in India.

Mobile app: Similar to website, you can also add ads ad on your app called as in-app advertising. Although developing own app and adding ads is technical stuff but it’s not difficult. But on the other hand, the rising smartphone usage definitely has a great potential to generate revenue from mobile applications.

Youtube channel: This again requires greater efforts compared to website. You will first need create your own youtube channel with high quality videos and increase viewership base. Once your adsense account gets approved, ads would start displaying on your videos and every click generated on the ad, will earn you money.

Through Google, you will be paid either through CPM (cost per thousand impressions) or CPC (cost per click). Ads are served on your website/app which has potential to generate higher revenue.


Another way to generate revenue is to start affiliate marketing. World’s biggest ecommerce company – Amazon (although it is no longer into only eCommerce) offers one of the best option to earn money online by empowering the website. Amazon’s affiliate marketing platform lets website owners monetize their website. You place amazon ads on your site and whenever visitor clicks on the ad, he/she will be redirected to Amazon site. And if this leads to a product purchase, certain commission would be paid to the website owner. The commission varies depending on the product / its category. So higher the products sold through your web property, higher would be the revenue.

Microsoft: Another affiliate program is from the world’s biggest software company – Microsoft. The company lists range of products to be sold via affiliate program such as – softwares, Xbox, music download and many others.

eBay: Similar to Amazon, eBay also offers affiliate program. It works on similar line to Amazon and requires promoting eBay (banner or link) on the website, email, SMS, social media or others.

Walmart: Another biggest retail giant in the world – Walmart also offers affiliate program. After Amazon, Walmart offers most professional program and gives multiple products

All the above listed companies offering affiliate programs provide professionally designed banners and textual links linked to almost any product on their respective website. The commission offered varies according to the product.

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26 Ways to Earn Extra Income in India from Home – Most Authenticated

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Whether you are rich person or earning less, there are often ways to earn more money provided you are ready to put-in hard work, patience and work smart. However not everyone is aware of how to generate extra income. This guide is for those individuals who are not aware of earning money from home in addition to their regular job. You can also make full time earning from these avenues.

All the listed ways are 100% authenticate, provided you put in HARD WORK. Afterall there are no shortcuts to success.

  1. Uber and Ola: If you own a car or have free time, then working for Uber or Ola cab service can create an excellent source of alternate income. You must have seen Uber’s advertisement on hoarding – Har Mahinee Kamaiyee Rs. 1, 00,000* se jyada (Earn Over Rs. 100000 every month).

Ofcourse there are terms and conditions involved in earning such a big amount of money. But car owners in their free time especially on weekends become drivers and earn money. Their thinking is straight forward – My life, my way. If you do not have time, then hire trusted drivers and lend your car and earn fraction amount of money. In this case, part of the money is paid to the driver and certain percentage will be earned by you. Big advantage of this option is that, you can put your car to use everyday. Let’s say you travel to your office by car. So instead of leaving car into the parking the whole day, you can ask a trusted driver  to use your car by partnering with Uber or Ola during the day.

2) Provide online training: God has gifted everyone with a unique quality. However very few utilize it to the fullest and earn extra income out of it. Let’s suppose you are a graphic designer and working in a company with 5 day job. However you can leverage your skill further and provide training to aspirants worldwide through online training platform like Udemy. You can create training videos for any category such as software programming web development, music and many others. Here’s a snapshot from Udemy website showing the income earned by few trainers.Udemy - Make Money Online

You can upload your training videos once and start earning money by enrolling students seeking graphic design training. There are millions of individuals across the world looking for such online training. So if you sell your course for $100 and 50 students enroll for the class, then your total income will be $5000 (i.e. over INR 3, 00,000). More the number of students enrolling in your class, higher would be the additional income.

3) Offer in-house tutoring: Taking above example of Udemy forward. You can provide weekend training at the comfort of your home. Especially office goers or those who work full time will love to join your class, as they get time mostly on weekends.

4) Publish videos on Youtube: If you create your own video tutorials, then youtube can become excellent income source sitting at home. For this, you need to create own channel on youtube and apply for adsense, which is a Google’s monetization product. Once adsense ads start showing up on your Youtube videos and viewers click on these ads, you will make money for each ad click. It works on a very simple rule – greater the quality of videos, more would be the viewership and higher would be the chance of ad getting clicked and hence more money.

5) Equity Investments: Everyone must have read or listened to videos, and articles scattered over newspaper, magazines, internet & others, that investing in equities has given highest return amongst all investment avenues in India. You can at the comfort of home start investing in quality stocks and make good income. There are numerous training videos or articles available on the internet offering tips on earning money by investing in the stock market. Just googl it. However there are basic rules when you enter into the stock market – invest for long term, in fundamentall strong companies, keep patience and you will become an equity rockstar. If you think, knowledge and time are barring you from making money, then take advice of stock advisors or invest in mutual fund. Another option is to trade in foreign currency i.e. forex.

6) Blogging: Similar to youtube videos, you can create blog and start writing high quality content and apply for adsense. Once you start building website visitors and they start clicking on ads, you will earn money on each ad clicked.

7) Freelance: Every skill has a value (small or big) in the market and it’s upto you to make maximum out of it. You can offer your skill in the company you work and in return get salary. Or work for multiple companies and earn money from each of them. And internet makes this possible as it offers everyone to monetize their skill. And one such widely used model to earn extra income is freelancing. World’s most renowned companies – freelancer.com and elance.com (there are many others offering this service), let you earn money. Here’s a snapshot showing Freelancer - Income Potentialhow much you can earn from each project. The costing varies depending on the project and its scale.

It works like this – company posts project on this website, interested individuals will apply to work on the project, company will go through the applicant’s profile and select individuals based on their criteria and assign the project to work. Once the project is over, individual is paid the money. Payouts can be on an hourly basis, between the projects depending on the terms.

8) Affiliate marketing: Apart from generating revenue through adsense, you can also generate revenue through your website by applying for affiliate program offered by the world’s most renowned companies like Flipkart and Amazon. For every sale happening from these company’s ads displayed on your website, you earn a certain commission which typically ranges from 10%-20% of the product price. Commission percentage varies for each product or category. E.g. if someone buys television worth Rs. 50,000 by clicking on ad on your website and the commission on that product is let’s say 20%, then Amazon will pay Rs. 10, 000 to you. So if you sell even 5 television in a month, then your affiliate income would Rs. 50, 000.

9) Rummy Circle: Ever saw these advertisements from Rummy Circle offering play & win daily cash prizes?Rummy Circle - Earn Money

You must have played rummy with physical cards. But now this most loved card game has gone digital. Just visit rummycircle.com and register or download their app and apply your card skills to beat the opponent and win money. Also it is a 100% legal site where you can play 24*7. Few other popular sites are ace2three, junglerummy.

But rummy circle is the most secured and authentic platform to either play for fun or make cash. Although it’s kind of a gamble, so if rummy doesn’t suits you, other options to generate income mentioned in this article will be helpful.

10) Online Paid Surveys: There are many online websites which lets registered users to earn money by participating in online surveys run by various companies. Few legit survey sites in India are Swagbucks, Viewfruit panel India, Paidview point India and Opinion World India. However one thing to remember is to be genuine when participating in the survey. In case of any incorrect information, your account may get blocked and hence stopping all the future income. So be authentic. Also be careful from survey companies asking for money to enter into the survey. Never pay anyone through any means – cash, online transfer, investment or any other. Just say NO to such companies. Every company before launching any product or modify any existing offering does thorough market research. And these surveys lets users do such surveys.

11) Refer and earn: Many companies especially those who do business through mobile app such as Paytm, Lenskart, Snapdeal, Flipkart and many others lets you refer friends/families and earn cashbacks or reward points. So this seems to be a very easy way to earn extra income with little efforts involved. Infact, many flight booking companies such as MakeMyTrip, ClearTrip also offers its app users to refer and earn points which are redeemable to earn free air tickets.

12) App install: Apps like mcent, ladooo, appmoney offer free recharge for mobile, DTH, DataCard, cashbacks, referral rewards; when other company apps are installed through their app.

13) Create a valuable digital product: It takes years of hardwork to launch a successful online business. Take example of Paytm, Flipkart, Facebook and many others. They worked on a concept which helped people across the world in some way or the other. It takes one small business idea to make it big.

14) Sell used stuff online: When was the last time you took out time to check unused stuffs lying inside the house for over months or years. Ebay or amazon, olx etc. offers exciting opportunity to make money out of unused stuffs by selling them online. Although price is low depending on the age, quality of the product. But it makes sense to make money by selling almost any stuff online instead of keeping the mess at your home. Refer how individuals have put used stuff online for selling:OLX - Sell Used Products Online

You can sell almost every product from mobile phone, TV, furniture etc. and you will find buyer as well. Afterall everyone today wants to save money in every possible way as long as product offering is of quality and genuine.

15) User experience testing (Get paid to review): In this digital age, brands want to present best customer experience through their digital channels. Since everything is online, even a small poor experience on website/app can lead to a customer loss. That’s when user experience testing service comes into picture. Such service companies employ real users from different parts of the world to test their digital touch points. And by doing so, they get understanding of the problems faced by the users which helps them in improving their product. So companies such as usertesting.com, trymyui.com, usertest.io and others pay individuals to test other company’s website or app. Task is very simple and requires to test pre-defined items. Usertesting.com pays $10 for every 20 minute video completed by the reviewer.

16) Creche: Urbanisation is leading to another problem especially amongst working couples who do not have time to take care of their child due to busy schedules. They have to sacrifice certain things for better future. This offers an exciting opportunity to earn extra income by running crèche service i.e. place where childrens are given caring service during the day time.

In cities like Mumbai, crèche owners charge Rs. 10, 000 per child. So imagine, if you are ready to care even 10 children then your income would be close to Rs. 1, 00,000. Deducting expenses such as maid, food etc. will earn you nearly Rs. 75, 000. This is a significant income especially in metro cities like Mumbai, Bengaluru, New Delhi and others.

17) Direct marketing: You must have heard or watched commercials of brands such as Amway, Tupperware and Herbalife and others. These companies allow you to become business owners and sell their products through networking. This kind of marketing is also called as network marketing. More you work hard selling products and increasing the network, higher would be the income earned. The biggest advantage is that you don’t have to shell out penny to create a product. Every month you can invite your friends/relatives to your house and sell the products. You can even send the products to the buyers via courier service.

18) Publish book and earn royalty: If you have a good knack of writing then launching your own book and publishing it, can earn you royalty which is typically 5%-7.5% in India. So, if you sell 50000 copies @ Rs. 100 each. Then you will get Rs. 3.75 Lakhs. If you deduct other expenses incurred such as PR or marketing, renting on shelf of a book store, etc. then actual earned income would be between 2.75 Lakhs to 3 Lakhs.

19) Sell books online: Book readers are always on a look out for books at a cheaper price. And at the same time, they want to sell their books and earn cash. There are many online marketplaces offering service to turn books into cash such as studentdesk.com, swapthebook.com, bookmybook, Amazon used book store, and many others. So why to sell book at raddiwali at a low price?

20) Cashbacks: Many credit card and wallet companies offer cashback when you purchase certain products online. Cashbacks are offered on payment of electricity bills, buying movie tickets, ordering food, mobile recharge and many others. Basically the concept is very straight forward, to earn cash you have to spend money.

21) Sell photographs, images, footage online: Ever imagined that one nicely clicked photograph/video can earn you money? Check this snap:Most expensive photographs

Visit shutterstock, fotolia and put your clicked photos for selling. There are lots of companies looking for innovative and fresh photos and ready to pay good bucks for the best one. So grab your camera and start clicking.

22) Sell art online: This one is especially for the artists. If you have any excellent artwork ready then upload it for selling on mojarto.com.  Check out one of the listing taken from Mojarto website. Sell art onlineInterested buyers located within India and internationally are always on a look out for great artworks. You can sell any kind of artwork such as digital art, drawing, painting, serigraph etc.

There are many other online marketplaces for selling art and earning money like Amazon, artfire, artsy, ebay and many others.

23) Build app: This one is for technical person. Similar to building website, you can develop at your own app and earn money through in-app purchases, third party advertisements, and start making income out of it.

24) Hobby: Ever imagined, you can make money out of your hobby. Many hobbyists having special currency notes such as misprinted notes, antique notes or coins, 786 series, etc. can make money by selling. You won’t believe there are enthusiasts across the world who are ready to buy such stuffs. Check out a listing on ebay.in: ebay - sell currency note

25) Buy Domain: Can you imagine domains i.e. name of the website has its own price. Let’s have a look lasvegas.com (sold at $90, 000,000), insurance.com (sold for $35.6 million), internet.com (sold at $18 million), privatejet.com (sold at $30.18 million) and many others. Trick is to buy such a domain which is a very famous name, service, etc. and put it for auctioning. There are lots of companies/individuals looking to buy ideal website address for their company or service or investing. It is similar to real estate investment wherein you invest in an excellent property and wait for someone to buy at a higher price. Also the buying price of a domain is very small and searching for a relevant domain is tough. Some domains costs just Rs. 600 (less than $20/year). You can buy domain names via websites such as godaddy.com, bigrock.in, googledomains and many others.

26) Tiffin service: With rising urbanisation more and more people are migrating to tier-I & tier-II cities. The biggest problem however remains is the quality of food eaten by many apart from accomodation. But if you can offer healthy and tasty food at the doorstep of these individuals then you have excellent chance to strike a gold. So starting a catering or food service especially to office goers will create an additional source of income for you. And as long you provide high quality service, the returns from this source will make your wallets fatter. Homecooked food will always be loved by anyone especially migrants who eat unhygienic food at the roadside, restaurants, or junk food served by brands such as McDonalds, KFC & others.

If you are doing any other activity sitting at home then mention the same in the comment section below. It will surely help Indians located at remotest places to make extra income.

Additional authenticate income will never harm you especially in this current world of uncertainty and expensive. And working harder & smarter with a hunger for success is the only key to earn money. And last but not the least always remember – there is no free money in this world.

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Self Employed Loan Rejection: 7 Most Common Reasons

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Salaried individuals are always liked by financial institutions. Because when they offer any credit to this category of individuals the repayment is expected to be done – fully and on time and risks involved are less.

However there is another category of individuals – self employed who have equal rights to get credit but are most often denied. Even if their earnings are higher than salaried individuals, getting loan approval is difficult because of following reasons:

Risk: Not all businesses will continue to remain in profit all the time. There would be times when business may drop impacting the revenue. In such cases, repayment of loans often becomes difficult for the borrower. So basically, risk is a crucial factor which banks assesses before approving any loan application. Although banks take into consideration long duration financials for tracking business performance, a frequent loss creates doubt to the bank. Afterall if such an individual or business turns out to be a non-performing entity then losses would be high, impacting the profitability of the bank.

Income: Since ups and downs are part of business cycle, the current account held by the owner may not have sufficient balance all the time. Also there is a possibility that transaction history of such account may not be at its best. Also many customers still prefer paying in cash rather than online transfer/cheque/demand draft. So such transactions do not make entry into the account as mentioning the source of income cannot be considered as a valid proof.

Read more on personal loan for self employed.

Multiple business owners: In case of a partnership firm, the chances of loan approval are further grim. This mostly happens when one of the partner has poor credit score impacting the credibility of the other partner.

Business address: It is quite common that in the initial phase of the business, individual starts working from home and mentions his/her personal address as business address. This is disliked by the creditors as they generally offer loans to well established or with location operating from a commercial space. Although this ideally is the last factor taken into consideration.

Check out details on getting credit card for self employed.

Income tax: Typically banks asks for last two years income tax to judge the risks. However if the business is newly started then providing the income tax related documents is impossible. In such cases, banks will scrutinize the application more minutely. If business is running into losses, then banks will review IT returns of couple of more years.

Documentation: For self employed individuals documents required for loan application is little different and includes business continuity proof, last 6 months bank statement, income tax return of last 2 years, certified financials. All these documents may not be available with everyone especially when the business is newly started. So it takes personal visit to the bank to support your loan application.

CIBIL score: The most important decisive factor taken into consideration by financial institution is the CIBIL score. A poor score has higher chances of credit denial whether the applicant is self employed or salaried. However in case of self employed especially those who freshly start a business and has no CIBIL score the possibility of getting a loan is low. This is because, lenders have no way to judge the credit worthiness of the applicant.

Other options for self employed to get loan:

Even if banks reject personal loan application, it’s not the end of the world. There are other options available in the market to get loan which includes:

  1. Co-operative banks: Compared to commercial banks, co-operative banks do not have strict guidelines and have easier terms and conditions. Although the quantum of money granted is less. But on the other hand the interest rates are better. Another benefit is that processing fees or prepayment penalty is NIL or very less.
  2. Peer to peer lenders: Short termed as P2PL, this is a fairly new concept in India. Read more on P2PL here. The benefits offered are attractive rates, faster processing, speedy disbursal and easy application process.
  3. Local financiers: Borrowing money from these private financiers should be your last option as the interest rates are very high. Although they do not check CIBIL score and have very simple eligibility criteria.
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8 ways demonetised notes were used to launder money

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Not later than hour after Prime Minister announced demonetisation of Rs. 500 & Rs. 1000 notes on November 08, 2016; an illicit business of converting these two currencies into jewelleries gold, diamonds & silver, forex had started. And this business started spreading across India.

Let’s check out the ways money laundering business rapidly started spreading:

Foreign exchange: Individuals who’d good amount of black money, converted crores of demonetised notes into forex especially USD. This is due to the fact that dollar is the most sought currency across the world including India. A dollar typically costs around Rs. 120 – Rs. 140 in old demonetised notes.

Hawala: Black money stashers made hawala their favorite money transfer option. People started sending their black money abroad through hawala dealers also called as agents. These middleman charge a very high premium to park the money in foreign currency in Arab and South Asian countries which mainly includes Dubai, Singapore and Malaysia. Hawala has traditionally considered to be a channel to transfer funds.

Bullion: One of the most easiest and convenient option used to launder money was the bullion. From the night on which currency ban was announced, people started investing unaccounted wealth in buying bullion, jewelry and diamonds. Other options were buying expensive luxury stuffs such as watches, etc.

Read more on effects of currency ban

Petrol pumps: Since they were allowed to accept old currency notes till 24th November, several petrol pump owners across the country assisted in cleaning the black money by accepting old notes but in return of smaller sum.

Hospitals: Surprisingly hospitals were also involved in laundering black money by accepting demonetized currency notes.

Check out positive impact on Indian economy due to demonetisation.

Nepal – Bhutan: Since Indian government allowed old notes can be exchanged in these countries, individuals created opportunity to park their money via smuggling to these countries. Since border vigilance is poor in these two countries, transfer of money seemed very effortless.

Tribal areas: This includes Northeast areas such as Nagaland, Manipur and Arunachal Pradesh since they are tax exempted. No transaction related questions are generally asked in these places. So disposing of cash took place through this channel as well.

Jan Dhan Account: Started in the year 2014 for poor people by making one bank account for each family in India, rich people made poor people become rich for a while by depositing banned currency notes in JDY account holder. So accounts which are ideally dormant started seeing lakhs of rupees. Income tax department is now going to scan every such suspicious account.

So post the currency ban, the most critical question still remains unanswered – Will the poor get poorer and the rich richer post demonetisation? Please spare some time and share your valuable thoughts in the comments section below.

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Return of Premium Term Insurance Plan: Features, Benefits, Cons

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There are many policy holders who look for returns when they invest money in insurance policy.

Term insurance which covers life and offers GUARANTEED death benefit to the beneficiary of the policy holder is largely opted by individuals especially tax payers in India. The top most reason is the low premium compared to other types of life insurance policies available in the market.

Term plan also has a sub-type called as return of premium (ROP) term insurance plan. This type of term plan returns the premium paid, if the insured person survives full policy term. The reason to launch such kind of policy is to make life insurance affordable to everyone.

Read about the differences between term & life insurance.

Benefits & Features of term insurance plan with return of premium:

  • As the name indicates, the premium paid till the policy term is returned to the insured at the time of maturity. In comparison, standard plan does not offer guaranteed maturity sum assured. So basically ROP term insurance offers twin advantage – maturity + death benefit. Both these options eventually helps in securing financial future of the policy holder and the dependents. However return amount varies for each insurer. Check the return amount and associated terms and conditions before buying such policy.
  • There is an option for continuing the policy, if insured person does not pay premium after three successful year premium payment.
  • TROP offers higher sum assured.
  • Insured person also gets option to choose the term for which he/she needs protection for by paying premiums for a limited period.
  • Multiple payment options – monthly, quarterly and annually. This gives flexibility especially to self earning or business people with irregular income. Also individuals earning low income can benefit from this payout option.
  • TROP also offers policy surrendering feature.
  • Paid up value option is also offered wherein if the insured person is unable to pay premium, the policy will continue to be in-force. However in such cases coverage offered is low.

Check out 6 types of life insurance in India.

Inbuilt cover or riders:

Such return of premium term plan also offers following riders or has inbuilt cover for:

  • Accidental death or disability
  • Critical illness
  • Hospital daily cash
  • Premium paid and returns are tax free under section 80C of income tax act.

Disadvantages of TROP:

  • Higher premium
  • Reduced sum assured to the nominee in an event of death of the policy holder.
  • Short term pay option i.e. policy term is between 20 – 25 years
  • Cover offered is for a period of less than 25 year only.
  • Surrender value is low and varies depending on the payment option used. For policy holders opting for annual payouts, this amount will be higher than the ones opting for others.

Who offers such money back term plan in India?

ROP plans are offered by many life insurance companies in India. Few of them are:

  1. Max Life Insurance
  2. HDFC Life
  3. LIC’s Jeevan Mangal
  4. PNB Metlife
  5. Aegon Religare
  6. Birla Sunlife
  7. ICICI Prudential
  8. Bajaj Allianz
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ELSS Vs. PPF, NSC, Tax Saving FD – Differences

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Every year tax planning season begins in January-March. It is the time of the year when investors put their hard earned in investment instruments to save taxes. However many individuals make a mistake of keeping their objective to just save taxes and end up investing in products that do not generate enough wealth in the long run. This usually happens when financial goals are not set.

For those who want to save taxes and at the same time create wealth there are multiple options available in the market. And ELSS is one excellent product which stands out in comparison to other tax savers.

Here’s the table showing comparison of traditional tax saving instruments with ELSS on the basis of following key parameters:

  • Tenure of the product
  • Minimum investment amount
  • Risk involved
  • Most importantly the potential returns
Investment ProductLock-in Period (in Years)Returns CAGR per annumTax Status of ReturnsRiskPartial Withdrawal
Public Provident Fund150.081Tax FreeZeroPossible
National Savings Certificate50.081TaxableZeroNot Possible
5-Year tax saving bank deposit50.07TaxableZeroNot Possible
Equity Linked Savings Scheme319.68**Tax FreeHighNot Possible

The above returns from ELSS are as on November 2016.

The only risks associated with ELSS are:

  • Since the investments are market linked, the risks are higher as returns are not guaranteed. So past performance may not continue in the future. However it depends on the fund invested in. Check out zero risk investment options in India.
  • It carries a lock-in period of 3 years, so there is no way out to exit i.e. withdraw money from the fund if losses are predictable. Although the lock-in period is lowest amongst other tax saving investment products.
  • The diversification offered by these funds is across sectors and market capitalization. This allows your hard earned invested money to greatly benefit from the stock markets in terms of returns.

In addition to the above comparison table, ELSS offers multiple advantages over other tax savings instruments as follows:

Free insurance cover: Many ELSS funds free life cover to the investors. The premium cost is bourne by the MF company. And in the event of death of the investor, the insurance cover is used to pay the SIP amount.

Read about benefits of ELSS.

No cap on investment amount: Unlike few other tax saving instruments there is no limit on the maximum amount that can be invested in ELSS.

Ease of performance tracking: Every month the AMC releases the fund performance. So investor can track the minute details of how their hard earned money is invested and the returns generated at a regular interval. This helps investors to regularly track the list and type of stocks their money is invested in, sectors, and exposure in debt and cash.

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Tax Payers Love these 10 Benefits of ELSS – Returns, Lock-In, Tax Free & more

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In India, there are bunch of financial instruments in which money can be parked to claim tax deductions under section of 80C of the Income tax act. Although the advantages of investing for a long term cannot be emphasized more, there is an investment gem for tax payers – Equity Linked Savings Scheme – ELSS.

ELSS stands out in comparison to other tax saving instruments and is recommended for everyone. As the name suggests, ELSS is the only tax saving option with significant equity exposure.

So what are the benefits of ELSS funds?

Let’s get to know:

Highest Returns: ELSS is one of the very few investment products promises to beat the inflation, when invested in funds with a proven track record. Few of the top CRISIL ranked funds which has given highest returns are:

Name of Fund1 Year (% Return)2 Year (% Return)3 Year (% Return)CRISIL Ranking as on Dec-2016
(Source: CRISIL Website)
DSP Black Rock Tax Saver Fund (G)36.211.926.61
Birla Sun Life Tax Plan (G)
Birla SL Tax Relief 96 (G)22.17.725.52
Kotak Tax Saver - Regular (G)32.9825.62
L&T Tax Advantage (G)31.99.623.32
Sundaram Tax Saver (G)35.49.723.83
Reliance Tax Saver (ELSS) (G)31.74.5303
Franklin India Tax Shield (G)22.86.8243
Axis Long Term Equity Fund (G)

The 3 year return on all ELSS ranges from 23% to 26.5% as on 10th Feb 2017.

This clearly proves that even the average performing equity linked savings scheme fund has tremendous potential to grow your wealth which is higher than any of the guaranteed return tax saving options available in the market.  Check out zero risk investments in India.

Over years equity as an asset class has proven to be beat the inflation.

Dual benefits – tax saving and grow money: ELSS is an open ended equity mutual fund offering twin advantages – saving tax and long term wealth creation.

Shortest lock-in period: ELSS has a lock-in period of 3 years, which is lowest in comparison to other tax savings instruments.

Fundamentally, this 3 year period has advantage to the involved entities i.e. investor and fund manager. Both of them have necessary time to counter market volatility by assessing the risk. Since ELSS invests most of the corpus in equities, the investor has an edge to generate higher returns. And this benefit has been proven to beat inflation as shown in the above table. Note that 3 years starts from the day respective units are allotted and not from the day you start making investment.

So if anyone is planning for retirement or create wealth for child’s education 3 years ahead, then ELSS is worth recommended.

Read about high risk – high return investments in India.

Tax Saving: Investments made through ELSS funds qualify for tax deduction under section 80C of income tax act. At the highest tax bracket, Rs. 46,350 can be saved when investor plans to maximize the section 80C benefit.

Multiple funds to choose from: There are multiple ELSS funds available in the market. So investor gets multiple funds to compare and invest.

Ease of investment: Investor gets two options to invest in ELSS – lumpsum or SIP. Although lumpsum is not recommended as there is no option for purchase cost averaging and beat volatility. However SIP mode i.e. at a regular interval helps in disciplined investment approach. And most importantly risk can be tackled as you can stop yourself from entering into the downward moving market at the wrong time.

100% tax free returns: There are many tax free investment products whose returns are taxable. But this is not the case with ELSS, as the dividends and long term capital gain is completely tax free.

Free insurance cover: Many mutual funds companies have been recently launching schemes offering free life insurance cover with no additional cost. Premium is bourne by the MF company. The cover normally a certain % of the SIP account. In an event of demise of the investor, the insurance cover shall be used to pay the SIP amount. However there is a cap on insurance cover which is less than 20 lacs. Although small, insurance linked funds are worth to look at, if you do not have insurance policy.

No cap on investment amount: You can invest in ELSS through lump sum or SIP returns. And there is no ceiling on the upper limit on the investment amount. It basically means that an individual can invest beyond the Rs. 1, 50,000 limit.

Ease of performance tracking: Every month the AMC releases the portfolio in which the fund has invested. This helps investors to regularly track the list and type of stocks their money is invested in, sectors, and exposure in debt and cash.

Although appetite risk is a crucial factor separating ELSS investors. According to Association of Mutual Funds on India (AMFI), MF industry has been adding average 6.19 lacs SIP accounts each month; which is a huge number making ELSS a definite addition into the investors kitty.

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