5 Things to Do to Safeguard the Future for Your Child

The best way to secure your child’s future is to arm them with quality education, which will give them the right tools to fend for themselves, with or without you. However, a recent article in The Economic Times stated, “Around 47 percent parents are concerned about the cost of higher education, given the inflation rates.” The rising cost of education is not something a parent can do much about, but there are ways to plan your finances so that you can arm your child with the best skills to create a secure future.

Planning for Your Child’s Future

1. Determine your child’s requirements
   The first step to securing the future for your child is to identify what all they will need in future. This includes not just the expense incurred as school fees, but also added costs, such as that of coaching, transportation, co-curricular activities and more. The cost of a child’s upbringing can take up almost 60% of your household budget. You may not be able to determine the exact figure, although if you track your expenses you can get an estimate that can help you determine the amount of savings that will be required to achieve your child’s goals.


2. Buy protection
   Investment alone might not be enough. This is where a child insurance plan can help, providing added financial security for your child in your absence. Getting high insurance coverage means that you will also need to pay higher premiums. Therefore, it is advisable to assess your child’s insurance needs before buying coverage, which you can do with an online insurance calculator. Along with a child plan, buying health insurance is also a wise step.


3. Plan early
   Starting to plan even before the birth of your child is not too early. When you start planning and investing early, your savings grow accordingly, even when it comes to a child insurance plan. A delay in the process of saving can cause financial restrictions, which will force you to overlook other financial benchmarks that are equally important.


4. Allocate assets
   Mutual funds, public provident funds, fixed deposits, equity, etc., can all play a supporting role at various stages in your child’s upbringing. To have the right combination of assets and manage them efficiently, asset allocation is an important step.


5. Prepare a will
   Merely nominating your child to inherit your assets makes him/her a custodian. Ensure that your child receives all that you want them to by writing a comprehensive will to prevent disputes in your absence.
   

Besides taking all these steps, it is also important to sit your child down and speak to them about the importance of saving and managing finances independently.

4 easiest investment options giving good results

People around every corner of the world have been looking to side a portion of their income after meeting all the expenses. But, merely saving money is not the end. One has to be specific in looking for a better investment option which can produce better returns on these savings. These little investments also generate in you, a habit to save money typically on the monthly or quarterly basis. While there are enormous fields where you can invest your money for short and long-term periods, look at some of the very interesting investments where you can easily make better money returns.

1. Bank deposits:

You can have a recurring bank deposit account where you will be required to corner a sum of money regularly on monthly basis, yearly, or quarterly as per your comfort. With every instalment that you pay, you attract a sum of interest to the money. At the maturity of your recurring account, you get back the initial investments made with a sum of interest which is generally lucrative. And when you own a handful amount of money, which you don’t have to take in use for a definite time period, you can invest the same in fixed deposit with the bank account. This is generally done for 3 years, 5 years, 10 years, and so on. At the end of the term, you receive a good proportion of interest with the money deposited for a fixed basis.

2. SIP:

A Systematic Investment Plan (SIP) is one of the easiest and most popular investments among the investors of all forms. A form of systematically investing in Mutual funds, this is setting aside a pre-determined sum of money at the end of every month or quarter to purchase the specific unit of a Mutual Fund. This involves the lowest possible risk from your level and you can attract a good sum of money back. This sort of investment is one of the most effective ways to meet your financial goals, like your children’s education, their marriage, or making plans for your retirement. This is also an essential form of investment, because this induces in a habit to save and make your living better.

3. Real Estate investment:

Real estate is one of the booming markets these days, as this is one of the handy and lucrative investment options. You have to invest a lump-sum amount of money in the real estate and with time, the property fetches you a better price when you look to sell. You can easily allocate your money in the manufacturing, commercial, hospitality, or housing sector. You just have to make sure you look for a better location where the prices of property tend to go up.

4. Mutual Funds on Ultra Short term basis:

You can invest money in a fixed deposit short term mutual fund which is generally 1 to 3 years. This is responsible for setting aside for you, an interest rate which is approximately 7 to 8.5% per annum. This is an alluring option which has sliding interest rate options.

Though the past portfolio is in no way responsible for the future benefits, you can still make a better investment, after reviewing the past record for whichever investment option you choose.

Make the most of your savings with IDFC's Fixed Deposit

IDFC Bank maximises the earning potential of that surplus fund of money lying in your home. Create a fixed deposit today to reap bumper returns for the future.

Fixed deposits have been most Indians’ go-to option for safe investment. Though the word ‘safe’ cannot be said in the same sentence as the word ‘investment’ in case of market-linked options, in terms of the fixed deposit it can be safely said that it is a reliable investment that never fails.

Since the interest rate on the fixed deposit account remains constant throughout the tenure of the deposit, it provides guaranteed growth that may be computed at the time of opening the account. What makes this investment a safe one is the fact that the interest rate is not affected by market fluctuations.

At the moment, some of the leading banks in the country offer about 6% interest rates on fixed deposits, while premier banking institutions like IDFC Bank offer higher rate of interest. IDFC Bank offers FD account rates at 7.5% for 366 days or 7.25% to 7.2% for tenures up to 10 years.

Opening a fixed deposit with IDFC Bank

Recently, the demonetisation initiative announced in November 2016 shook up the banking and lending systems of the country. After the initial chaos subsided, banks announced a drop in lending rates for home loans as also the interest on fixed deposit accounts. However, despite a drop in FD account rates, these deposits are still a very good investment option.

Demonetisation proved that storing excess money at home or in the office is not a viable practice any more. Besides, the country is slowly going cashless and hence, cash transactions are better kept to a minimum. In this scenario, any excess funds must either be deposited in the savings account, or in the FD account. The latter option is better for those looking for higher capital appreciation, since interest on fixed deposits is normally higher than that on savings bank accounts.

Besides, it is easy to open a fixed deposit account online, when you bank with IDFC Bank. This is how you do it:

• Deposit your surplus cash in the account, or divert your excess funds from savings to the fixed deposit account. Ascertain that the amount has been credited before you proceed.
• Now access IDFC Bank’s portal and click on ‘Fixed deposits’.
• A deposit account opening form will pop up on the screen. Fill in the information asked for.
• The bank now checks the details and when verified, approves the account opening. The bank emails your login credentials (Customer ID, Account number), IFSC code and other particulars.

You can now transfer money directly into the FD account. You can deposit money between Rs 10,000 and Rs 10,00,000 in the account from another savings bank account or from your IDFC bank account.

When NRIs wish to buy homes back home

A primer on how NRIs can apply for a home loan in India, and how to ensure a hassle-free application process.

Wherever a person may be in the world, there is just no place like home! This is particularly true of NRIs – they live abroad, earn handsome salaries and have a good life. But yet, the pull towards their motherland is strong, partly because they have family and friends in India. Besides, isn’t it true what they say about taking an Indian out of India, but India never leaving an Indian?

The most tenable connections that NRIs build with their homeland come via investments made in India. Chief among these are land and house purchase deals. Several NRIs invest in property in India every year, through a family member or a designated power of attorney. Recognising their interest in property purchase here, the RBI has also streamlined the home purchase process for NRI customers.

Today, banks and financial institutions offer customised home loan products aimed at NRIs’ home purchase. If you are looking for a suitable home loan, choosing the right lending institution is crucial. Look for –

• Easy application process – the lender must offer the opportunity to apply for the loan online.
• Quick and transparent processing – the lender must give a full schedule of processing charges upfront, and explain the processing timelines.
• Rapid turnaround time between application and approval – this is the amount of time that the housing finance company takes to check the property and applicant’s credentials.
• Fast loan amount disbursal – NRIs normally visit India for a short duration of time, so it is ideal if the loan disbursal is done as quickly as possible.

But first…

Checking the NRI home loan eligibility is the first step in the loan application process. You can fill out a simple form on the lending institution’s website and provide your contact details. This will initiate the loan application process.

Meanwhile, check the NRI home loan eligibility using the portal’s online calculator. The eligibility is computed subject to certain criteria, such as:

• Age
• Citizenship status
• Income
• Whether the applicant is working abroad for at least one year prior to applying for the home loan
• Whether the applicant is an Indian passport holder, showing NRI status on employment/assignment/deputation.

The NRI applicant can increase their home loan eligibility by adding a co-applicant or co-owner on the same property. However, this co-applicant or co-owner must have a regular income, and they can be a parent, sibling, spouse or adult child.

Once the application is approved, the loan is split into two parts: the NRI applicant’s personal contribution to the house purchase, i.e. up to 20% of the property value (as mentioned in the property agreement papers) plus the housing loan, which is up to 80% of the property value for loans amounting to Rs 75 lakh and below, or 75% of property value for loans exceeding Rs 75 lakh. 

5 elements to look for in a home loan

We present five loan features to understand and look out for when you apply for the housing loan.

Are you about to take a home loan for the first time? You must have many questions about the process and what to expect. Allow us to simplify the concept of the home loan by presenting the following five features of a home loan:

1. Loan eligibility. Start by finding your home loan eligibility. This is the amount of money that your bank will give you as the loan amount, based on certain factors: income, age, number of working years left, credit history, place of work, etc. When you input these figures in a home loan eligibility calculator, you get the loan amount that the bank will offer you. Knowing your eligibility helps you rejig your own finances, and also shortlist the properties that fit your budget.
2. Interest being charged. The bank housing loan is offered at a certain rate of interest. Post-demonetisation, banks lowered the lending rate on housing loans. Thus, bank housing loans are now offered at rate of 8.65% to 9% across major banks in the country. Examine the interest rates across different banks before making your choice. 
3. Type of interest being offered. The bank housing loan will be offered at either a fixed rate of interest, or a floating rate of interest. Under a fixed rate of interest, you will continue paying the same amount of EMI throughout the tenure of the loan. As opposed to this, you will pay the interest on the reducing principal as the loan is being repaid over the years. Most people opt for the floating rate of interest because it results in lower total repayment to the bank. 
4. The evaluation process. After you apply for the home loan, the bank examines your credentials, the property you wish to purchase and also the property document. This process may take a while to complete, since the checking is done on-site by legal and construction experts. If you are in a hurry to close a deal on a house, it is better to apply for the loan as soon as possible so that you can get the funds disbursed quickly. Premier banking institutions conduct these checks quickly so that customers are not hassled by delays.
5. Processing fees.These are fees that are paid towards getting the final disbursal. The fees include application processing fees, legal evaluation fees, stamp duty and registration charges (after paying at least 20% of the property’s price), pre-EMI cheque, etc. Get the entire spectrum of fees and charges and add them up before you apply for the bank housing loan.If you have a relationship with your bank, you can get some of the charges waived off.

Dreams can be achieved!

Nowadays, dreams regarding homes and own residences are quite natural but setting the goal of achieving them without any hazards has become one of the rarest things. But various renowned banks will help you realize your dreams more easily by facilitating home loans. Many think it impossible to get a home loan, and hence, dreams and desires regarding homes become quite difficult or almost unattainable. 

Premier Banks have been helping in the marketing and shaping of the global growth which in a way directs path for many new golden opportunities to increase or grow your wealth, without much complexity. The Auto Saver mechanism enables higher interest rates for all fixed deposits on the idle funds that you possess in your savings bank accounts. Also, home loans in India have become something of a moot point in recent times though several banks take all the steps to make it possible. Today, banks offer home loan solutions through online mechanisms and operations are pretty uncomplicated and seamless, to say the least. Your dreams will become a reality if you take assistance from banks that provide the best interest rates and other facilities to customers. 

Besides convenience various banks are focusing on paperless banking and the banking experience of the clients. All the processes to apply for becoming a customer are online and easy. 

The promise of your dream home has many factors which make it a bumpy ride – the spiraling real estate costs, lack of funds for down payment or the fat EMI that may incur. However, here you need to invest a little time in research and compare several banks and find out a true friend who helps to fulfill the home dream. For home loans in India, the home loans by various banks are created to offer the faster acquisition of the desired property. 

Purchasing a home can be a bit stressful. However, if are all prepared it can be a fun and exciting experience. Certainly, finding the right home loan is an important step in your endeavor. Let us have look at some tips that will help you turn your dream into reality.

• Start saving today for a down payment.  If you are ready with a large down payment, your burden will reduce automatically and you are more likely to find the best deal.
• Having a good credit score and credit history lets you get the best deal on your home loan.
• Get your documents ready to accelerate the application process.
• Use home loan calculators to find out how much home loan can you afford.
• Compare all the offers. Check every detail, differences in points, interest rate, fees, charges, etc. to find the best option.

You can be an investor, a first-time buyer or planning for an additional property; you will have an appropriate loan plan here. Banks have attractive rates of interest that suit your particular requirement along with repayment flexibility. You can simply pay the interest during the construction level, which saves your money in the initial stage, isn’t that great?