Everything To Know About Banking
Banking in the 21st century means being able to conduct all transactions digitally without needing to physically visit a branch location. Deposits, withdrawals, payments, and transfers can be conducted online or by phone app as well as applications for credit cards and loans.
Fixed Deposits, commonly known as FDs, are a popular form of investment in the world of finance. They are offered by banks and financial institutions, providing a safe and secure way to save money. When you open an FD account, you deposit a lump sum amount for a fixed tenure, typically ranging from a few months to several years. In return, the bank pays you a predetermined rate of interest at regular intervals, usually monthly or quarterly. At the end of the tenure, you receive your initial deposit along with the accumulated interest. FDs are considered a low-risk investment, making them an ideal choice for individuals who want to grow their savings steadily while preserving their principal amount.
FD (Fixed Deposits)
Corporate FD
Corporate Fixed Deposits, often referred to as CFDs, are a variation of traditional FDs. However, instead of banks, they are offered by non-banking financial companies (NBFCs) or corporate entities. CFDs typically provide higher interest rates compared to regular FDs, which makes them attractive to investors seeking better returns. These deposits come with various tenure options, allowing investors to choose one that aligns with their financial goals. However, it’s important to note that CFDs carry a higher credit risk compared to bank FDs, as they are not backed by government insurance.
Savings Schemes are government-backed financial programs designed to promote long-term savings and offer various tax benefits to investors. They provide a secure and guaranteed way to grow your savings. Here are a few popular savings schemes:
Public Provident Fund (PPF)
PPF is a government-backed savings scheme with a tax-free interest rate. It has a lock-in period of 15 years, making it a suitable choice for long-term financial planning. Contributions made to PPF accounts are eligible for deductions under Section 80C of the Income Tax Act.
National Savings Certificates (NSC)
NSCs are low-risk savings instruments. They come with a fixed interest rate and a lock-in period. NSC investments are also eligible for tax benefits under Section 80C.
Savings Schemes
Overdraft (OD)
An Overdraft, abbreviated as OD, is a financial arrangement that allows individuals or businesses to withdraw more money from their bank account than what is available. It serves as a short-term financial lifeline for those facing temporary cash flow issues. Interest is charged only on the amount used in the overdraft, which makes it a flexible and cost-effective solution for managing cash flow.
Credit Cards, often abbreviated as CC, are convenient financial tools that have transformed the way people conduct financial transactions. They offer the flexibility to make purchases both online and offline. Credit cards come in various types:
Standard Credit Cards
These are basic credit cards with a predetermined credit limit.
Rewards Credit Cards
Rewards credit cards allow you to earn cashback, points, or miles for every purchase you make, providing additional benefits for regular spending.
Travel Credit Cards
Ideal for frequent travelers, travel credit cards offer various travel-related rewards and benefits.
