September 30, 2022

Why do you need Term Insurance if you are Self Employed?

Feb 25, 2022

As a breadwinner of a family, it is your responsibility to take care of the finances of your loved ones. In your presence, your earnings will meet the monetary needs of your family. However, it is important to have a financial safety net that keeps your family secured in your absence.

As a self-employed individual, your earnings depend on your business. No matter how big your turnover is, it is important to have a financial backup that will help your family in your absence. A term plan is a great option to go about it. What is a term plan? Term insurance is a life insurance policy that provides coverage for a defined period. In case of your demise during the time frame of your policy, the insurance company provides a pay-out to your nominee.

Here are some reasons why term insurance is the perfect fit for a self-employed individual –

Affordability

One of the biggest reasons several individuals choose term insurance plans is their affordability. Term insurance provides life cover of a huge sum at affordable premiums. As a self-employed individual, there is no fixed source of income. A low amount of premium ensures that, in the ups and downs of your business, you can easily pay the premiums for your policy. Look for term plan premium calculators that help you estimate the premiums that you will have to pay for different covers.

Lack of insurance from an employer

When you are working a 9 to 5 job, the company usually provides benefits like employee provident fund, life insurance, and medical cover. Being a self-employed individual, you will have to provide these benefits to yourself. Investing money for your future and safeguarding your family’s financial needs in your absence is your responsibility. When you are fulfilling your financial goals, a term policy can help provide the much-needed life cover.

Huge coverage compared to traditional insurance

Compared to other types of life insurances, a term insurance policy provides a higher sum assured. Term insurance will ensure that you leave enough funds with your family and dependents in your absence. It will ensure that they do not face any financial hardships and have enough money for any expenses in the future. A sufficient cover will also ensure that your debts do not burden your family in your absence.

Tax benefits

The primary benefit of purchasing a term policy is to secure the future of your family in your absence. One additional perk is that it helps in saving taxes too. A term insurance policy provides tax relief under section 80C of the Income Tax Act. The term insurance premium that you pay is deducted from your taxable income.

Coverage against critical illness and disabilities

Apart from life cover, there are riders available which you can club to your existing term insurance. These riders offer benefits like critical illness cover, disability covers, and waiver. As these conditions are unpredictable and devastating to you and your family, it would be a relief to receive a sum from the insurance company on the basis of the riders selected.

How to buy term insurance?

The reasons mentioned above make term insurance policies quite popular, especially amongst self-employed individuals. You can purchase term insurance online as well as offline. There are official websites of insurance companies where you can buy a term plan quickly in a few easy steps. There are also insurance aggregators available online where you can compare the insurance policies of different companies to choose the best one. The online term plan premium calculators allow you to know the amount of your premium. If applying online feels difficult, you can buy the policy plan offline. You can simply visit the nearest branch of an insurance company and present the documents needed to buy your policy. Brokers and agents can also get the work done for you.

As a self-employed individual, choose an insurance company that is well-reputed and has goodwill. This will ensure that in your absence, your loved ones receive the sum assured with no hassle. A good term plan ensures that you and your dependents live a peaceful life.

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A guide on how to open a current account for your business

Feb 22, 2022

A current account is a banking account meant for businesses as opposed to a savings account, which is mostly used by individuals for their banking needs. A current account offers businesses lucrative deals and helps them to facilitate their financial transactions with great ease. It is ideal for higher number of transactions and can also be customized as per your specific requirements. There are varied benefits and value-based services associated with a current account. What’s more is that you can also avail various schemes based on your bank for your current account, wherein you can choose superior offerings by the banks instead of a normal current account.

The best part of opening a current account in recent times is the fact that you do not have to visit the bank at all! You can simply get it done through your mobile phone or a computer. Are you interested in opening a current account for your business but do not know where to start from? Do not worry and follow this step-by-step guide below to know how to open current account online.

Know your eligibility: The first step to opening a current account is to know your eligibility. If you are worried about your eligibility, then here’s good news for you. Most banks have very minimal eligibility criteria to open this account. You can check these criteria by visiting your nearest branch or simply on the online site of your bank that you are interested in opening an account in.

Keep your documents ready: Refer to the list of the documents that are necessary by your bank to open a current account with them. This list may differ slightly in case of KYC compliance (if you are already a customer with this bank and are compliant with the KYC norms, then this list of documents may differ). This is a crucial step and it will save your time if you confirm this list, collect all documents and only then proceed.

A few documents that you may require are:

  • Pan card of the proprietor/company
  • Proof of the business
  • Certificate of Incorporation, MOA, etc.
  • License proof, etc.
  • Address proof

This is not an exhaustive list. Please refer the list provided by your respective bank. The documents may also vary based on the type of company or business that you have.

Fill up the account opening form: You can now proceed and fill up this form. It will be available online. If you are opening offline, then you can obtain this from your bank. It is imperative that you fill all the necessary details correctly.  Once you fill all the details, you will have to attach the required documents wherever applicable. Lastly, submit the form.

Confirmation: Once you submit the account opening form, then you can wait for your bank to reach out to you once your account has been opened.

The above method is helpful for opening any basic current account. You can open one in quicky, simple steps and enjoy a host of services offered to your business. Your bank may further also have specialized options and variants for your current account which you may choose based on your needs, i.e., type of current account. Based on this current account type, your monthly average balance, cash deposit and withdrawal limits may vary.

Now that you know all about opening a current account for your business, what are you waiting for? Open one while sitting at home and start reaping the benefits of the many online banking facilities for your current account.

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Top 5 Government Backed Schemes To Back Your Finances

Feb 15, 2022

Introduction:

We plan for expenses and investments based on our current income profiles. However, emergency expenses are unplanned, and it triggers a personal loan.

Personal loan interest rates differ as per the credit profile of individuals, and so does the personal loan eligibility criterion.

However, a few government schemes may help you with urgent needs. To enable individuals to take care of their personal needs and to inculcate the habit of savings, many schemes are introduced by the Government.

Most of the schemes are long term and allow people to enjoy the taxation benefits (in the old scheme of income tax) under Chapter VI-A of the Income Tax Act, 1961.

  • Public Provident Fund (PPF):

The old-age famous investment scheme is still one of the best government schemes offered by the Government of India. Due to the long term nature of the investment, it is also considered a retirement scheme. Interest rate is a factor for risk-free nominal return, credit risk and liquidity risk. In PPF, there is no credit risk & liquidity risk.

The good part of the PPF investment scheme is that the amount invested, the interest income earned, and the amount withdrawn will never get taxed. The current interest rate is 7.1% per annum – investments up to Rs. 1,50,000 are available as deduction under section 80C of the Income Tax Act, 1961. The holding period is 15 years.

However, premature withdrawals are allowed after five years. The amount is locked in for the said period, and this is where the compounding of return comes into play. However, the interest rate is revised every quarter. The minimum deposit amount starts with Rs. 500 and one can invest up to Rs. 1.5 lakhs.

  • National Savings Certificate (NSC):

NSC is introduced with the intent to teach savings amongst individuals. The intention is not to build a retirement corpus. The minimum investment amount starts with Rs. 100 with no limit on the amount of savings, and it reflects the savings intent of the Government.

However, the maximum deduction to be claimed for taxation benefits is limited up to Rs. 1.5 lakhs. The present rate of interest is 6.8% per annum with annual compounding. The interest is accrued annually, but it can be withdrawn at the time of maturity. The frequency of change in the rate of interest is annual. Kindly note that NSC is made only for residents in India.

  • National Pension Scheme (NPS):

With the scheme’s name, the Government intends the public to plan for your retirement right when you are earning enough – gone are those days when people used to plan their retirement after their 40s. With the increase in per-capita income and increase in earning avenues, individuals are planning their retirement immediately after having a secured source of earnings in their 30s.

This scheme is applicable for the citizens of India, with mandatory applicability to government employees. Thus, you can observe a deduction from the monthly salary income of government employees. The age limit for investment is from 18 to 60 years.

The best thing about NPS is that it provides flexibility to allocate funds in bonds, equity and government securities. However, the amount invested up to Rs. 150,000 is available as deduction under section 80C and a further Rs. 50,000 is available as deduction under section 80 CCD(1B).

  • Sukanya Samriddhi Yojana (SSY):

With the Beti Bachao, Beti Padhao Yojana of the Government of India led by Prime Minister Mr Narendra Modi, the Government also ensured that the future of the daughters of India is secured. This scheme was launched in 2015 to teach goal-based savings.

The focus of the scheme is the welfare of the minor girl child. The account has to be opened mandatorily in the name of the girl child. The entry age into this scheme is from her birth until 10 years. The maturity period is 21 years, with an interest rate of 7.6% per annum. 

  • The Senior Citizens Saving Scheme:

When it comes to regular income with high safety, the senior citizen savings scheme ranks first in the queue. It is applicable for individuals above the age of 60 years. The interest rate is 7.4% per annum, a little higher than the fixed deposit interest rates. The maturity period is five years with an extendible period of 3 years. The minimum deposit amount is Rs. 1000.

Further investments can be made in multiples of Rs. 1000 but not exceeding Rs. 15 lacs. It can be operated through a Joint account as well. You may choose to close the account after one year. However, premature charges of 1.5% are levied. You may choose to close the account after two years, with early charges levied at 1%.

Conclusion:

It’s never too late to start with your investment journey with the best in class government-backed schemes.

So the best time to start investing is today.

However, when it comes to emergency needs, personal loan are the easiest and quickest source of money. You can check your monthly outgo with a personal loan EMI calculator.

For more information, please visit our website.

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