When you want to invest money in a fix deposit (FD), the first thing that comes in anyone’s mind is interest rate. But, you will always notice that smaller financial institutions usually provide higher interest rates higher interest rates on FDs than bigger banks. Following are the few reasons behind it:

Few popular Fixed Deposits

If you compare FD rates, the country’s largest lender, SBI gives 9% interest rates on FDs below Rs.1 crore of one-two year tenure. The second largest lender ICICI offers 8-9% on term deposits for similar tenure. Now, let us analyze what smaller banks have to offer. Laxmi Vilas Bank Ltd offers 9.75% on a fixed deposit of for a similar period, whereas City Union Bank Ltd earns you 9.50% for a similar period.

Why the difference?

Analysts argue that smaller banks find it difficult to source funds. An avenue to create a money market for them is expensive. On the other hand, larger financial institutions have a better command in market since they have better credit ratings. The cost of raising funds for them through short-term paper is difficult for them. Secondly, being smaller institutions they have smaller retail base. Therefore, they try to attract customer more.   

However, choosing a term deposit should not be based only on attractive interest rates. The banking services should be also looked when the investment is long-term specifically. So, if your financial institution is liquidated, you get your ensured amount. 

Read More

All of us spend more than half of our lives earning but in order to make your hard-earned money to work more effectively for you, one has to do financial planning. It starts with a review of your overall profile and planning your financial goals. These goals can include buying a house, saving a fixed amount of money for your child’s education or planning retirement.

The six steps which can help you in achieving your financial goals are namely, listing the financial requirements of future, setting life goals, examining your current financial status and planning a strategy to meet your financial goals.

Decide your financial goals

By viewing each financial decision as a part of your whole financial goal, you can consider its short-term and long-term effects on your life goals. As a result of this, you can also adapt more easily to sudden changes in life and feel more secure that your financial goals are on track.

Get a professional financial advice
The financial planners are not governed by the government. Instead, it regulates planners by the services they provide. For instance, a financial planner that provides insurance transactions is regulated in the form of an insurance agent. Many financial advisers like accountants and investment advisors can also offer the financial services. So, before getting a financial planning service, check if the advisor follows the six-step process mentioned earlier.

Commonly made mistakes in financial planning

The following are some of the common mistakes made by consumers in their approach towards Financial Planning.

• Not setting measurable goals.
• Confusing financial planning with investing.
• Not evaluating the financial plans periodically.
• Thinking that the financial plans are only for wealthy people.
• Expecting unrealistic returns on investment.

Hence, financial planning when done with an authorized financial planner protects you and your family from the financial uncertainties during the times of crisis. It can also help you to secure your present if you assess your current financial situation and plan your future accordingly.

Read More

After you have achieved your financial goals, the unpredictable circumstances such as illness, inflation and unanticipated expenses can decrease the value of your assets. The longer life expectancies and long periods of financial plans make it difficult for you secure even your assured amount. It’s important to think of wealth protection as an important part of financial planning.

Benefits from wealth preservation strategies

A good wealth protection plan in place will help you to prepare a strategy for protecting your assets from any potential damage. It also ensures you the peace of mind knowing that you have made provisions to protect your financial future. The most valuable benefits include:

• The financial future of your family is secure, including the value of your assets.
• You are financially prepared to deal with any sudden illness and financial needs for long-term care.
• The financial stress of your family will be reduced in case of an untimely death or an unpredictable unemployment.
• Your heirs can directly own the assets in case of a sudden demise.

Combine life insurance in your wealth protection plans
The overall wealth preservation strategy should also include life insurance. Along with life insurance, following financial protection plans, can protect the assets you've worked hard to build:

• Estate Planning: Ensures that your earnings are beneficial for you when you are alive and helps you to transfer it to your heirs after your death. 
• Insurance Investing:  Can help in planning your financial freedom in your retirement years.
• Life Insurance: Provides an effective financial cover for members of a family in case of a sudden death.
• Accident and sickness insurance: Prepares you for any accident, disability or critical illness.

Choose the solution that’s right for you

Choosing the financial protection that's right for your circumstances can be challenging. Always see the benefits that a wealth protection plan is giving you. The benefits should not only restrict to the returns after an accident, but it should also give you benefits during the tenure of a plan.  

Read More