5 tips to transfer money

1.How to transfer money

The online options include e-transfers and power transfer(a web-based wire transfer that eliminates errors associated with a normal wore transfer),while the most common offline modes are cheques and bank drafts. While there is a no single option that can be considered best, you should opt for a reputed player with established system in place so you can be assured of a safe transfer.
While opting for online options, be sure to ask your bank to list its correspondent banks. This becomes especially important if you are remitting money from abroad. Take a look at eh foreign banks your financial instruction has partnered with to make the money transfer smooth.For instance, Federal Bank has tied up with the Arab National Bank of Saudi Arabia and Doha Bank of Qatar. In addition, several Private Exchange Houses(PEHs) have come up in the Gulf region to facilitate remittances to India, and several Indian Banks have signed up rupee drawing arrangements with them.
On the other hand, when it come to sending money abroad, not all online option fit the bill due to RBI guidelines.For instance, the Money Transfer Service Scheme(MTSS) is limited to inward personal remittances(to India).
2.Speed of disbursement
If you are in a hurry to transfer money, your only viable option is an online one, Such as wire transfer and the National Electronic Fund Transfer(NEFT) system. This typically takes 24-96 hours, but can also take place in real time. For instance, you can instantly move money through ‘direct transfer to bank account’. This is operated through an arrangement with overseas correspondent banks or via the automated clearing house facility in countries such as the US.
Of course, the offline options take time. If a cheque is issued in a foreign currency, there can be a delay of 7-15 days before the holder can encase it as the bank needs to verify the deposit. Remittances made though money orders can take from three to 30 days, while transfers made through debit/credit cards are quicker, taking 1-4 days, Keep in mind that most banks and financial instructions do not remit money on public holidays.
3.Coverage offered
Not all money transfer options are available at every location. While you can avail of the offline rout at all bank branches, the online ones are mostly limited to urban areas. If you are remitting money from abroad, you will also have to check if the currency you want to transfer is covered by the bank;the US dollar, euro and pound sterling are generally remitted by all banks. However, remember that not all banks allow you to rout money through foreign currency cheques. A handy option for non-resident Indians is the foreign currency (Non-Residental)Account(Banks)Scheme. The currency in the account is denominated covers all freely convertible foreign currencies like the Australian dollar,Bahrain diner, Deutsche mark, euros, HK dollar, Japanese yen, Kuwaiti dinar, pounds sterling and the US dollar. This can be held jointly with relatives in India.
4.Cost of service
Before you choose a mode of transfer, consider the damage to your wallet. It’s an accepted fact that there is an inverse relationship between the speed of transfer and the associated cost, According to an RBI survey, SWIFT(an international wire transfer system) is costlier vis-a-vis draft and cheques. While the cost of sending up to $500 from the US to Indian through SWIFT is less than 1-5% of the funds transferred, the comparative rates for demands drafts/cheques is just 2% of the remitted amount. Money transfer services like western Union charges a higher commission, nearly 25-30% more than banks.This is because they offer more specialized services-neither the sender nor receiver needs to own a bank account, for one-and have a better reach. However, they don’t generally offer a competitive exchange rates,so rate shopping is a much before picking any option.Also check for hidden charges such as service tax.

It’s not just the speed and cost, but also convenience of transfer for both you and the recipient, that matter. If either party is not comfortable using the internet option, an offline route would be better. Another factor is the amount to be transferred. While there is no ceiling on demand draft(Cash perches are not permit for over 50,000), a cap of 5 lakh has been imposed by some bank on NEFT transactions, and $2,500(1.35lakh) is the maximum limit under the MTSS scheme. Also make sure you ask the service provider about its refund policy and your and your rights in case the money is not received within the specified period.

RGESS is an option best left untouched

Under the Rajiv Gandhi Equity Shaving Scheme (RGESS), anyone with an annual income of less than 10 lakh can invest up to 50,000 in blue-chip stocks and PSU shares, either directly or through mutual funds, and can claim deduction for 50% of this investment. This would be over and above the 1 lakh deduction under section 80C. While an additional tax deduction of up to 25,000 appears good, the real impact on your tax savings is not substantial. since it is only for incomes below 10 lakh, taxpayers in the 30% tax brackets are not eligible. So the maximum benefits a taxpayers in the 20% bracket can derive is 5,000. The saving are lower at 2,500 for those in the 10% tax slab. Besides, the scheme is restricted to first-time investors and there are no tax benefits in subsequent years.
Though stocks have the potential to create wealth like no other asset class in the long term, they also carry a higher risk. First-time investors should refrain from buying stocks directly, even if these are blue chips or PSU stocks. For conservative investors, who have stayed away from the market, it doesn’t make sense to enter now for a minor tax deduction. If they really want to enter the market, a better choice would be ELSS funds or ETFs. “The improving markets sentiment should be the main driver for new investors, not small tax benefits as the ones offered By RGESS,”.
There are problems even in the investment universe of the RGESS. It allows investment in the tops 100 listed stocks and top PSUs. Thought this restriction is to limit the risks,it also means that the investors, option are confined.

6 tax goof-ups to avoid

1.Not including all eligible deductions: Many taxpayers don’t know about all the possible options under Section 80C. Besides the investments, there are several expenses that are also eligible for deductions, Such as school fees of children, housing loan repayment and stamp duty and registration charges paid for a house. In fact, you could have already exhausted your 1 lakh limit and don’t need to make any further tax-shaving investments. Turn to page 16 to know how much more you need to put in tax-shaving investments this year.
2.Not availing of other tax deduction: Most taxpayers do not look beyond Sections 80C and 80D when they are ealculating their tax liability. If you or a dependent suffer from any of the 8-10 specified diseases or physical disability, you can claim a deduction of up to 60,000 under Section 80U, 80DD and 80DDB. The donations you make to specified charities are also eligible for deduction under Section 80G, while education loan interest is fully tax deductible under Section 80E.
3.Buying insurance to save tax: This is the most common tax folly that Indians make. Life insurance is absolutely and should be taken by everybody. However, the objective should be protecting your family’s financial future, not save a few thousand rupees in tax. See tax saving only as a discount on the premium, not as the purpose of buying insurance.When you buy life insurance, you enter a long-term recurring commitment. Getting out of it is a costly affair because you end up paying surrender charges. If you choose a traditional insurance plane, the high premium cloud prevent you from investing for other financial goals.
4.Not taking tax-ability into account: Each tax-saving investment gets a different tax treatment. The interest earned on the PPF is tax-free, but income from fixed deposits, NSCs and Senior Citizens’ Saving Scheme is fully taxable. This is why the 8.8% offered by the PPF is a better option than the 9% received from an annuity plan is taxable. Keep in mind the tax-ability of income when you invest in a tax-saving option.
5.investing lump sum in equity: This usually happens if the taxpayer compresses his entire year’s tax planning into the last few days of the financial year. If you invest a large sum in an ELSS fund at one go, you are taking a big risk. Similarly, investing a lump sum in the equity option of a Ulip may be a bad idea. Equity investments should be staggered across the year so that you are not caught the wrong foot.
6.Ignoring the lock-in period: All Section 80C investments come with a lock in period, ranging from three years for ELSS and extending till retirement for the NPS. Be sure to match the lock in period with your requirement before you make the investment. Also, do a bit of research before you invest. The PPF, for instance, has a 15-year lock in term, but this progressively come down over the years. In the 14th year, the lock-in period is only one year. Besides, you can make partial withdraws after five years.

How to be Richer in 2013

If only financial plans were more like Bollywood potboilers,where the protagonist scampers past losing situations, stumps all odds,and steams through to a happy ending.Off screen,however,the best laid plan are invariably subverted by reality the stock market dips,inflation surges, economies collapse,and so do your finances.It’s to avoid such morbid endings that advisers like ET Wealth come into the picture.We help our investors pen scripts that may not give them the high of being invincible heroes,but guide and prepare them in a way that can set their finances soaring.
While there’s no time like the present to being shoring up your finances,a year tender makes for a poignant starting point.It’s that magical period when hope straddles the happy cusp of the past and the future,and wields its wondrous wand to turn remorse into resolve,losses into learning’s.It’s the sanguine phase when you are eager to shed your failures and chisel out a spiffier financial scrape for yourself.As we ready to harness this hope and tell you how to make the most of 2013,remember that the action plan needs to be rooted in the  lessons of the past year and expectations in the one ahead.
Much like every year,2012 held out crucial pointers,which can be extrapolated to formulate the right strategies.The year told us that though the global markets have not quite righted them selves,India may have started on its path to recovery,and hence,it may not be the right time to quit equity.It spoke of a shaky industry,wherein blue chips too made for a risky investment,but also pushed up sectors that could withstand the economic rumble and made for good picks.It warned of a recalcitrant inflation,which did not allow interest rates to be trimmed,and thought they may not relent this year as well,even a marginal fall cloud augur well for home loan takers.It revealed the vulnerability of the rupee and the resilience of gold;how these would impact your export or travel plans,and your asset allocation.
In the following pages,we shall treat these lessons as starting to be lay out a financial blueprint for the coming years.We shall tell you how to reap the best interest rates on your deposits,where to invest for the highest growth,which pension plan to opt for to secure your retirement,how to optimize your spending by checking out the best cars and gadgets lined up for 2013,and how to make the most of your travels.We shall also list out some financial resolution that demand to be incorporated in your plan 2013.We hope our special year-tender package nudges your into the New Year with vital information and verve essential to make your richer.
In keeping with the festive cheer ,we have reserved the best for the last,To retain your financial fervour and stretch your horizons in synch with the changing times, we plan to upgrade ET Wealth in 2013.So, over the next few months,we shall introduce new sections and columns across the personal finance spectrum.These stories shall not only be more incisive and evolved,but also serve your financial interests keenly.We hope you,our readers,continue to encourage us with your feedback so that we can script a longer, stronger association with you.The only happy endings we are looking at involve your finances.