After a prolonged wait of over 9 months, RBI has reduced the Repo and Cash Reserve Ratio (CRR) by 25 basis points. This move has taken by RBI to maintain the economic growth by infusing more money into the banking system. Repo rate is the interest rate at which RBI lending to the banks. Cash Reserver Ratio (CRR) is the rate at which banks has to maintain the balance with RBI. By reducing the CRR, it is almost Rs. 18000 crore is infused the banking system. Which enables the banks to give more loans to the industry and stimulate the growth.

One of the worrying factor to reduce the interest rates is the country’s inflation. If the more money is pumped into the system, the inflation would shoot up again. That is the reason RBI did not reduce the rates for the last nine months and now the current inflation looks under control. The cut in the repo rate, at which RBI lends short-term funds to banks, and CRR, the portion of deposits banks need to park with RBI, will immediately translate to cheaper lending rates for borrowers as banks are gearing up for rate cuts.

also read:

• Home Loans Interest Rates Update (Jan / 2013)
• Canara bank increases fixed deposit rates by 1%
• Rupee value, recession, europe problem and global issues coverage

The current Repo rate is 7.75% and the CRR at 4%. Resulting of this rate cut, most likely the lending rates will be reduced by the banks. Firstly the would start cutting their base rates for loans. IDBI bank has already cut the base lending rate by 0.25% to 10.25%. The last time when RBI cuts the repo rate was April 2012 by 50 basis points. In the last one year, RBI has cut the rates by four times to infuse the liquidity into system.

Most investors feels that another rate cut is likely by March 2013 if the inflation is further fall down. As next monetary policy review is happening on March 19, 2013. However, this move would further reduce the loan rates to the consumers, it will stimulate the growth on home loans and would improve the real estate companies profits. If you have any questions on the policy rates, please post it in the comments section. If you are interested in receiving the future articles on investment, please subscribe here.

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In the last week, I have posted an article about the home loans interest rates and I have pointed out the reason why the home loans interest rates would go down in the near term. I expected that this would possible go down only when RBI is reducing the key interest rates related to the monetary policies. But, in the last week two banks has reduced the interest rates without waiting for the RBI’s action. It clearly shows that the banks are stepped into the action of reducing the interest rates. In the coming weeks, we can see the other banks to reduce the interest rates.

Central Bank of India has reduce the home loans rates by 0.25% to 10.75% for the loan tenure of 25 years and under Rs. 30 lacs. In the same way, Bank of Maharashtra (BoM) has reduce the home loans rates by 0.25% to 10.60% for the loan tenure of 5 years and under Rs. 25 lacs. 2011 is very difficult year for the banks. The credit growth has fallen down because of the high interest rates.

also read:

• Home Loans and Income Tax Benefits
• Joint Home Loans Tax Benefits
• Learn about Home Loans
• Mantri Alphyne in Bangalore

When it comes to buying the homes, please read the following points which would be more useful for you.

1. There won’t be any hike in the interest rates in coming months. The current rate on home loans are the highest and can not go further. It will hurt the country’s economic growth which is already impacted by the rates hike.
2. If you are looking to buy a new house, this would be the right time. Please get the loan in the floating rates if you would repay within ten years of time.
3. If the interest are going down, the home sales would increase. Then there is a chance for the builders to increase the prices of the property.
4. Up and Down of the interest rates are normal and it is part of the cyclic nature of the interest rates. So, don’t blindly plan if the rates are down or high for the short term basis. If you are taking a loan for more than 10 years, this up and down will not affect much on your loan amount.
5. Wait for the budget till next month if you want to know more about the tax rebate. There are rumors that tax exemption for the home loans would be increased.

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Last year has been not very good year for the home buyers. Because of the high interest rates for the home loans and high inflation rates. It is negatively impacted the real estate companies with less sales compere to the previous years. It is not only that home loans interest rates are high, all the loans become expensive because of the RBI’s monetary policy to tighten the cash liquidity in the market.

It is good news that RBI may reverse its stance on the monetary policy to increase the liquidity. This would result in the relaxation on interest rates pressure.  This article explores the reason why interest rates increased and how it will come down in the near future?. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

Why interest rates are increased by the banks?

If the banks don’t have the enough money to lend for its customers then they have to raise money from the public by the way of increasing the fixed deposit interest rates. When banks increasing the interest rates for deposits, the loans have to be more than deposit’s interest rates to be profitable. You may ask the question why suddenly banks become poor and don’t have enough money?. If the cash availability is more in the market, then it leads to the more consumption in the market it leads to the increase in prices. The the inflation will shoot up to the higher level.

• What is inflation?

If inflation is high, it will impact the common man’s daily needs. Govt. has to act and reduce the inflation rates. The only way (not exactly but our govt. think so) to contain the inflation raise is to tighten the monetary policy and reduce the cash liquidity in the market. If you want to understand more on how RBI can tighten the cash flow, please read the following article.

• Why interest rates on loans are increased by the banks?

Current Situation of the market

The current situation of the market is that inflation has come down (RBI thinks like that) and it is time to reduce the tightening of the cash liquidity. The news coming from the higher authority is that in the next meeting RBI would announce the decrease in the key policy rates. If that would happen, slowly banks will start reducing the interest rates in the coming months. In the past one year, RBI has increase the key policy rates for more than 12 times. It is the first time that RBI has increased such a more number of times.

If the inflation is in control for several months, the decrease in the policy rates will continue and the home loans interest rates would come down. But, one thing is that there won’t be any increase in the interest rates because it is already in the peak. We can expect the interest rates to come in the near future.

Summary

If you are planning to buy a house and apply for the home loans, please keep this in mind. It is good news for the home buyers and the builders. We can expect some good news from the market in 2012. Hope that the inflation level is under control so that the interest rates would not go up once again with in a year. This is a cycle and it can not be avoided. Hope this article is useful for you. If you have any doubts, please post it in the comments section.

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In my earlier posts I have informed the readers that the deregulation of the savings banks account is in the progress. The intention of setting the savings bank interest rates by the banks itself would intensify the competition among the banks and the interest rates would go up. It will be beneficial to the customers. In this article I will write about the prior changes on the interest rates and what is the current situation after the changes announced by RBI. Subscribe to our future articles here.

• How to better utilze the savings bank account?
• Savings Bank Account interest rates derugulation:RBI
• What is auto-sweep facility in savings bank account?
• Banks to give more interest on Savings Bank accounts

History of Savings Bank Interest Rates

• Prior to this change, banks must pay the 4.0% interest for all their savings bank customers. This is same for all the banks. It means that interest rates for the savings bank accounts are regulated by the Reserve Bank of India (RBI) and banks must follow that. This change happened only less than a year.
• The interest rate for the savings bank account was 3.5% for long time and recently only it has been increased to the 4.0%. Also, there was changes in the how the interest rates are calculated. First 10 days of the balance will not be taken for the calculation, also in the remaining days only the minimum balance will be taken for the interest rates calculation. This would result in very less benefit to the customers.
• Prior to making 4.0%, RBI has changed to the daily balance calculation for interest rates of 3.5%.

Deregulation of interest rates

• Effective 25 October, RBI has explicitly sent notification to the banks for changing their savings bank interest rates. Simply, banks are free t0 set their interest rates for their customers. Till now they are compulsory to pay 4.0%.
• The RBI has told banks to pay a uniform rate to all customers having savings account balance of up to Rs 1 lakh. For balances above Rs 1 lakh, banks are free to choose interest rate bands.
• This would benefit the salary bank account holders who maintain the lump sum amount in the saving bank account.

Updated interest rates by banks

However, not all the banks would increase the interest rates immediately. India’s largest bank State bank of India (SBI) has announced that they would not revise the interest rates immediately and it would affect the profitability of the bank. The following are the few banks that has revised the interest rates:

Kodak Mahindra Bank, Yes Bank and IndusInd Bank has set the interest rates as 6% per annum for balances above R1 lakh and 5.5% for deposits less than Rs 1 lakh.

Summary

It is good move by RBI to benefit the customers. Another problem would arise is, banks would start feeling the more expenses and would increase the fees for other services. As per the record, thousands of crores are lying on the savings bank account, now banks has to pay the extra interest for that money. It would result in the more expenses for the bank. However, it is good for the customers to choose the bank which is offering the good interest rates.

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It is once again, the key rates are increased by the Reserve Bank of India (RBI). This move gave the shocking wave in the market today (sensex down 350 points). It is unexpected move which was expected by the analysts as probably 25 points or there won’t be any changes. But, RBI has hiked the key policy rates repo and reverse repo by 50 points which would trouble the banks to reduce liquidity.

The reason behind the hike is to contain the inflation and reduce the liquidity in the market. But, as we already known the impact would very much negative. It is not going to control the inflation, do you think just increasing the key rates would stop the inflation?.

In the calendar year 2011, it is the fifth hike. The following is the list of rate hikes in the past:

This would affect the home loans and other loan products would become more costlier. Banks will be under pressure to manage the cash efficiently because the borrowing would be expensive.

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Home Loans interest rates are shooting up to the top. RBI has increased its important rates several time within last year. It results in all the banks increasing the home loans interest rates sharply and making the big hole on house owners budget. That too who bought the house within past five years would have been very tough situation to adjust the increase in the interest rates. In this article I will write few tips which will be useful for the house owners to tackle the situation and save the money. If you have any ideas, please post it in the comments section.

Rise in Home Loans Interest Rates

It is difficult to digest that within last one year banks has increased interest rates of the home loans up to 2%. If it is only for the last year, think about the house owners who bought the house in the last 4-5 years time using the floating point method. They are paying the interest rates 5-6% more than what they bought at the beginning. It is not the small change, very difficult to manage by any middle class family person. It is the main reason why the housing default (not able to repay the loan and will be bad debt) will increase.

Read: More about Home Loans

Banks use very attracting interest rates at the beginning to lure the customers. Teaser home loans are one example for that. In the teaser home loans, the interest rates for the first two years will be very less, after that it will adjust with the market rates.

How it will impact?

Below table gives you the picture of difference in 3% interest rates increase.  It makes difference Rs. 197070 more to be paid as the interest. You have to plan how this amount would be paid, whether you have enough capacity to increase the EMI amount?

The following sections will explain how to manage this situation.

Increase the Loan Duration

This method is applicable only for those who can not afford paying the extra EMI (What is EMI?)  amount. For example, if Mr. X is paying the EMI of Rs.30000 p.m towards the home loans. If he has to increase his EMI to Rs. 35000 p.m. to adjust the interest rates hike, then if he can not afford the extra amount, he has to increase the tenure to few years and continue pay the same EMI amount.

Disadvantage on this solution is that you will be paying more interest amount. That will be loss for you.

Increase the EMI

If you feel that you have more capacity to increase the EMI amount, then it would be good idea. That too when situation like this, it is better to increase the EMI to your maximum capacity and try to close the home loans at the earliest. It will reduce the amount you have paid as the interest.

Prepay the Principal amount

It is the best idea to close the loan very soon. When you are paying the part of principal amount, there may be some restriction given by the banks like specific percentage of fees on the principal amount, maximum number of times in a year, etc. When you are taking the loan itself should be very clear on those terms.

For example, if you have got bonus or any other lump sum amount which is lying idle in the bank, you can utilize that amount to part pay the home loans principal amount. It will reduce the number of years you need to pay the loan.

Switch the Home Loans to another Bank

It is another good idea to tackle the situation. For this, you have to do small research on other banks interest rates and the switching charges. Normally, when you are switching you have to pay closing charges in the current bank and processing fees in the new bank. You need to calculate everything and if you find it profitable, then its better to move to the another bank. I have written separate articles on switching the home loans.

Not Good Time to Buy House

It is not the good time for the new buyers. The home loans interest rates are very high and it looks there is more rate hikes from RBI in the near future. Which would result in more rate hikes from the banks. Apart from this, real estate scenario also worrying, the house prices are very high and be very careful on investing on the houses.

This advice would not be suitable for every one, if you are the one who depends on the monthly salary and running your life with the budget, think twice before investing on houses.

Read: More about Home Loans

Summary

In this article I have wrote down few points which might be very useful for the home loans buyers. However, they need more analysis on themselves to come into any conclusion. If you have any thoughts on this article, please post it in the comments section.

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ICICI has decided to increase its benchmark lending rates by 25 basis points. This change will be effective from July 4, 2011. The revised base rate and Benchmark Prime Lending Rate (BPLR) will be 9.50% and 9.2%. The bank also increased the floating reference rate (FRR) to 15.25%. Bank said the rates changes will not affect the fixed rate customers.

ICICI Bank has last time increase the key rates on May, 2011. This increase in the rates shows that the monetary policy tightened by RBI last month is reflecting in the banks tight liquidity. In the last couple of days, other banks like Canara Bank, Vorporation Bank and IOB have announced their hike in the lending rates.

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Mahindra Finance has revised the fixed deposit interest rates with effect from 24th May, 2011. It has the advantage of highest rating for the safety of your investments that is FAAA. Earleir I have written about the Mahindra finance fixed deposits. The following are the revised interest rates:

If you are interested in opening mahindra finance fixed deposit, please submit your details here.

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If you are happened to read the recent newspapers, it is most likely to read a news talking about the base rate system for the banks. Every banks announcing the base rates for lending loans. What is that?. I have written earlier in March 2010, about the implementation of the base rate system from 1st July, 2010. In this article, I will explain the use of base rates and how it will impact the banks and borrowers. It is one of the reforms on banking system by RBI to reduce the lending risk for banks. In the next sections, we will see that in detail. If you like the article, Please subscribe to our future articles here.

Say Bye to Prime Lending Rate (PLR)

Before setting the base rate system, banks used another rate system called Prime Lending Rate (PLR) to set their lending rates. The problem with this system is, banks manipulated this PLR to lower level to offer discounted lending rates for the borrowers. It may cause the loss for the banks if they offer loan with much cheaper price. The real intention of the RBI is to make the banking system much stronger after the global financial crisis.

The banks meet huge loss because of the default loans. The main reason is, when banks offer loans with cheaper price to lure the customers, most of the customers without adequate financial support too get the loans. It will end in default (can not repay the loans). Base rate system provides more transparency on setting the rates. Each bank use some criteria to set their base rates.

What is Base Rate System?

As I have mentioned in the previous section, Base Rate System is for the banks to set a level of minimum interest rates charged while giving out the loans. This Base Rate System has many advantages over the older method of Prime Lending Rate (PLR).  One advantage is, in the Prime Lending Rate (PLR), one could sanction the loan for lower price for the preferred customer or the corporate bodies and retail customers may have to pay more for the same type of loans. In the base rate system, there will not be much variance on the loans.

However, the base rate system will not be applicable for the following type of loans:

• Agricultural Loans
• Loans given to own employees
• Loans against deposit
• Export Credit

Base rate system is arrived at taking into the account, the cost of deposits and cost of keeping aside cash to meet CLR and SLR. It is convenient for the banks to adjust the lending rates after the changes on policy rates by the RBI.

Transparency on Base Rate System

Another advantage of  base rate system is transparency on calculation method to arrive the base rates. Every bank has to declare to the public how they have calculated the base rates. Fro example, SBI has calculated the base rate by taking into account of past six month deposits.

Excerpt from RBI’s Circular on Base Rate System:

Base Rate shall include all those elements of the lending rates that are common across all categories of borrowers. While each bank may decide its own Base Rate, some of the criteria that could go into the determination of the Base Rate are: (i) cost of deposits; (ii) adjustment for the negative carry in respect of CRR and SLR; (iii) unallocatable overhead cost for banks such as aggregate employee compensation relating to administrative functions in corporate office, directors’ and auditors’ fees, legal and premises expenses, depreciation, cost of printing and stationery, expenses incurred on communication and advertising, IT spending, and cost incurred towards deposit insurance;and (iv) profit  margin.

Base Rates for Banks

The following table presents the base rates announced for some of the leading banks.

Summary

I hope this article would be useful to know the purpose of bringing the new rate system into the banks. It is end of PLR and beginning of new rate system. We have to wait and watch, how the banks set their rates when there is any change in the policy rates. Keep update on the banking news by subscribing to our free newsletter.

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Savings Bank Account Deregulation

All the banks in India has to offers 3.5% interest rates for all the savings bank account holders.  It is the regulation enforced by Reserve Bank of India (RBI). This regulation has been amended recently to give the exact interest rates for all the days in a month. Previously banks provided only for the last 20 days of minimum balance which will be very less for the account holders. From 1st April,2010, savings bank account holders would receive the more interest income because of these changes.

Last week RBI has announced that it would like to deregulate the interest rates for the savings bank accounts. Here deregulation means, it will not be under the control of RBI anymore. The interest rates will differ for each bank. The banks will decide the interest rates based on their financial condition and other factors. The deregulation puts more competition among the banks to attract more savings bank account holders.

• How to better utilze the savings bank account?
• What is auto-sweep facility in savings bank account?

Some of the facts about Savings Bank account

• Savings bank account interest rates are 3.5% across all the banks.
• Prior to April 2010, savings bank interest rates are calculated for the last 20 days of the month and taking into the consideration of minimum balance.
• Deregulation would put more pressure on the banks to increase the interest rates.
• It is expected that after deregulation, the interest rates may go up to 4.5%.
• Deregulation is on proposal stage, after the review by industry experts, RBI will formally announce the deregulation

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In this article I will be writing about the RBI’s actions on few key interest rates changes and the impact on the rate hikes. Last month RBI has increased the CRR rates by 75 points. After that within a month, last friday RBI has announced the immediate rate hikes on the key rates repo and reverse-repo. This article explains the meaning of that rates and how it will impact the market in the future. These rate changes are intending to curb the inflation. If you like this article, please subscribe to our future articles here.

What is Repo and Reverse-Repo Interest Rates?

These two rates are frequently used by the finance industry. Many of us not aware of the exact meaning and why they have to increase the rates.

Repo (Repurchase) rate is the rate at which the RBI lends shot-term money to the banks. When the repo rate increases borrowing from RBI becomes more expensive.  Therefore, we can say that in case,  RBI wants to make it more expensive for the banks to borrow money, it increases the repo rate; similarly, if it wants to make it cheaper for banks to borrow money, it reduces the repo rate.

Reverse Repo rate is the rate at which banks park their short-term excess liquidity with the RBI. The RBI uses this tool when it feels there is too much money floating in the banking system.  An increase in the reverse repo rate  means that the RBI will borrow money from the banks at a higher rate  of interest. As a result, banks would prefer to keep their money with the RBI.

The bank raised the benchmark repo rate  to 5 percent and raised the reverse repo rate to 3.5 percent, with immediate effect.

Impact on Rate Hikes

There is clear message that the bank loans will be more expensive in the coming months. The recent move from the RBI reduced the ease of liquidity in banking system, it will make borrowing money is costly. We can expect the loans interest rates hike in the next few months. Banks will increase the FD rates to get money from the public.

Summary

I hope this article will be useful to understand the concept of these two important rates. If you have any doubts, please post it in the comments section.

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In this article I will be writing about the interest rates for fixed deposits in the coming months. As we have noted earlier that RBI had increased the CRR ratio by 0.75 points. This reduce the about Rs.35000 crore money  from the liquidity. It is expected to be increase in the banks fixed deposit interest rates. This article lists some of the announcements from the banks to increase the fixed deposit rates. Subscribe to free email updates.

Bank Fixed Deposits

The deposit rates increase started in the last week of January and till now more than 20 banks have increased their fixed deposit rates. I have written about the HDFC banks new deposit rates. The new rates vary based on the term of the deposit. Most of the rates hikes are done for the period of more than three years.

HDFC bank and Kotak Mahindra have hiked the rates for three year deposit 0.75 points. Majority of the private banks and foreign banks have increased the rates and few public sector banks also increase the rates. There is few banks have not changed the rates but will update it soon.

Company Fixed Deposits

Traditional bank fixed deposits offer low interest rates compare to the company fixed deposits. That is the reason why most people chose company fixed deposits. It is suitable for the short term like three years because risk involved in this deposit is high compare to safe deposits in banks. Some of the popular company fixed deposits Mahindra Finance, Tata Motors, Unitech, etc.

Till now there is no interest rates hike in the company fixed deposits. We are expecting the rate hike in the near future. Otherwise people will loose the interest in company fixed deposits and will chose the banks as their favorite avenue.

Summary

I hope this article will be useful for those who are interested in the safe investment options like fixed deposit. We can see the rates increase from all the banks and companies to get investment from the public.

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It is time for the home loans interest rates hike. Already leading home loans provider HDFC and ICICI has rolled back the two year fixed rates scheme. Few weeks back RBI had hiked the CRR rates by 0.75%. It reduces the liquidity in the system and tightens the monetary policy. It leads to banks revise their interest rates.

As of now SBI is not planning to increase the home loans rates for the next few months. Most of the private players already started looking into the possible hike in the rates. RBI’s new base rate system also will harden the interest rates for the customers. Some people say the interest rates will be increased based on the incoming deposits to the banks from customers.

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Tax Savings Fixed Deposit

I have written posts about the tax savings fixed deposit and why the fixed deposit is good for the monthly income. This will be suitable when the interest rates of the fixed deposit is high. In the recent times, all the banks have reduced the fixed deposit interest rates very low and it is some where between 6% to 7%. Only few banks offering the interest rates above 7%. I am getting the queries from the readers about the good interest rates for the fixed deposit scheme.

Article on Fixed Deposit:

• How to avoid TDS on Fixed Deposit?
• Top 5 Rules for Fixed Deposit Investment
• Fixed Deposit for Monthly Income
• Tax Savings on Term Deposit under Section 80c

PNB Tax Saver Fixed Deposit

Punjab National Bank(PNB) offer 8% interest rates for the tax savings fixed deposit. (In case of Senior citizen, 8.5%p.a.). Note that tax savings fixed deposit has the lock in period of 5 years. In that period you can not take loan from the fixed deposit. Income Tax will be deducted at the source. Note that, income coming out of this FD taxable as the interest income.

Documents Required for Opening Fixed deposit in PNB

1. Passport size Photograph.
2. Proof of Address.
3. Photocopy of PAN No.
4. Proof of age in case of Senior citizen.
5. Proof of having secured pass marks in last qualifying examination.

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After the announcement from other major banks like SBI, ICICI and HDFC to reduce the home loans interest rates, now IDBI bank joined the party to reduce the home loans interest rates effective from 16th December, 2009.

It is offering 8.25 per cent fixed rate for all its new loans till March 2012. The offer is applicable to all new home-loan customers applying on or before March 31, 2010, and taking a part or full disbursement during the offer period, an IDBI Bank press release said.

Presently IDBI Bank is offering 8.75 per cent for loans up to Rs 30-lakh, 9 per cent for loans between Rs 30- lakh and up to Rs 50-lakh and 9.25 per cent for loans above Rs 50-lakh.

You can read the IDBI Press Release

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Kotak Manhindra Bank announced a new home loans offer including a loan product at a fixed rate of 8.49% p.a. for 30 months (from the date of disbursement of the loan), and subsequently, the applicable floating rate for the balance term.

The applicable rate after 30 months will be the retail prime lending rate (RPLR) less the spread of 5.5%. Assuming the current RPLR continues, after 30 months, it will be at 9% p.a. floating rate. This is a limited period offer till Jan. 31, 2010. The rate of 8.49% p.a. is applicable for all new loans irrespective of the loan amount.

For salaried customers, the bank is also offering very attractive floating rates starting from 7.99% p.a. depending on loan amount.

While the fixed duration loan rate will remain the same irrespective of the loan amount, the floating rate will vary with the loan amount. Presently Kotak Mahindra Bank Home Loans are available in Mumbai, Delhi, Bangalore, Hyderabad, Ahmedabad, Surat, Pune and Chennai.

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SBI Reduced Term Deposit Interest Rates

SBI has reduced the term deposits interest rates effective from 9th November, 2009. The difference from the previous rates are varied from 0.25% – 0.50%.

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Introduction

In this article I am resenting a comparison char for the Mahindra Finance and Tata Motors Fixed Deposit Schemes. Many of our readers asking me about the difference between these two companies and which one is better. This article presents the chart which will give you the good idea about these two companies. If you have any doubts please post it in the comments section. Also subscribe to our future articles here.

Apply for Mahindra Finance Fixed Deposit (Get Free Financial Planning from TPI)

Mahindra Vs Tata Motors Fixed Deposit

From the above table you can get some idea about the difference between these two companies. I will point out some of the key points on these two companies in the below list.

• Tata Motors not offering 12 months scheme for any of the fixed deposit where as mahindra finance provide that option.
• Tata Motors cumulative half-yearlt, but mahindra finance annually.
• Both the schemes providing the 0.25% extra for the senior citizens.
• Tata motors provides monthly interest option if the deposit is above 1 lakh.
• Mahindra Finance  Interest payment half yearly on 30th September and 31st March only through ECS.
• If you look into the returns table, both the companies offer the same amount.

Summary

I hope this article will be useful to analyse these two companies fixed deposit schemes. My opinion is there is no big difference in these two companies, and you can invest any of these companies without any fear because they have good credit rating. Thank you for reading this article. If you have any doubts please post it in the comments section.

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Looking Back After One Year

We have crossed one year after starting this finance blog. It is last October when I hosted this blog with lot of fear whether I can post it regularly. Today I am happy to see the good growth of this blog and readers interest on the topic.

I love and Respect Readers

This blog receives lot of comments from the readers and I am trying to answer every comments in the blog and if I miss some of the comments unanswered I am sorry for that. There is many readers who are frequently posting the comments and I have good conversation with them.

There may be many readers who are just watching the conversation but not replying with their doubts. The intention of this post is to better know the readers and bring the silent readers to participate in the conversation actively.

Financial Knowledge is Must

When I am talking with my friends and co-workers, it very common that many people don’t have the enough knowledge on the financial planning and they just spend money without any proper planning. They don’t realize that they would have saved more money if they plan properly.

Awareness on financial planning is necessary for every one and it must be learned. Please make this your part time learning and save your hard earned money.

I want to Hear From You

In this post you just need to write in the comments following details:

• What is your Name?
• What is your Occupation?
• What is your Monthly Income?
• What is your Monthly Savings?
• What is your financial goal in the next five years?
• Why you are here?

I need this details to have close relationship with you to answer your questions. I am expecting our readers to actively participate in the discussion. Thank you for making this blog success!!!.

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In this article I will be writing about the feature Super Save and Sweep-In provided by the HDFC bank to its customers. I am writing this post with the details from HDFC bank. Also it is the response for our reader (Siva) posted in ask questions. His question is

HDFC bank offers sweep-in and super-saver facility .. Can you please explain about these .. Thanks Siva

Please read this article to know more about these facilities. If you like this article please subscribe to our articles.

What is Super Saver Accounts?

Super Saver accounts are like opening the Savings Bank and Fixed Deposit account together.  Many people know that when you are opening Fixed Deposit with tenure of 5 years, it is not good to pre-close the whole account for the urgent need of money which may be lesser than the Fixed Deposit account. For that purpose Super Saver Facility helps you to liquidate the money when you need with 2% higher interest rates. The following are the key points concerning Super Saver Facility:

• It is an over draft facility for the Fixed Deposit
• You can get up to 75% of the fixed deposit account as the Over Draft
• The interest rates for the borrowed amount will be 2% higher than the Fixed Deposit interest rates
• You can enable this facility for your Fixed Deposit by visiting the nearest bank branches.

What is Sweep-In Accounts?

Sweep-In facility also help you to utilize the Fixed Deposit, but without taking the overdraft on your fixed deposit account. The following are the key points regarding the Sweep-In facility:

• Linking the Saving Bank account and Fixed Deposit account.
• In case of short fall of amount in the savings account, use the sweep-In facility to with draw money from fixed deposit.
• The same interest rates will be charged for the remaining fixed deposit amount.
• The advantage of this account is you need not get the over draft or close the FD account to fulfill your needs.

Super Saver and Sweep-In Facility offered by HDFC Bank

As I have already mentioned, the sources for this article is taken from the HDFC bank and stats also applicable for the HDFC bank. The rates may be different for the other banks. If you are using the same facility in any other banks, please post it in the comments section.

Summary

I hope this article is very useful for many readers. If you have surplus amount in the savings account, please make it Fixed Deposit and use the sweep-in to fulfill your needs. Enjoy the high interest rates. Thank you for reading this article. If you have any doubts please post it in the comments section.

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SJR Primecorp Parkway Homes | Pre launch offer for limited period!!!

Introduction

If you are looking to get the home loans to buy a new house, then its good news for you. Many of the banks already slashed their home loans interest rates to lure the customers. The offer is targeting the festive season and will be over by end of this year. If you have any plan please use this opportunity to get loan at cheaper price. Subscribe to our future articles here.

Bank Of India

BOI comes up with star home loans. which can be availed till 31 December. For a loan of up to Rs 50 lakh, the rate of interest will be 8.50 per cent in the first year and 9.25 per cent in the second.

Union Bank of India (UBI)

As per the offer, for home loans up to Rs 50 lakh, the bank will charge a fixed rate of 8.50 per cent for the first three years.

ICICI Bank

ICICI Bank launched a special offer for all new home loans. As per the new offer, the bank will charge an interest rate of 8.75 per cent for loans up to Rs 20 lakh. For loans of Rs 20 lakh-50 lakh, the new interest rate is 9.25 per cent. Borrowing above Rs 50 lakh will attract 9.75 per cent interest rate.

State Bank of India (SBI)

State Bank of India (SBI) cutting rates by 50-75 bps on high-value home loans. Earlier, SBI had launched a new home loan scheme offering 8 per cent for 1-5 years, depending on the amount, with zero processing fees, as against an average of about 10 per cent charged by others.

Summary

Apart form these players Punjab National Bank, housing finance majors LIC Housing Finance and HDFC also reduced the interest rates. I hope this will be useful for the customers to buying new home of their dream. If you have any concern please post it in the comments section.

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SJR Primecorp Parkway Homes | Pre launch offer for limited period!!!

Bank of Maharastra(BoM) announces Mahabank Platinum Housing Loan Scheme for the home loans customers.

The new rates will be applicable for loans sanctioned between 16 September and 31 December, a press release issued here said.

For loans upto Rs30,00,000, the new interest rate for the first two-years will be 8%, for the third year 8.5%, for the fourth year 9.5% and for the fifth year 9.75%.

The average interest rate for the first five-year period will be 8.75%. The rate will be reset at the end of every fifth year, the release said.

For loans above Rs30,00,000 the interest rate for the first two-years will be 8.25%, for the third year 9% and for the fourth and fifth year 9.75%.

Average interest rate for the first five-year period will be 9%. The rate will be reset at the end of every fifth year, the release said.

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SJR Primecorp Parkway Homes | Pre launch offer for limited period!!!

India’s largest bank SBI has announced that they are reducing the interest rates on all their domestic fixed deposit schemes by 0.25%. This is with effective from October 5, 2009.

“We have brought down term deposit rates gradually. Going forward, this will marginally improve our net interest margin. We have not taken a call on reducing our benchmark prime lending rate,” said a senior SBI official.

The maximum interest rate that SBI will offer is 7.50 per cent (currently 7.75 per cent) on a long-term deposit of eight to 10 years.

At the short end, a term deposit of 15-45 days’ maturity will earn 2.75 per cent (3 per cent).

Last month, the bank discontinued its 1,000-day term deposit scheme by merging its scheme of two years to less-than-three-years.

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SJR Primecorp Parkway Homes | Pre launch offer for limited period!!!

HDFC Bank Fixed Deposit Interest Rates

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SJR Primecorp Parkway Homes | Pre launch offer for limited period!!!

Mahindra Finance Fixed Deposit

Earlier I have written about the mahindra deposit schemes and its interest rates. This blog post presents the table with latest interest rates for Mahindra Finance Fixed Deposit. Below this table I have posted the contact person for opening the fixed deposit with mahindra finance. If you have any problem please post it in the comments section.

Apply for Mahindra Finance Fixed Deposit (Get Free Financial Planning from TPI)

CUMULATIVE SCHEME

NON CUMULATIVE SCHEME

• *Senior Citizens/Shareholders/Employees will get an additional rate 0.25% per annum
• #Interest payment half yearly on 30th September and 31st March only through ECS.
• ** Compounded Annually

Do you want to apply for mahindra finance fixed deposit? Apply Now

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SJR Primecorp Parkway Homes | Pre launch offer for limited period!!!