I took a home loan four years ago. The bank told me that the interest rate will be 3 per cent below the bank’s prime lending rate (PLR). I found that my rate was just 2.25 per cent below the bank’s PLR. On enquiry, the branch official told me that he could not do anything as it was the management’s decision. What do I do now?
If the floating rate was clearly communicated to you as PLR minus 3 per cent in the loan agreement without any proviso for changing the spread and you have a clean repayment record, I do not see any reason for the bank to reduce the differential to 2.25 per cent. You may ask your bank the rationale for this. However, if you have defaulted or delayed any payment, the bank has the right to reduce the differential in view of the increased risk perception.
My bank’s salesperson told me that I could buy gold exchange-traded funds (ETFs) if I had an investment and a demat account with the bank. As I understand, I would also need a trading account to buy gold ETFs as they are traded on stock markets. Is it possible to buy gold ETFs through banks’ investment accounts? How does this work?
ETFs are traded on stock exchanges for which demat accounts are mandatory. While banks do offer ETFs at the new fund offer stage, a demat account is still necessary. So, you can buy ETFs through an investment account.
I am travelling overseas. What will work better —credit card, debit card or traveller’s cheque? What are the charges a credit card issuer and a bank can levy? Someone also suggested a pre-paid card. I wonder if it is different from a debit card.
While travelling overseas, one should prefer a credit card, which has many advantages. For one, you can use the card while travelling and pay later, as against a debit card, where the amount is debited instantly from your account. A credit card can be used at a large number of locations as compared to traveller’s cheques, which can be encashed at select places.
Also, a credit card or a debit card can be blocked in case of loss or theft and so provides better security. The credit card issuer may levy a 3.5 per cent charge over the exchange rate as a foreign currency mark-up.
A pre-paid travel card is like a debit card where you have to pay upfront to load the card with the currency that you need without the need to open an account with the bank.
Prashant Joshi is managing director & head of Private & Business Clients India, in Deutsche Bank.
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