I have two bank accounts, opened as salary accounts. They continue to be salary accounts, though I have changed jobs. But I regularly use the accounts. Should I convert these to normal savings accounts? If yes, why?
Most banks follow a process wherein they convert salary accounts into normal savings account in case salary credits have stopped for a certain period. A detailed communication is sent to these clients on their registered address, email prior to the conversion giving a notice to convert to another choice of existing savings account options.
In case your salary accounts have not been converted, you should definitely convert and consolidate these into one single savings account.
It would save you from the hassle of managing and tracking multiple accounts and also opt for a higher savings account variant with enhanced benefits.
Does it make sense to buy insurance or mutual fund products bundled with the bank account? If yes, why?
Life insurance or mutual products are bought keeping a specific goal and your individual risk profile in mind. When bundled with a bank account, these are usually standardised and might not suit or fulfill your requirement.
So, instead of looking for a bundled option, you should first understand your requirement for both insurance and mutual fund products and then decide the product you want to take.
How is a recurring deposit different from a fixed deposit?
The major difference is the amount and periodicity of investment. Fixed deposits require a lump sum investment or a one-time investment, whereas recurring deposits need small and regular investments.
Therefore, if a person wishes to invest a specific amount at regular intervals, he should opt for a recurring deposit and in case the choice is to invest a lump sum, he should opt for a fixed deposit account.
How does the product loan against property work? What is the rate of interest charged and for how long?
A loan against property (LAP) is very similar to a personal loan, as the amount can be used for any legal purpose.
However, there are three key differences:
a) To avail an LAP, a person needs to offer collateral or property to the bank. The amount of loan provided would be between 60 and 75 per cent of the property value, as ascertained by the bank;
b) the repayment tenure offered is much longer, making the equated monthly instalment lower. Most banks offer tenures ranging from 10 to 15 years;
c) the interest rate is also lower than a personal loan. At present, it is around 12 per cent.
The views expressed are expert's own. Send your queries to yourmoney@bsmail.in
Today, Prashant Joshi, MD & head, private & business clients (India), Deutsche Bank, answers your questions
Today, Prashant Joshi, MD & head, private & business clients (India), Deutsche Bank, answers your questions
