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9 Ways of improving your financial situation and money-saving tips

Save money

1) Paying yourself every week : – this is perhaps one of the best way to start budgeting for yourself. You can do that on a weekly or a daily basis. Keep aside $25-$50 or any amount of your choice and put that in a safe place. This is an amount that you are trying to save from your budget and use it later. So you won’t touch this money unless or until there is some serious emergency and you are in dire need of money. This kind of saving money will also help to minimize or eliminate your impulsive spending habits. By saving $50 every week, you can actually save $200 in a month and $4800 in two years. Of course this is not including the interest, but still this is a good money-saving opportunity.

2) Minimize your shopping habits : – people who love shopping very frequently can actually save a lot of money every year if they minimize their shopping habits. Before you spend money on anything, you must ask yourself first whether you really need it or not. Many a times, people buy things that is actually not required urgently, and therefore it leads to wasteful spending. One pair of jeans, a sweater and one pair of shirts can be enough for a few months, so just buy what you absolutely need and pass on those items that aren’t necessary.

3) Use your bank’s own ATMs : – it is always recommended to withdraw money from your own bank’s ATM machines. Whenever you withdraw money from other bank’s ATMs, they will charge you a fee. This can build up to a good amount in a year, just in fees, which can be easily saved.

4) Keep an eye on your spending : – it is a good idea to track your spendings on a daily basis. Write down every single dollar you spend. This will give you a “birds-eye” view and see where your money is exactly spent on a regular basis. You can refine your spending habits seeing this list and essentially save more money from your regular expenses.

Financial planning

5) Keeping your credit card balances to the lowest : – On an average, most of the credit card companies charge 15% – %20 in interests and fees, if the outstanding balance is not paid in full every month. Therefore it is important to pay off those pesky credit card dues as soon as possible.

6) Using your debit cards regularly instead of the credit cards : – Get in the habit of using your debit card rather than using your credit cards. Debit card is linked with your checking account, so whenever you make any purchase, you are sure of having that money in your checking account. Using a credit card can be quite expensive if you are not able to pay the full amount within the due date.

7) Rolling over the 401K when you are in between jobs : – Whenever people are changing jobs, they will be in a situation whether to roll over their retirement funds or to withdraw it since it is a good substantial amount. It is always suggested not to withdraw the retirement funds because it is that money that can be used in your old age. Moreover you will have to pay fines and penalties for an early withdrawal and it will take away almost 40%-60% of your savings. This is like giving your hard earned money to a stranger for nothing.

8) Avoid getting too many credit cards : – People having multiple credit cards and if they are not able to pay the amount in full are getting charged in more interests and fees by different banks. A person having just one credit card is in a much better situation than another person who is having 5 or 6 credit cards because he is paying more money in interests and fees. It is good to have one or two credit cards because it will help you to build credit and used during emergencies, if these credit cards are managed properly.

9) Checking your credit report at regular intervals : – it is always recommended to check your credit report once in six months. In many cases, credit bureaus are reporting inaccurate negative information on consumer’s credit report. This can often hurt your credit scores. If you find any inaccurate information on your credit report, get it solved with the credit bureaus to improve your credit ratings. Many a times, people are not aware about the unsettled accounts, or accounts that are still open/active when they should be closed. Pay attention to these items when you are checking your report.

How To Manage Finances Like A Successful Corporation

Manage finance

The job of managing your personal finances can be time-consuming. You need to have some basic knowledge about finances, and review your situation periodically. If you make poor financial decisions, it can take years to recover from your mistakes. Use these tips from successful corporations to manage your finances.

Creating a cash reserve

Ideally, everyone should create a monthly budget. That budget should include a line item for savings. Everyone needs a cash reserve. The extra cash you accumulate can help you cover an unexpected expense.

Mohawk is an example of a company that maintains a good cash reserve. In business, the cash reserve can cover an expense or be used to take advantage of an opportunity.

When you create a budget, you can use whatever system works for you. It’s critical, however, that you put budget in writing. If you can look at a piece of paper or on a computer screen and see your budget, chances are you’ll make the effort to stick with it.

Create categories for each type of spending. You should label each spending category as either fixed or variable. Say, for example, that your monthly income is $4,000 after tax. You have fixed expenses (home loan, car payments) of $3,000 and variable costs (food, gas, entertainment) of $1,000.

Assume you want to save $150 per month. If you need to cut expenses to generate savings, review your variable expenses first. Maybe you can cut down on dining out and come up with the $150.

Diversify your investments

When your savings balance gets large enough, you may consider investing some of those dollars. When people consider investments, they normally think of stock and bonds.

Hamad Darwish Al Masah Capital explains that investors can now consider alternative investments. Alternative investments include real estate, commodities and other less traditional securities.

The important point is to diversify your holdings. If you diversify, you won’t be hugely affected by any single change in the investment markets.

Maintaining good credit

If you have a good credit rating, manage your borrowing so you keep that high rating. Make sure that you can afford the monthly principal and interest payments on any debt you incur. Ensure that your payments are on time, and that your credit report is accurate.

A high credit rating also provides advantages to a corporation. Standard and Poor’s (S&P) rates the creditworthiness of businesses. The highest S&P rating is AAA.  USA Today reports that only three US companies had a AAA credit rating in 2014.

Both individuals and companies with a high credit rating can borrow at lower interest rates. This reduces the cost of borrowing and makes loan repayment easier.

Borrowing alternatives

Sometimes, a business cannot borrow through a traditional bank. The interest rate on the bank loan may be much higher than the company wants to pay. Hamad Darwish of Al Masah Capital points out that investment firms can help companies raise capital through a loan or buy issuing stock.

Individuals also have choices if they cannot get a loan from a bank or credit union. Borrowers can find a company that specializes in loans to people with poor credit. You can get the financing you need, if you’ll willing to pay a higher interest rate.

Use these tips to monitor your personal finances. If you’re willing to invest some time and effort, you can improve your financial situation.

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

PMJJBY

Highlights of the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) – for Life Insurance:

  • Eligibility: Available to all the people in the age group of 18 to 50 and must have a bank account. People who join the scheme before completing 50 years can, however, continue to have the risk of life cover up to the age of 55 years subject to payment of premium.
  • Premium:  Rs 330 per annum.
  • Payment Mode:  The premium will be auto-debited by the bank from the subscribers account.
  • Risk Coverage: Rs. 2 Lakh in case of death for any reason. The amount will be paid to the Nominee.
  • Terms of Risk Coverage: A person has to opt for the scheme every year.
  • Who will implement this Scheme?: The scheme will be offered by Life Insurance Corporation and all other life insurance company who are willing to join the scheme and tie-up with banks for this purpose.

Termination of assurance:

  • At the time of attaining the age of 55 years.
  • Closure of account with the Bank or insufficiency of balance for debiting premium.
  • In case of multiple coverage under the scheme, the cover will be restricted to Rs.2 lakhs and other insurance covers are terminated and premium shall be forfeited.

Application and claim FORM: http://www.jansuraksha.gov.in/Forms-PMJJBY.aspx

FAQ: http://www.jansuraksha.gov.in/Files/PMJJBY/English/FAQ.pdf

Rules: http://www.jansuraksha.gov.in/Files/PMJJBY/English/Rules.pdf

PMJJBY

Pradhan Mantri Suraksha Bima Yojana

PMSBY

In his budget speech on 1 Mar 2015, Finance Minister Shri Arun Jaitley said,

A large proportion of India’s population is without insurance of any kind, health, accidental or life. Worryingly, as our young population ages, it is also going to be pension-less. Encouraged by the success of the Pradhan Mantri Jan Dhan Yojana (PMJDY), I propose to work towards creating a universal social security system for all Indians that will ensure that no Indian citizen will have to worry about illness, accidents or penury in old age,”.

The Schemes were launched by Prime minister on 9 May 2015.

In this article we are discussing the details of the scheme named Pradhan Mantri Suraksha Bima Yojana.

  • Eligibility: The scheme is available to people in the age group of 18 to 70 years holding a bank account.
  • Premium: Rs 12 per annum.
  • Policy period:The cover shall be for one year period starting from June 1, 2015 to May 31, 2016 for which option to join / pay by auto-debit from the designated Savings Bank account on the prescribed forms will be required to be given by May 31, 2015 – extendable up to August 31, 2015. For the saving A/c holder joining after May 31, 2015 and on or before August 31, 2015 the cover shall end on May 31, 2016.
  • Payment Mode:The premium will be deducted by the bank from the subscribers account through auto-debit process. There is no alternative mode avaiable.
  • Risk Coverage:  Total coverage (sum-insured) under the scheme is Rs. 2 Lakh.
Sl. No Conditions Sum Insured
I) Death Rs. 2 Lakh
II) Total and irrecoverable loss of both eyes or loss of use of both hands or feet or loss of sight of one eye and loss of use of one hand or one foot Rs. 2 Lakh
III) Total and irrecoverable loss of sight of one eye or loss of use of one hand or one foot Rs. 1 Lakh
  • Who will implement this Scheme?: The scheme will be offered by all Public Sector General Insurance Companies and all other insurers who are willing to join the scheme and tie-up with banks for this purpose.
  • Tax Benefit: The premium paid will be tax-free under section 80C and also the proceeds amount will get tax-exemption u/s 10(10D).But if the proceeds from insurance policy exceed Rs.1 lakh , TDS at the rate of 2% from the total proceeds if no Form 15G or Form 15H is submitted to the insurer.
  • Exclusions: Major Exclusions: Intentional self injury, suicide or attempted suicide whilst under the influence of intoxication liqour or drugs, Any loss arising from an act made in breach of law with or without criminal intent.

Application Forms and Claim Forms can be found here:  http://www.jansuraksha.gov.in/FORMS-PMSBY.aspx

FAQ: http://www.jansuraksha.gov.in/files/pmsby/ENGLISH/FAQ.pdf

RULES: http://www.jansuraksha.gov.in/Files/PMSBY/English/Rules.pdf

 

PMSBJ

  •  Resources:

Official website of the scheme: http://www.jansuraksha.gov.in/Default.aspx National Toll-Free – 1800-180-1111 / 1800-110-001

List of Banks in India

Banks in india

Many of us want to know how many Banks (Public Sector Banks, Private Sector Banks, Foreign Banks) are operating in India. Below find the list of all the banks with their website link.

Commercial Banks:

List of Public Sector Banks in India :- (Click to visit the website of the Bank)

Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
IDBI Bank Limited
Indian Bank
Indian Overseas Bank
IDBI Bank (Industrial Development Bank of India)
Oriental Bank of Commerce
Punjab & Sind Bank
Punjab National Bank
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank Of India
Vijaya Bank

List of Private Sector Banks in India : – (Click to visit the website of the Bank)

Axis Bank
Catholic Syrian Bank Ltd.
IndusInd Bank Limited
ICICI Bank
ING Vysya Bank
Kotak Mahindra Bank Limited
Karnataka Bank
Karur Vysya Bank Limited.
Tamilnad Mercantile Bank Ltd.
The Dhanalakshmi Bank Limited.
The Federal Bank Ltd.
The HDFC Bank Ltd.
The Jammu & Kashmir Bank Ltd.
The Nainital Bank Ltd.
The Lakshmi Vilas Bank Ltd
Yes Bank


List of Private Sector Banks in India : – (Click to visit the website of the Bank)

Abu Dhabi Commercial Bank Ltd.
American Express Bank Ltd.
Arab Bangladesh Bank Limited
Antwerp Diamond Bank N.V.
Bank Internasional Indonesia
Bank of America N.A.
Bank of Bahrain & Kuwait BSC
Barclays Bank Plc
BNP PARIBAS
Bank of Ceylon
Calyon Bank
Citibank N.A.
Cho Hung Bank
Chinatrust Commercial Bank Ltd.
City Union Bank Ltd.
Coastal Local Area Bank Ltd.
Deutsche Bank AG
Development Credit Bank Ltd.
J P Morgan Chase Bank, National Association
Krung Thai Bank Public Company Limited
Mashreqbank psc
Mizuho Corporate Bank Ltd.
Oman International Bank S A O G
Societe Generale
Standard Chartered Bank
Sonali Bank
State Bank of Mauritius Ltd.
The Bank of Nova Scotia
The Bank of Tokyo-Mitsubishi, Ltd.
The Development Bank of Singapore Ltd. (DBS Bank Ltd.)
The Hongkong & Shanghai Banking Corporation Ltd.
The Royal Bank of Scotland N.V.

 

Financial Institutions
National Bank for Agriculture and Rural Development
Export-Import Bank of India
National Housing Bank
Small Industries Development Bank of India
Industrial Investment Bank of India Ltd.
North Eastern Development Finance Corporation

Efficient financial planning tips for growing children

child financial planning

Every parent wants their children to get the best education possible and be successful in life. However, life is uncertain and the path to fulfilling all your desires may be a convoluted one. Hence you need to implement a sound investment strategy. With proper planning and a variety of investment options, your child will have a good journey to a valuable college degree. Follow these tips for an efficient planning for growing children.

1) Creating a financial plan and know where to end: When you are planning for your children’s education, work out an estimate of all the costs involved. Keep this estimate as a guide and start piercing together your investment plan. You will see a variety of education planning options each with its own risks and benefits and you will use it accordingly to achieve your goals.

  • a. To get started, make an education saving plan in the early days. You will have money available when your child enters college. These education savings plan come with different protection benefits to the child and the parent.
  • b. If you have property, it will provide rent and capital appreciation and this can be used in your child’s education. Rent money can be used to pay for your child’s tuition fees and other related expenses. And when the value of the property increases, it can be sold to obtain capital gains. When you invest your money in the property market, do a thorough research because this market will fluctuate and you may not get the selling price as anticipated.
  • c. Unit Trusts and Structured Investments can also be a part of your investment planning.

2) Set up an automatic system to invest regularly: Make an action plan where your savings or investing can be made automatic. Many savings, investment linked plans and unit trust funds can be operated monthly, quarterly, half annually or annually. When you are investing regularly, you will also benefit from Dollar Cost Averaging. It is an average of highs and lows of an investment and lower the total average cost per share of the investment.

financial planning

3) Reviewing the plan: When you reviewing the plan regularly, you will stay on track with your target goals. Make sure that you review it at least once in a year and with any major change in your life, such as a new child, career advancement or move to a bigger house, find ways to top up if it is not up to the mark in reaching your investment goal.

4) Top up annually or whenever you can: You can always increase your contributions annually or top up your contributions when there is an increase in your income or you get a bonus or increase in your pay. You will be able to meet your target quicker and achieve a large fund.

5) No dipping into the funds: Choose the right plan that will lock your funds for your children’s education until they are ready to go to college. You should not be able to withdraw the fund easily otherwise you will use the money for other emergencies or needs that may come up.

Financial planning for child

6) Contributions from family members: You can encourage grandparents or other relatives in your family to not to spend money in gifts but opt for a cash contribution towards their education fund instead.

7) Making a team effort: Encourage your children to do savings for their future education. While you are reviewing your investments for their education funds, you can discuss it with them so that they know how hard you are working and putting your efforts towards achieving their goals. If they want to contribute a small portion towards their education fund, appreciate it. And when they are ready to leave for university, make sure that they have learnt good money management habits so that they are able to live within their means.

How to increase your control over bank overdrafts

Bank overdraft

Bank overdraft happens whenever you execute a debit, check or credit card transaction and there is no sufficient balance in the checking account it is connected with. Bank will immediately reject the transaction whenever an overdraft happens.

You can protect yourself from frequent overdrafts by enrolling in an overdraft protection program offered by the bank. Whenever a merchant or an individual hits your checking account and there is no sufficient balance in your account, your bank or the credit union will cover the overdraft amount by paying the required amount to the merchant or the individual. The bank will usually charge a fee for such services. And if there are multiple transactions in a day, you might end up paying a hefty amount to the bank in overdraft charges.

In most cases, it is the banking customer who has overdrawn his bank account should be liable to pay for the fees to the bank, provided he has been informed of the fees. But if you dig a little deeper, the reality is a bit different.

Many banks usually do transaction stacking, where they process the larger transactions first in a given day before processing the smaller ones. As a result, it will increase the chances of the account getting overdrawn because of insufficient funds and thus more fees being incurred. This is one easy way for the bank to increase their fee based income. It can cost up to $25 billion per year business for the banks.

Banking

Many a times, people find it confusing to understand the bank online statements. You might have to manually track and do back-of-the-envelope calculations to figure out the actual account balance at any given time. Even though you might see a positive balance in your account, but because of uncashed checks, pending credit card transactions, your balance will run low or into the red in no time, and before you realize, the bank has already charged you a fee for the overdrawn transactions.

Once there is an overdraft, you will notice a charge in your statement. It can be $20, or $30 or even $35 in the red. First you have to clear this fee to the bank before your account balance turns black.

  • So how to control these bank overdraft charges? Follow these tips and you will be able to keep a check on your account.

1. Whenever you incur any overdraft charges, you should call the bank and clarify it. It is worth a shot, especially if you are a new customer to the bank or if this is your first overdraft in a very long time. If you are not satisfied with their services, you can close this account and open a new account with another bank. There are chances that they might waive off the fee because they don’t want to lose your business.

2. Contact the bank’s customer service department and request for a refund of the entire overdraft fee if you notice any error by the bank that led to an overdraft.

3. Shop for a bank that does not charge any overdraft fee.

Getting the Best Short Term Loan in a Hurry

Loans

Sometimes bad finances happen to good people. An unexpected car repair, an emergency medical expense or a leaky roof can throw your careful budget for a tailspin. When these money emergencies happen, it’s good to know that there is somewhere you can turn for extra cash. Getting a short term has never been easier or quicker.

How Short Term Loans Work:

Short term loans are intended for one-time events that require you to come up with a lump sum of cash. When these situations arise, you can apply for a quick loan and have money delivered to your bank account quickly. Repayment terms for these loans vary, but in most cases, you can make weekly payments that allow you the flexibility of paying back your loan over time.

You can often get short term loans regardless of your credit situation. Many companies that offer loans work a network of lenders that loan to a variety of applicants from a wide range of credit scores. This means that even people with less than perfect credit have a chance at getting approved for a short term loan.

Applicants usually have to pass minimum qualifications for getting a loan. This include being at least 18 years of age, earn a minimum annual salary and have an active checking account. You can get info here on how you can get a short term for all your financial needs.

Don’t let an unexpected expense throw you for a loop. Apply for a short term loan and get your money back on track today.

Financial tips to manage your home business

Home business

When you start a home business of your own, you will need to take a lot of responsibilities, because a lot of great opportunities will come your way. You are the only person to look after your business and make wise decisions and keeping a track of your finances.

While there is professional help available to take care of your business finances, but you can also try the different options to take care of it. Whichever option you choose, you will need something to take care of your budget, taxes, receipts etc.

Business bank account: when you start your own home business, you should a separate bank account for doing all the financial transactions related to your business. There is no need to mix your home finances with your business, especially when your business begins to lose money. Many people lose track when they are juggling with their finances from one account.

Your business will always look professional when it has a separate business account. You will have more options and rewards than personal bank accounts.

Finance software: it will be a wise decision to install a computer for your business with a software program. It will keep track of your money, bills, budgets, schedules and more. These programs are very easy to learn and will be very handy when your business starts growing.

financial tips

There are many programs in the market that can be purchased and installed to get alternative help for your business. They have optimum features to take care of all your services. Before purchasing any program, read the customer reviews to understand which program works the best for specific home businesses, computers and system requirements.

Cash on delivery: in the beginning days, you will have limited employees, and the money collected will be done by your hands. When you receive payments from your customers, make sure that you keep a proper track of it so that you can separate the non-paying customers and other money mix ups.

Home and business budget: it is important that every home budget has a fixed budget. Without a budget, there are chances that you end up spending more than your business can handle. And if you don’t have a separate business account, your business finances will get drained by your home expenses.

Whenever a business starts making loses, many business owners, having no other options, take out money from their personal accounts to cover the losses. This can be a very bad financial decision that will threaten both your business and home. Make sure that you create a solid budget so that you keep a close eye on your money and calculate the losses and gains on a weekly, biweekly or monthly basis.

Every owner is responsible for his own home business from the beginning to the end. And you should have a proper track of your money. A software program can make a lot of things easier for managing your business finances.

Indian Income Tax Slab/Rates for the F.Y. – 2015-16 and A.Y. – 2016-17

Income-Tax-Dept-India

On 28th of February 2015 Finance Minister Shri Arun Jaitley announced the budget of India for the Financial Year 2015-16. The Income Tax slabs/rates for the the Financial Year 2015-16 and Assessment Year 2016-17 is discussed below:
  
  

(I) For Individuals aged below 60 years (including Woman Assessees or any NRI/ HUF/ AOP/ BOI/ AJP):
 

Income

Tax Rate

Upto 250,000 Nil
250,000 to 500,000 10% of the amount exceeding 250,000Less ( in case of Resident Individuals only ) : Tax Credit u/s 87A – 10% of taxable income upto a maximum of Rs. 2000/-.
500,000 to 1,000,000 Rs.25,000 + 20% of the amount exceeding 500,000
1,000,000 & above Rs.125,000 + 30% of the amount exceeding 1,000,000

 


(II) For Senior Citizen (Individuals aged 60 years and above but below 80 years):

Income

Tax Rate

Upto 300,000 Nil
300,000 to 500,000 10% of the amount exceeding 300,000
500,000 to 1,000,000 Rs.20,000 + 20% of the amount exceeding 500,000
1,000,000 & above Rs.120,000 + 30% of the amount exceeding 1,000,000

 

(III) For Super Senior Citizen (For Individuals aged 80 years and above):

Income

Tax Rate

Upto 500,000 Nil
500,000 to 1,000,000 20% of the amount exceeding 500,000
1,000,000 & above Rs.100,000 + 30% of the amount exceeding 1,000,000

Surcharge : 10% of the Income Tax, where taxable income is more than Rs. 1 crore.

Education Cess : 3% of the total of Income Tax and Surcharge.

Tax Credit U/S 87A: Finance Bill 2015 says nothing on the Section 87A. Hence this provision continues for AY 2016-17 as well and provides a rebate of Rs 2,000 for individual whose taxable income doesn’t exceed Rs. 500,000.

 

(IV) For Co-operative Society

Income

Tax Rate

i. Where the taxable income does not exceed Rs. 10,000/
10% of the income.
ii. Where the taxable income exceeds Rs. 10,000/- but does not exceed Rs. 20,000/-.
Rs. 1,000/- + 20% of income in excess of Rs. 10,000/-.
iii. Where the taxable income exceeds Rs. 20,000/-
Rs. 3.000/- + 30% of the amount by which the taxable income exceeds Rs. 20,000/-.

Surcharge : Where taxable income is more than Rs. 1 crore, Surcharge will be 10% of the Income Tax. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the Income Tax and Surcharge.

 

(V) For Firm

Income Tax Rate

Surcharge

Education Cess

30% of the taxable income. Where taxable income is more than Rs. 1 crore, Surcharge will be 10% of the Income Tax. (Marginal Relief in Surcharge, if applicable) 3% of the Income Tax and Surcharge. 

 

(VI) For Local Authority

Income Tax Rate

Surcharge

Education Cess

30% of the taxable income. Where taxable income is more than Rs. 1 crore, Surcharge will be 10% of the Income Tax. (Marginal Relief in Surcharge, if applicable) 3% of the Income Tax and Surcharge. 

 

(VII) For Domestic Company

Sl No.

Particulars

Tax Rate

Surcharge

Education Cess

Effective Tax

1.

Domestic companies (with total taxable income less than 1 Cr.)

30%

3%

30.90%

2.

Domestic companies (with total taxable income more than 1 Cr. but less than 10 Cr.)

30%

7%

3%

33.063%

3.

Domestic companies (with total taxable income more than 10 Cr.

30%

12%

3%

34.608%

 

(VIII) For Company other than a Domestic Company or Foreign Company

Sl No.

Particulars

Tax Rate

Surcharge

Education Cess

Effective Tax

1.

Foreign companies (with total income less than 1 Cr.)

40%

3%

41.20%

2.

Foreign companies (with total income more than 1 cr. but less than 10 Cr.)

40%

2%

3%

42.024%

3.

Other foreign companies

40%

5%

3%

43.26%

Income-tax-individual

Helpful Resources:

http://www.incometaxindia.gov.in/Pages/default.aspx

https://incometaxindiaefiling.gov.in/

Selecting the best variable annuity

Annuity

Many people are worried about thinking how much money will they have once they retire? Many people have become a lot cautious after recession and they are forced to think about their future. Whenever they come to know about new options to investment, they will want to explore it in every possible way. In a situation like this, a changeable annuities is one of the best investment tools.

Variable annuities are a good source of steady return in the form of interest income. The rate of return changes every year is changing every year, hence they are also known as changeable annuities. Many people take is as a long term investment alternative. It will give you lifelong saving option with a steady stream of income.

Variable annuities are available in variety of schemes. All annuities are not the same hence you should have a perfect knowledge on how to choose the best one. Here are some factors that will determine the changeable annuities that is the most suitable for you.

Ratings : There are different companies in the market that offer variable annuities. These companies are given financial strength ratings according to their performance over the years. As per the ratings, the best company is preferred in the market. Be very careful in choosing the company because sometimes, you will find a company in the market that does not have a good reputation when it comes to paying claims.

Annuity

Expenses : variable annuities are not offered for free. You need to pay a certain charge in order to get their services. These fees come under different headings and they also vary from one company to another company. Therefore it is a good idea to shop with different company, read their terms and conditions and the fee structure before making the final decision.

Withdrawal : It is often advised that you hold your investments for the entire duration. But there may be times that you might have to make a withdrawal due to emergency. Hence you should look for a scheme in which the withdrawal is easy and straightforward. Sometimes you will find a company that has a very complicated withdrawal process and they also charge a special fee with taxes for early withdrawal.

Retirement : There are some variable annuities that may be not be very beneficial after retirement. So you should do a thorough research on the different schemes and check out the retirement benefits on offer. It will be an added benefit if the changeable annuities can be placed in a retirement account. This will allow you to get steady income after retirement. You can defer taxes on your variable annuity. The retirement benefits can make the changeable annuities plan ideal for you.

Flexibility : Interest rates on the variable annuities changes every year. If the interest rate falls below a level, you will feel satisfied with your investment. You can easily change your investment strategy and does not have to necessarily agree to a lower interest rate. You can alter your investment if the company offers sub accounts. Check this feature before making your final decision.

Helpful Articles:

http://www.sec.gov/answers/annuity.htm

http://en.wikipedia.org/wiki/Annuity