Individuals find it difficult to make investments or bill payments on time specially those who travel frequently. Financial planning is not an easy task as one should consider risk, return, and tenure of the financial product.
If finances are not planned, one may end-up spending the income without saving amount to pay for bills.
Savings and investment should go hand in hand as only savings will not be sufficient in future. And one should make sure that investment is spread across different financial products catering to different needs.
Individuals can contribute to their retirement fund apart from EPF contribution as that alone cannot be sufficient.
Setting Systematic Investment Plan (SIPs) will help you contribute to your retirement fund, children education etc, without much efforts.
SIPs can be done through most mutual funds in the country. You can invest either through equity mutual funds or through debt mutual funds for your SIPs. Make sure that you seek advise where necessary.
Auto sweep out
Once you opt for this option from bank your idle amount after the threshold amount will automatically be booked as fixed deposits.
This will help you earn more on the savings as interest rate will be higher in the case of fixed deposits. Let us give an example.
Let us say that you bank with a private sector bank, where you need to keep just Rs 10,000 as balance. If you have larger balances, the amount would be automatically placed in an FD and you would earn higher interest.
The Electronic Clearing Service (ECS) is an electronic mode of payment for transactions that can be used for making payments or receipts.
ECS options can be used to make home loan payments, insurance premium payments etc. What is important is that you must keep track record of your payments that have been instructed through ECS.
Individuals who have opted for the same should ensure that the balance against the specified transaction is maintained in the account. If the ECS fails, the penalty charges will be applicable as in case of cheque bounce.
Credit card payment
Individuals can also opt to set up your credit card bill to be directly paid from your bank account. By doing this you will avoid late payment fees and your credit score will not be affected.
Here again, you should make a note of the amounts and payment dates and check balances accordingly.
Credit card holders can avail automatic payments option by setting a standing instruction upto a defined amount threshold or schedule payments at a later date.
Limit on transactions
Individuals can set a maximum limit on the transaction which can be done from the account. Which means, the card holder will not be able to any financial transaction after the set limit.
This will give time to think when you are spending on a luxury item which is not a necessity. ICICI Bank customers can request for change in debit card daily cash withdrawal or transaction limit by contacting customer care.
One can inform if limit change needs to be done temporarily for one day or permanently.
Bank customers can authorize bank to claim the amount directly from your bank account every month on the payment due date.
It will save your time and the effort of issuing a cheque every month. One can also set SMS Alerts for bill presentments, payments etc.