In the finance driven world, it is more difficult to handle and invest money than it is to earn it. You might be really good at your job and earn several lakh rupees annually. However, the problem arises when you do not know how to invest the hard-earned money in the proper places.
Banks are financial institutions that are popular in handling peoples’ finances. In the earlier days, banks were established only as a safe vault for you to keep your most valuable assets/cash in a secure location. However, over the years, the function of a bank has evolved adding new elements of functionality to its repertoire. Here, we shall discuss the common functions of the modern-day banks.
Have you ever wondered how banks function and what do they get in return when they offer you interest-based returns on your savings? The primary income for a banking institution is that it efficiently handles money for you. When you are not using your money, the bank uses it to loan it to some people in need of money for a heavy interest rate. The bank efficiently forwards you a small amount of the interest that they get via your money as the interest on your savings/deposit account. The bank utilizes the rest of the money to carry out normal day to day functions.
A bank usually offers different types of loans to its clients. Some of the most commonly availed loan types include:
A personal loan is the most commonly availed loan type since the recipient of the loaned amount is not bound to spend it in a particular way unlike the other types of loans. However, this freedom to spend the loaned amount comes at a cost of higher interest rates and smaller repayment periods. read more..
Home loans are a special type of loans availed by an individual to purchase a house with the money. These types of loans are commonly associated with longer repayment periods and a moderate amount of interest rates. read more..
As the name suggests, the car loan, commonly known as the auto loan, is given to an individual to help him purchase a car. The individual can use the loaned amount to purchase a new or a used car. It is usually easier to get a loan from the bank for a new car compared to an old car. read more..
This loan is availed by an individual to assist him/her to purchase a new two-wheeler vehicle. It works quite similarly to the car loan. However, you will often find two-wheeler loans at higher rates of interest with smaller repayment periods and smaller amounts. Modern-day loaning techniques adopt a reducing method of calculating interest on the loan that allows it to calculate the interest on the pending amount after each instalment is paid by the individual. read more..
This is another one of the popular loans commonly availed by students or parents who wish to finance their ward’s education. An education loan is often taken up by the student to pursue his higher education overseas. The stark feature of the education loan is that the repayment period for the loan starts only after the student gets a stable job and starts earning after completion of the education. read more..
A loan on a credit cardis short-term loan given to people who wish to shop or carry out their day to day expenses. This loan is often associated with a small rate of interest and monthly repayment period. We shall talk more about the various types of credit cards ahead. read more..
As the name suggests, the business loans are given to individuals who wish to start their own venture/company. An existing big/small business too can avail a business loan to carry out its expansion plans. read more..
These are the two major subcategories under the type of loans. In case you adopt a policy that allows you to avail a loan from a bank without placing any collateral in return, you are availing a secured loan. On the contrary, you avail an unsecured loan. The rate of interest for a secured loan is considerably lower than one for an unsecured loan.read more..
All these types of loans have several sub-categories. These loans may have different names according to the policy types in different banks. Some of the other common types of loans include student loans, payday loans, refinancing loans, etc. You can avail one or more of these loans from a bank in case you have a good credit score and history.
Credit cards are one of the two major types of plastic currency in use all over the world. Credit cards are a simple and efficient way to avail a loan quickly and efficiently for a short period. Banks often offer schemes and cashback offers at small interest rates with their credit cards to lure customers.
A bank usually offers the following different types of credit cards to its users.
The standard credit cards are the most commonly availed type of credit cards. They do not feature any special feature or offer and are often easy to get. These cards feature a low or medium spending limit with a monthly repayment period.read more..
The business credit cards cater to the needs of executive level purchases made by a company executive or for business purposes. These cards have a huge spending limit to fulfil the needs of purchasing marketing goods for a company.read more..
The secured credit cards work in a similar fashion to a secured loan. You need to place a small collateral item against these cards to avail them. The major benefits of these cards include a small interest rate, larger repayment period and a big spending limit.read more..
Rewards credit cards are the most popularly availed type ofcredit cards since an efficient use of these credit cards will allow you to save a lot of money on a day to day expenses. These credit cards feature benefits such as free movie tickets or discounts on dining and other lifestyle options. read more..
The balance transfer credit cards often work as loan refinancing plans. These cards are helpful in preventing the late bill payment fee by transferring the amount on one credit card to another towards the end of the grace period.read more..
The premium credit cards are given to people with a very high level of regular income. These credit cards require a really good credit history and often years of connection with the bank. The premium credit cards are classified as platinum, gold, sapphire, silver, etc. credit cards.read more..
Fuel credit cards are perfect for the avid travellers since they give benefits on paying fuel refill bills with the card. The fuel refill benefits often include conversion of the reward points into cash or fuel recharge benefits.read more..
The cashback credit cards are the number one choice for the shopaholic people. These cashback credit cards give massive cashback rewards on shopping online or offline via the card.read more..
The travel credit cards are tailored for people who travel internationally often. These credit cards allow easy conversion of currency and get the necessary support at several ATMs around the globe. read more..
The names and types of credit cards offered to a client may differ from bank to bank. Availing the different types of credit cards require completion of different eligibility criteria. For example, the spending limit on a premium credit card is usually higher than a standard one, therefore it is given to the people who have a very high regular income. The credit card is often linked to your bank account so that the bank can automatically deduct the credit card bill amount as soon as your employer credits the salary.
The use of a credit card efficiently can help you save a lot of money on lifestyle and shopping habits. It is advisable to go with a debit card in case you have extravagant spending habits over the budget line.
Another one of the primary functions of a modern-day bank is to offer insurance policies to their users. Several banks in India like ICICI, SBI, PNB, etc. offer insurance policies to their clients. Just like loans and credit cards, there are various types of insurance policies that one can avail from a bank.
As the name suggests, the vehicle insurance helps the policyholder in securing his/her vehicle against damage or theft. Some of the popular companies that offer a good vehicle insurance include, TATA AIG and Bajaj Allianz. It is advisable to purchase a new insurance policy with every new vehicle that you purchase. read more..
Home insurance is one of the most commonly availed types of insurance since it gives the protection for the policyholder’s home against damage or theft. There are different sub-categories under the home insurance types too. Some of these types of home insurance not only protect the overall property but also gives you compensation for damage to articles within the home. read more..
Life insurance is an insurance that helps an individual take care of his/her family’s needs in case of his/her early demise. The life insurance policy often offers benefits worth several crore rupees for a smaller premium of a few thousand rupees every month. read more..
The health insurance comes to the rescue of the policyholder in case of a medical emergency. This insurance can cover the complete medical costs of an individual in case he/she needs immediate medical attention. It is easier for a young individual in his/her early thirties to get a health insurance compared to an elder person. read more..
The property insurance helps the person secure the compensation against damage to his/her property. This is an insurance commonly availed by shopkeepers to safeguard shops against physical damage due to theft or a natural calamity. The valuation of a property insurance can range from a few thousand to several crore rupees.read more..
– The travel insurance is usually the cheapest and the most short-term for of insurance that you can avail. This insurance is used to help secure the assets of the policyholder while he/she is travelling from one place to another. This policy is usually associated with the type of transportation acquired by the user for travel.read more..
The mortgage insurance works hand in hand with the mortgage type of loan. Banks often advise you to go for a mortgage insurance in case your personal investment in the mortgaged property is less than 20% of the total value of the property.read more..
In the world of internet, data protection and safety and major concerns for small and large businesses. The cyber-insurance helps in covering up the financial losses occurred to a company on the loss of data from their servers’ due to a hack or physical damage. The cyber-insurance is often availed by IT and cloud-computing companies.read more..
The pet insurance works just like a health insurance for your beloved pet. It covers the complete costs of medical check-ups and treatments required by your pet in case of an emergency. read more..
Several banks in India like ICICI bank, SBI Bank, as well as Punjab National Bank offer a one-stop solution for all your insurance, credit cards and loan needs. You can easily avail all 3 by creating a new account with the bank and submitting the necessary documents for all the 3 services at once.