An overdraft account is a type of credit facility offered by a bank in which one can overdraw funds, for example, write a cheque for Rs. one lakh when our account balance is zero. In this article, we discuss when it should be used.

When bank fixed deposits decreases, as usual, senior citizens ignore credit risk and chase after “high return corporate FDs”. The latest craze, Tamil Nadu Power Finance Fixed Deposit offering up to 9.11% return on a 36 to 60-month deposit for senior citizens. Here is what you need to know about these allegedly “Absolute Safety &…

Here is a FAQ on Small Finance Banks: Are they safe? Can I invest in their fixed deposits? How are they protected? What are the safeguards? What are these banks for? Let us find out. A FAQ on Small Finance Banks What are they? Small Finance Banks are Banks licensed by RBI under section 22 of…

What if my bank goes bust and does not repay my deposit? We all know that the money has insurance of only up to five lakh. How does this work? Who will step in when a bank fails and how do we get back the money? In this age of small finance banks, knowledge about…

Annualized yield is a notion associated most often with fixed deposits.  Many of us do not realize that it could be used with recurring deposits as well. It can be, and is used by many banks. FD yield though misleading, is at least correctly calculated. I am very uncomfortable with the way RD yield is…

The difference between annual yield and annual interest and how it can be used to misrepresent gains from fixed deposits is discussed. Let us face it, most investors are confused with the two percentages associated with a fixed deposit: annual interest and annual yield. Most people make the common mistake of assuming that the yield…

Here are updated versions of three fixed deposit calculators. FD calculator for investment tenure in months and years (tax to paid each FY and advance tax liability) minor bug fixed FD calculator for investment tenure in days (tax to paid each FY and advance tax liability) macro button added to stop and start calculations for…

Here is the online version of recurring deposit calculator on Microsoft’s Exel Web app. Thanks to reader Srinivas, I was able to correct a minor bug. I tried to convert it to Google Docs, but some cells showed incorrect values. This is quite disturbing because if one does not check each cell carefully then the…

Note: The variable RD calculator gives the total post-tax interest. I have assumed that only the variable payments are subject to a penalty. That is if a variable payment is not made before a certain date (reader Srinivas says it is 10th in his case) then interest on the variable payment for that month will…

It is a terrible idea to open a fixed deposit in your spouse’s name with your money. In general, this arrangement is a terrible idea with any taxable instrument. Terrible, because of the complex way in which the interest income will be taxed. Of course this is applicable only if you are a law abiding…