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One, even if banks link repo or t­bill yield. This under external bench­ ASK US lending rates to the same means that your lending marks. For instance, they external benchmark, the rate will be revised much could offer a steady EMI. resultant base rate would faster. In case of SBI’s Takeaway 3: Look at vary across banks initially home loan product, individual products and due to different spreads by changes to lending rates understand their struc­ each bank. happen immediately ture before deciding if For instance, consider (within a month of change predictability in EMIs is SBI and IDBI. Both banks in RBI’s repo rate). important to you. have already linked their Aside from quicker home loans to repo rate. transmission, this also im­ Existing borrowers But their RLLR varies. For plies other changes in The RBI has also allowed SBI, while the RLLR is your monthly payouts. existing borrowers under Aarati Krishnan 7.65% currently, for IDBI Under a regular home MCLR to move to the ex­ Q. My father is retiring on July 31. He wantsto Bank it is 8.3%. loan product, your equat­ ternal benchmarked­ invest ₹5 lakh. Please advise. While any action by the ed monthly instalment loans, without levy of any RISHABH DUBEY RBI in future will see lend­ (EMI) on home loan is fair­ charge or fee. Given that ing rates move higher or loans under the new struc­ A.The investment recommendation would lower by the same quan­ DDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDD ture will most likely be depend on his goals. Assuming his main tum in both banks, since cheaper than under objective is to protect his capital while New avatar the initial base rate is diffe­ MCLR, in a particular receiving a good return from this investment, ● Floating rate loans to he should consider the post office Senior po­linked home loan in Ju­ rent, the effective rate for be linked to repo rate bank, borrowers should Citizens’ Savings Scheme, which allows ly. Lending rates change borrowers would vary. consider making the individuals to invest up to ₹15 lakh of every time the RBI tweaks Two, banks arrive at the ● RBI rate actions will switch. retirement proceeds. The scheme has a five­ its repo rate. effective rate by assigning get transmitted almost However, do take note year lock­in period and pays interest at a fixed Easy on immediately The repo­linked a mark­up over the bench­ of any hidden charges rate every quarter. For July to September lending rate or RLLR mark. This is based on the (RBI has allowed some ad­ 2019, the interest rate stands at 8.6% per ● Loans to be cheaper changes from the first risk­profile of the borrow­ ministrative/ legal costs) annum. If your father invests before the end of than under MCLR September 2019, he stands to receive 8.6% of the following month er and could also differ before making the move. ● Monthly payouts to interest throughout his five­year holding in which the RBI chang­ across banks. In case of Also ensure that you are the pocket es its repo rate. With the SBI, for instance, while the change offered the same lending period. The account can be opened at many leading banks apart from the post offices. This RBI’s 35 bps repo rate cut spread is 40 bps, in the DDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDD rate as a new borrower un­ scheme is absolutely safe, being a Cheaper loans is good news in August, SBI’s RLLR has case of IDBI Bank the der the external bench­ Government of India borrowing. If your father for borrowers but they must look reduced to 7.65% since spread charged over and ly stable. Even when the mark regime. does not need regular cash flows, he can September 1 (from the 8% above its RLLR is zero in lending rate is reset based It may be prudent to al­ perhaps consider debt mutual funds investing out for spread and product structure earlier). case of borrowers with a on the latest MCLR, banks so weigh in the benefits. If in high quality bonds. But they carry market risks and pose some risk to capital. Hence, for home loans high credit score of 750 usually change the tenure you are nearing the end of up to ₹75 lakh, the effec­ and above. (lower the tenure in case your existing loan, it may Q. My husband and I want to support my tive interest rate for bor­ Though the effective of a fall in rates) of your not make sense to make parents and in­laws with a fixed monthly rowers with a good credit lending rate for SBI still loan rather than EMI — un­ the switch. If you do not amount. Please suggest investment plans Radhika Merwin funds­based lending rate). Ideally, when the RBI score works out to 8.05% works out cheaper, bor­ less you specify otherwise. care much for volatility in that would yield ₹10,000 per month. Lending rates on your There are several cuts or hikes the repo rate, (including mark­up of 40 rowers need to take note This, in effect, keeps your your EMIs, then consider SOUNDARYA N home, vehicle and perso­ nuances in the new struc­ banks’ MCLR should also bps over RLLR) currently. of the mark­up at all times. EMI steady. the move only if the inter­ A. Immediate annuity plans from life insurers nal loans could get cheap­ ture that borrowers need move in tandem. But given In comparison, the rate Takeaway 2: Borrow­ Under SBI’s RLLR, ho­ est savings are substantial. are usually the best way to secure a fixed (and er. Last week, the RBI to be wary of. that banks only source a on SBI’s MCLR­linked ers must take note of the wever, a minimum 3% of Also, as of now, it ap­ relatively risk­free) regular income for those mandated banks to link small portion (1%) of their home loan now is 8.65%. underlying benchmark the principal loan amount pears that the no­charge/ who cannot actively manage their money. new floating rate personal Better transmission deposits at RBI’s repo rate, Takeaway 1: Loans un­ and spread while finalis­ is repaid every year. Inter­ fee mandate applies only Under these plans, you pay a lump sum to an and retail loans to an ex­ Floating rate loans, wheth­ banks’ cost of funds re­ der the new external ing the loan, and then est charged on the loan is to a switch within the insurer who undertakes to pay a lifelong annuity (pension) as long as you live. ternal benchmark from er for buying a new house duce or increase by a benchmark structure will compare across banks. serviced monthly, based same bank. If you are mak­ However, the key disadvantage is they offer October 1, 2019. The exter­ or a vehicle, are pegged smaller amount (than re­ get cheaper if the RBI con­ on the lending rate effec­ ing a move from one bank very low returns (about 6­6.5%) compared to nal benchmark can be the against a particular bench­ po rate movement), limit­ tinues to cut rates. On the Reset rules tive at that point in time. to another, there could be bank deposits or debt mutual funds. If you are RBI’s repo rate, the 3­ mark. Until now, each ing the changes in MCLR. flip side, be prepared for a Under the external bench­ Hence, your EMI changes additional charges. interested in such plans, do check out LIC month treasury bill yield bank decided its bench­ Under the new repo­ higher payout when the mark structure, the RBI (in the following month) Takeaway 4: Switch to Jeevan Shanti, LIC Jeevan Akshay VI and HDFC or the 6­month treasury mark based on its cost of rate­linked system, RBI’s RBI starts hiking rates. has mandated that loans every time there is a external benchmark loans Life Immediate Annuity plan. bill yield. Up until now, deposits or borrowings. rate actions will get trans­ are reset at least once in change in RBI’s repo rate. only if the remaining te­ However, if you are targeting a ₹10,000 per loans were linked to the Given that each bank’s mitted almost immediate­ Base and spread three months — provided, For now, it is unclear nure of your loan is long month payout for the next ten years, you should consider the Pradhan Mantri Vaya bank­specific benchmark cost is different, MCLR al­ ly. Let us take the case of Borrowers should be wary of course, that there are how other banks will and interest savings are Vandana Yojana offered by the LIC. The — MCLR (marginal cost of so varied across banks. SBI. It introduced the re­ of two things. changes in the underlying structure their products substantial. scheme is currently open until March 31, 2020. Senior citizens, who have completed 60 years of age, can invest up to ₹15 lakh in the scheme to secure a monthly pension of ₹10,000 for FD FOCUS: BAJAJ FINANCE BLACKBOARD: MOBILE TRADING the next ten years. While the pension is calculated at prescribed rates, the effective return works out to about 8% per annum. A Investing while on the go ₹15­lakh investment fetches you a pension of A blend of safety and attractive rates ₹10,000 per month. On the policyholder surviving 10 years, the ASHISH RUKHAIYAR initial investment is refunded. On his or her popular platform for investors, death within 10 years, the beneficiary receives Company pays up to 8.6% interest, higher than what comparable NBFC deposits offer What is mobile trading? especially retail, to trade in the this refund. The scheme allows premature stock markets. Second, most surrender under exceptional circumstances. Parvatha Vardhini C ■ Mobile trading refers to trad­ new­age discount broking enti­ The pension received will be taxable if your Fixed­income investors with ing in the stock market using a ties prefer that their clients parents fall in the taxable income bracket. an appetite for risk can con­ mobile phone. Leading broker­ trade using their mobile apps, Q. I am an informal sector worker earning sider parking a portion of ages now offer apps to their which also help the brokerages ₹16,000 a month. I can save ₹4,000. What their surplus in the fixed de­ clients who can use them to lower their overhead costs by kind of investments should I make? posits of Bajaj Finance. The trade in shares, invest in mutual maintaining fewer dealers and RAHUL DHANI firm offers cumulative and funds or in initial public offers, relationship managers. A. If you would like your capital to remain non­cumulative options un­ and even monitor their portfo­ Trading apps of brokerages completely safe while you earn a guaranteed der its fixed deposit scheme. lio. While the Securities and Ex­ like Zerodha, 5paisa, ICICI Di­ return, you can consider recurring deposits The tenure ranges from 12­ change Board of India (SEBI) ap­ rect, Upstox, HDFC Securities, (RD) with banks or a Public Provident Fund 60 months with interest rates proved trading through mobile Angel Broking, Sharekhan and account (PPF). from 7.72% to 8.6% (see table). phones way back in 2010, trac­ Kotak Securities feature among An RD will be best if you would like to have The offer is rated FAAA/Sta­ interest rates have been fall­ rate of 8.7% . But it is not an at which the deposit is tion was hardly visible in the in­ the top apps in the finance cate­ greater flexibility to withdraw your money as ble by CRISIL and MAAA (Sta­ ing over the past few months. apples­to­apples comparison booked. However, it will be itial years as investors preferred gory in both Android and iOS. and when you need it. A PPF account will lock in your money for 15 ble) by ICRA denoting very Since interest rates are fall­ for two reasons — one, the te­ prudent for investors to to trade through their dealers or years but is an excellent option to save for strong degree of safety re­ ing and are expected to be be­ nures are not the same , and weigh other options availa­ relationship managers. Is trading on the mobile safe? your retirement. garding timely payment of in­ nign in the near­to­medium two, the 8.7% rate is offered ble at the time of maturity of But the last few years have If you are willing to take risk to your capital terest and principal and low­ term, a three­year time frame only on deposits made online this deposit and then take a seen the share of mobile trading ■ Brokerages invest a lot in and don’t need your money for the next five est credit risk. will enable investors to lock through the M&M Financial call on renewal. rise significantly, though it still technology nowadays and years, you can consider starting Systematic The minimum deposit is into higher rates now. Be­ Services website. accounts only for a small por­ hence, most trading apps have Investment Plans in aggressive hybrid mutual ₹25,000. The firm offers 0.25 sides, a three­year tenure is Investors can fill up an on­ About the company tion of the overall trading vol­ strong encryption and other se­ funds. These funds invest 65% of the money percentage points more inter­ ideal to scout for better rein­ line application form on the Bajaj Finance focuses on ume. As per BSE, mobile trad­ curity features so as to make the in stock markets and up to 35% in bonds and can get you to a double­digit return over time est for Bajaj Group staff, Bajaj vestment opportunities if the Bajaj Finance website or do an lending to consumer, rural, ing accounted for 5.1% of the trading experience quite se­ periods of five years­plus. Finance customers and exist­ rate cycle turns by the time electronic transfer of the SME and commercial seg­ total trading in August. cure. Most brokerages nowa­ But you should invest in such funds only if ing policyholders of Bajaj Al­ the deposit matures. amount they wish to deposit. ments, with consumer loans Two years ago, in August days have a chief technology of­ you can take a capital loss of 10­20% in some lianz Life Insurance. Senior ci­ The 8.6% offered by Bajaj The downloaded applica­ constituting 39% . Its assets 2017, the share of mobile trad­ ficer, which was unheard of a years when the stock market isn’t doing well. tizens get an additional 0.35 Finance is higher than what tion form with a photo and under management were at ing was pegged at 2.91%. few years ago. The apps are also percentage points. most comparable NBFC depo­ other required documenta­ ₹1,28,900 crore as of June regularly updated with security Investors not looking for sits offer. The interest rates for tion will be collected by a 30. Net NPAs stood at a low Why is mobile trading features, among other things. Readers can send in queries on personal finance and regular income can consider three­year deposits in m ost company representative. An 0.64%, and capital adequacy becoming popular? The strong level of security is investing to [email protected]. Our experts the 36­month cumulative op­ private and public sector instant online loan of up to ₹4 at a robust 19.48%. further corroborated by the fact who write on personal finance will answer these ■ queries. Moneywise will not give specific tion that offers 8.6% returns. banks stand at 6.5­7.75% at lakh is available against this (This column is for infor­ First, the increased penetra­ that some of the leading broker­ recommendations for investment in a particular With the RBI easing repo present. For a tenure of 33 deposit. Renewal of the depo­ mation purposes only and is tion of smartphones, along with ages now see more than 50% of mutual fund scheme, share or fixed deposit. rates by over one percentage months, M&M Financial Ser­ sit will fetch 0.10 percentage not a recommendation to the availability of cheaper data their active clients trade via point so far this year, deposit vices offers a slightly higher points over and above the rate invest) plans, has made the cellphone a apps instead of the web portal.

LOOSE CHANGE Bank fixed deposit rates Home loan interest rates . . . . Ravikanth Interest rates (%) Interest rates (%) Loan amount (₹) Loan amount (₹) Name of lender Name of lender Bank name Highest 1­year 3­year 5­year Bank name Highest 1­year 3­year 5­year Upto 30 lakh Above 30 lakh & Above 75 lakh Upto 30 lakh Above 30 lakh & Above 75 lakh upto 75 lakh upto 75 lakh Slab tenure tenure tenure Slab tenure tenure tenure . . . . (In %) (In %) PUBLIC SECTOR BANKS Axis Bank 8.90­10.60 9.05­9.55 9.10­9.55 SMALL FINANCE BANKS PRIVATE SECTOR BANKS Yes Bank 9.85­13.00 9.85­13.00 9.85­12.50 SBI (MCLR linked) 8.35­8.75 8.60­9.05 8.70­9.20 Kotak Mahindra Bank 8.60­9.40 8.60­9.40 8.60­9.40 Suryoday Small Finance Bank 8.75 8.35 8.75 8.25 Karnataka Bank 6.90 6.90 6.80 6.80 SBI (RLLR linked) 8.05­8.40 8.05­8.40 8.60­8.75 Karur Vysya Bank 8.80­11.55 8.80­11.55 8.80­11.55 Equitas Small Finance Bank 8.30 8.00 8.30 7.00 South Indian Bank 7.30 7.25 7.30 7.00 Bank of Maharashtra 8.50­9.00 8.50­9.00 8.50­9.25 Dhanlaxmi Bank 9.80 9.80 9.80 ESAF Small Finance Bank 8.25 8.25 7.30 7.30 Federal Bank 7.25 7.00 7.00 7.00 Canara Bank 8.50­8.60 8.50­8.70 8.50­8.75 HSBC Bank 8.65­9.15 8.65­9.15 8.65­9.15 Jana Small Finance Bank 8.60 8.50 8.50 8.00 Axis Bank 7.20 7.10 7.00 6.75 BoB (MCLR linked) 8.45­9.45 8.45­9.45 8.45­9.70 Standard Chartered >=9.41 >=9.41 >=9.41 Fincare Small Finance Bank 9.00 8.00 9.00 8.00 Karur Vysya Bank 7.00 7.00 7.00 7.00 BoB (RLLR linked) 8.35­9.35 8.35­9.35 8.35­9.60 Lakshmi Vilas Bank 10.05 10.05 10.05 Utkarsh Small Finance Bank 9.00 8.50 8.00 8.35 City Union Bank 7.00 7.00 6.85 6.85 PNB (MCLR linked) 8.50­8.70 8.50­8.70 8.55­8.75 Citi Bank(MCLR linked) 9.00­10.00 9.00­10.00 9.00­10.00 Ujjivan Small Finance Bank 8.30 8.10 7.50 7.00 Catholic Syrian Bank 6.75 6.75 6.50 6.50 PNB (RLLR linked) 8.25­8.30 8.25­8.30 8.30­8.35 Citi Bank (TBLR linked) 8.50­9.35 8.50­9.35 8.50­9.35 North East Small Finance Bank 8.75 7.25 7.25 6.75 Yes Bank 7.85 7.25 7.25 7.25 UCO Bank (MCLR linked) 8.50 8.50­8.60 8.65­8.75 DBS Bank <=9.50 <=9.50 <=9.50 AU Small Finance Bank 8.10 7.01 8.00 7.77 ICICI Bank 7.10 6.70 7.10 7.00 UCO Bank(RLLR linked) 8.30­8.40 8.30­8.40 8.30­8.40 City Union Bank 10.25­13.25 10.75­13.25 11.25­13.25 Capital Small Finance Bank 7.75 7.50 7.50 7.35 HDFC Bank 7.10 6.90 7.10 7.00 Indian Overseas Bank 8.50 8.60 8.75 Tamilnad Mercantile 8.95­9.20 8.95­9.20 8.95­9.20 Kotak Mahindra Bank 6.85 6.75 6.50 6.25 United Bank (MCLR linked) 8.40­8.55 8.40­8.55 8.40­8.55 PUBLIC SECTOR BANKS Jammu & Kashmir Bank 8.75 8.75 8.75­9.10 IDFC First Bank 8.00 8.00 7.50 7.50 United Bank (RLLR linked) 8.15­8.30 8.15 8.15­8.30 RBL Bank 10.30­12.15 11.65­12.15 11.65­12.15 Indian Bank 6.90 6.75 6.75 6.90 DCB Bank 8.00 7.00 8.00 7.75 Andhra Bank 8.50­8.55 8.50­8.55 8.60­8.65 Syndicate Bank 6.70 6.50 6.50 6.50 RBL Bank 7.75 7.70 7.50 7.50 Punjab & Sind Bank 8.50 8.50 8.75 HOUSING FINANCE COMPANIES (HFCs) Bank of Maharashta 6.00 6.00 5.75 5.50 Bandhan Bank 7.65 7.35 7.65 7.65 Syndicate Bank (MCLR linked) 8.35 8.35 8.35 HDFC Ltd. 8.40­8.95 8.75­9.30 8.80­9.35 State Bank of India 6.70 6.70 6.25 6.25 Dhanlaxmi Bank 6.90 6.90 6.50 6.50 Syndicate Bank (RLLR linked) 8.25­8.85 8.15­8.85 8.15­8.70 PNB Housing Finance 9.25­11.50 9.25­11.50 9.25­11.50 Andhra Bank 6.60 6.60 6.50 6.50 Lakshmi Vilas Bank 7.60 7.50 7.50 7.25 Union Bank (MCLR linked) 8.60­8.95 8.60­8.95 8.65­9.25 Indiabulls Housing Fin 8.80­12.00 8.80­12.00 8.80­12.00 Canara Bank 6.50 6.50 6.25 6.25 IndusInd Bank 7.50 7.50 7.35 7.35 Union Bank (RLLR linked) N.A. 8.25­8.30 8.30­8.35 LIC Housing Finance 8.80­9.05 8.95­9.15 9.05­9.15 Bank of India 6.50 6.50 6.50 6.50 Tamilnad Mercantile Bank 7.10 7.10 6.75 6.75 Bank of India 8.45­9.35 8.45­9.35 8.45­9.35 Union Bank of India 6.75 6.75 6.40 6.45 Hero Housing Finance >=9.75 >=9.75 >=9.75 Corporation Bank 8.60­8.80 8.60­8.80 8.60­9.05 Piramal Capital & Housg. >=9.00 >=9.00 >=9.00 Indian Overseas Bank 6.80 6.60 6.80 6.80 Central Bank of India 8.30 8.30 8.30­8.55 Corporation Bank 6.90 6.80 6.50 6.50 FOREIGN BANKS IIFL >=10.25 >=10.25 >=10.25 IDBI Bank(MCLR linked) 8.60­9.20 8.60­9.20 8.90­9.20 Bajaj Finserv 8.60­11.15 9.05­11.15 9.05­11.15 Allahabad Bank 6.75 6.60 6.35 6.35 Citi Bank 5.50 5.25 5.50 5.50 IDBI Bank(RLLR linked)* 8.30­8.45 8.30­8.45 N.A. Reliance Home Finance 9.75­13.00 9.75­13.00 9.75­11.00 IDBI Bank 7.05 7.05 6.75 6.75 Deutsche Bank 8.00 6.50 7.00 8.00 Allahabad Bank 8.40­9.40 8.40­9.40 8.45­9.40 Aditya Birla Capital 9.00­12.50 9.00­12.50 9.00­12.50 Central Bank of India 6.60 6.60 6.45 6.45 HSBC Bank 6.00 5.00 6.00 5.00 GIC Housing Finance 9.10­12.50 9.10­12.50 9.10­12.50 United Bank of India 6.50 6.50 6.25 6.00 DBS Bank 7.25 7.25 6.75 7.00 PRIVATE SECTOR BANKS Repco Home Finance >=9.25 >=9.25 >=9.25 “A penny saved is a penny earned, they say! Bank of Baroda 6.60 6.45 6.45 6.25 ICICI Bank 8.60­9.00 8.60­9.10 9.10­9.20 But it is not true the other way round!” Punjab National Bank 6.60 6.60 6.50 6.50 Tata Capital >=9.25 >=9.25 >=9.25 FD rates as on September 5, 2019 . Karnataka Bank 8.90 8.90 9.00 *Applicable from 10th Sept. 2019; Rates as on 5th Sept. 2019 UCO Bank 6.50 6.50 6.40 6.40 Source: paisabazaar.com Bandhan Bank 12.41­13.33 12.41­13.33 12.41­13.33 Source: paisabazaar.com

CM A ND-NDE YK