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ELSS Explained: Full Form, Lock-in Period & Withdrawal Process

If you’re wondering ‘what is ELSS mutual funds’ and why they are such a popular tax-saving option, here’s a quick answer: An Equity-Linked Savings Scheme (ELSS) is a mutual fund that lets you enjoy dual benefits – wealth creation and tax savings. The ELSS mutual fund full form is Equity-Linked Savings Scheme and these funds primarily invest in equity (shares and securities). They come with a 3-year lock-in period, the shortest among all tax-saving instruments under Section 80C.

Since ELSS returns depend on the stock market, the risk is higher compared to fixed deposits or PPF. But if you stay invested longer, the potential returns are usually much more attractive. This makes ELSS a smart choice for those who want to grow their money and reduce tax liability at the same time.

What are ELSS Mutual Funds?

ELSS funds combine the benefits of stock market growth with tax deductions. Your investments qualify for tax savings under Section 80C of the Income Tax Act, 1961.

List of ELSS Mutual Funds

Some popular ELSS options you can explore are:

Axis Long Term Equity Fund

Mirae Asset Tax Saver Fund

HDFC Tax Saver Fund

ICICI Prudential Long Term Equity Fund

SBI Magnum Tax Gain Fund

Things to Consider Before Investing in ELSS

Before choosing ELSS, keep these points in mind:

Compare returns of different ELSS schemes

Check the fund house track record for stability and past performance

Prefer funds with a low expense ratio

Decide between SIP or lump sum investment

Remember that each SIP instalment has its own 3-year lock-in

Features of ELSS Mutual Funds

Here’s why ELSS is a preferred choice:

3-year lock-in (shortest among all Section 80C investments)

Higher return potential due to equity exposure

Flexibility – start with small or large amounts

Diversification across equity and debt instruments

Tax savings up to ₹1.5 lakh under Section 80C

How Does ELSS Funds Work?

When you invest in an ELSS, most of your money goes into equities and a smaller portion may be allocated to debt. This balance provides growth potential while managing some risk.

Since returns are market-driven, they are not guaranteed. However, holding your investment for longer than the 3-year lock-in generally gives better results, as equities tend to perform better over time.

How Should You Invest in an ELSS Fund?

You can invest in ELSS in 3 simple ways:

SIP (Systematic Investment Plan): Invest small amounts monthly for discipline and market averaging.

Lump Sum: Invest a large amount at once if you have surplus funds.

Goal-based: Align investment with your financial goals (tax savings, long-term growth, etc.).

Why Should You Invest in ELSS Tax Saving Mutual Funds?

The benefits of investing in ELSS include:

Dual advantage: tax savings + wealth growth

Shortest lock-in (3 years) compared to PPF (15 years) or NSC (5 years)

No upper cap – invest any amount as per your comfort

Exposure to equities for higher long-term gains

Option to stay invested even after 3 years for compounding

Taxation Rules of ELSS Funds

Here are the key ELSS funds withdrawal rules and taxation details:

Eligible for deduction up to ₹1.5 lakh under Section 80C

LTCG Tax: Gains above ₹1 lakh in a financial year are taxed at 10%

Gains up to ₹1 lakh remain tax-free

Dividends are taxed as per your income slab

These ELSS mutual fund withdrawal rules make it clear that ELSS is tax-efficient for long-term investors

How to Withdraw From ELSS?

Here’s how to redeem ELSS mutual funds once the lock-in ends:

Wait until the 3-year lock-in is over.

Place a redemption request with your fund house.

The amount will be credited directly to your bank account.

For SIP, each instalment has its own 3-year lock-in.

Instead of breaking investments early, continue beyond 3 years to benefit from compounding.

(Knowing the ELSS funds withdrawal rules helps you plan your liquidity needs better.)

Instead of redeeming your ELSS early, you can unlock liquidity without breaking investments. With Fibe Loan Against Mutual Funds, you can get quick access to funds up to ₹10 lakhs by pledging your mutual fund units, keeping your investments intact while meeting urgent financial needs. Apply easily online with minimal paperwork.
Download the Fibe App today!

FAQs on ELSS Withdrawal Rules and Tax Benefits

Is ELSS a good investment?

Yes. ELSS is popular because it offers tax savings and wealth creation. Ideal for long-term investors with moderate-to-high risk appetite.

Is ELSS better than PPF?

ELSS has market-linked returns and a 3-year lock-in, while PPF has fixed returns and a 15-year lock-in. Choose based on your risk tolerance.

Can I invest ₹1 lakh in ELSS?

Yes, there’s no maximum cap. Some funds may have a minimum entry requirement.

What is the lock-in period of ELSS?

ELSS has a 3-year lock-in period.

Is ELSS taxable after 3 years?

Yes. Gains above ₹1 lakh are taxed at 10% LTCG, while up to ₹1 lakh remains exempt. Dividends are taxed as per your slab.

What is Value Added Tax in India and How It is Calculated

If you’re curious about the full form of VAT tax, here’s your answer: VAT stands for Value Added Tax, meaning a tax collected at each stage of production and distribution of goods. While the Goods and Services Tax (GST) has replaced most indirect taxes since 2017, some goods still fall under the old VAT system.

Here, we will help you understand the value added tax meaning, how it works and where it still applies today. Keep reading to get clear insights into VAT and its role in India’s taxation system.

Value Added Tax (VAT) Meaning

It is a type of indirect tax that the Central Government levies on sold goods. VAT is collected starting from manufacturing till the sale is completed by the retailer. It works in such a way that the consumer at the end of the supply chain pays a higher tax amount.

Value-added tax is a multi-point check system for collecting tax at each point of purchase.

When dealers collect the tax amount from the consumer, they pay back to the government.

Before paying the government, they deduct the tax paid for the purchase, which eliminates the tax-on-tax effect.

The VAT law changes depending on the state and Union Territory.

There are certain gods that are exempt from VAT.

The list of goods and their threshold limit varies from state to state.

Also Read: Direct Tax vs Indirect Tax

Understand How it Works

Knowing what is VAT and having a brief knowledge of input and output tax can give you a clear idea of how value-added tax works.

Input Tax

It is the tax amount paid by the dealers during their purchases.

VAT is not only applicable to goods that are purchased for resale.

It is also applicable to capital purchases such as machinery and equipment.

Most of these purchase comes under value-added tax (VAT) application.

However, in most cases, companies can claim VAT credit.

Output Tax

It is the tax amount paid by the consumer while purchasing taxable goods from dealers.

Anyone registered for VAT can collect the tax amount; it may be an individual, business or partnership.

If you make a sale more than the prescribed limit of ₹5 lakhs or ₹10 lakhs, depending on the state, you should opt for VAT registration.

The registration of VAT means enrolling your company in the list of corporations that are eligible for tax returns. It is mandatory for all manufacturers involved only in the production of goods and services to register for value-added tax (VAT).

VAT is different from sales tax, and is charged at various stages of the production process. On the other hand, sales tax is charged at the end user purchase of goods and services.

What is VAT Registration?

Here are some key points to remember when registering for VAT:

Mandatory for businesses selling goods that still attract VAT

Submit ID proof, business proof, PAN, and bank details

Get a VAT registration number (TIN)

Legally collect VAT, claim input credit, and file VAT returns

What is the Procedure for VAT Online Registration?

Visit your state’s commercial tax department website.

Create an account or log in as a new user.

Fill out the online VAT registration form with business details.

Upload required documents (ID proof, address proof, business proof).

Pay the applicable registration fee online.

Submit the application and note the acknowledgment number.

Schedule an inspection if required by the department.

Once approved, download your VAT registration certificate.

Also Read: What is Advance Tax?

VAT Rates in India

1% – 5%: Essentials like food grains, medicines, and certain daily-use items

12.5% – 15%: General goods like electronics, furniture, etc. (varies by state)

20% and above: Specific goods like liquor and petroleum products

Varies by State: Each state sets its own VAT rates for certain goods not covered under GST

How is VAT calculated?

Using a simple calculation formula, you can calculate value-added tax:

VAT= Output Tax – Input Tax

For example, say a dealer pays a value-added tax of 10% on the purchased goods at ₹100. Then, s/he sold the product at ₹150 to you, collecting a VAT of ₹15 from you. Then, the input tax here is ₹10, and the output tax is ₹15. Hence, the dealer has to pay only ₹5 as VAT while purchasing the goods.

With this example, you have a clear financial understanding of how indirect tax works. Whether you run a business or have a job, taxes can weigh on your income. If you’re dealing with a cash crunch or need to achieve a life goal, the Fibe Quick Cash Loan is an excellent choice. It offers up to ₹5 lakhs which you can repay across flexible tenure of up to 36 months.

It also comes with the option to pre-close the loan without any penalties. You can get it with nominal paperwork and affordable interest rates. Register on our website or download our Fibe Loan App to get a quick loan online.

FAQs on Value Added Tax

Can I claim VAT back on business expenses?

Yes, you can claim VAT on business expenses after registering your business for VAT.

Are there any exemptions from VAT?

The VAT law changes depending on the state and union territory. Depending on the VAT law, some goods and the threshold limit for exemption are exempted from VAT.

Where can I find more information or get help with VAT issues?

You can get information from the Goods and Services Tax, CBIC, and Government of India and register any complaint related to VAT issues.

What happens if I miss the VAT return deadline?

In case of delays in filing the return, you shall be liable to pay ₹100 per day, for which the maximum amount is calculated quarterly.

Everything You Need to Know About API Banking Services

Banks with APIs are offering enhanced experience. Many fintech firms appreciate API and the ground-breaking effectiveness it entails. They also have implemented this third-party communication method, which helps in:

Centralising consumer data
Improving security
Quickening development
Better scalability

This one tool is modernising the banking system globally and in India. To understand what is API banking and how it benefits the banking system, read on.

What is API Banking?

The API full form in banking is Application Programming Interfaces. This is a technology that bridges the client with their banks. Designed with a combination of rules and protocols to prioritise interactions optimally, APIs help consumers access banking services more conveniently.

How API Works

Here are some aspects of how API banking helps consumers.

Easy Updates: Banks with APIs update individual components of their systems without affecting the entire infrastructure.
Isolated Changes: APIs ensure that the overall system remains stable and reliable, even during periods of development or maintenance.
Seamless Integration: They provide a standardised way for different systems to interact, making it easier to integrate new services or applications.
Small Improvements: APIs enable banks to implement small, incremental improvements to their systems, which is a less risky approach than large-scale overhauls.

Types of APIs

There are majorly four types of APIs. Every kind of API offers a specific usage, the details of which you can find below:

Public API: This is a third-party tool used for smoother interactions
Private API: It ensures security and optimises organisational tasks
Composite API: This type of API enhances performance and ensures speed
Partner API: This is a communicative device between developers and financial organisations

Benefits of API Banking

There are several significant advantages of using API in banking systems, such as:

Banks with APIs show real-time access to transactions
They offer better traffic to the banking institution
APIs hasten consumer data access
They simplify access to multiple applications and prompts
They enhance connectivity between transactional and financial accounts
APIs provide better security with diversified ways to develop an app

Apply for Instant Cash Loan

Differences Between Open Banking and API Banking

While API banking is a comprehensive way to approach a customer, open banking is another technological advancement changing the financial ecosystem. Open banking is a concept that allows you to share certain financial information within banks. Check out how APIs in banking and open banking differ from each other:

Parameters	Open Banking	API Banking
Aids	Tailors investment plansReal-time updatesPrice comparisonsSaving NotificationsTips on budget	Core Banking System (CBS)Customer onboardingPayment InfrastructureCustomer engagement support
Benefits	Better reimbursementEclectic borrowing optionsFlexibility of your financesBetter business opportunities	Easy integrationBetter scalabilityData exchange accessibilityBoosts connectivityFast-to-marketNew revenue streams

The power of API banking means seamless integration of banking services into your everyday life. For instance, leveraging India Stack, the largest API in the world, Fibe fast-tracks the loan disbursement process.

Once you apply for a Fibe Instant Personal Loan, you can get up to ₹5 lakhs at an affordable interest rate. The repayment tenure is also flexible, as you can repay your loan within 3 to 36 months. You can be debt-free earlier with zero foreclosure charges. Download our Personal Loan App or register on our website to get started.

FAQs on API Banking

Are there any additional fees for using API banking services?

Typically, customers do not have to pay additional charges directly to utilise API for different banking services.

Can I use the API for international transactions?

Yes, APIs connect financial institutions across borders, making it easier for customers to make quicker international payments.

How do I ensure that my API integration is scalable?

To ensure that API integration is scalable, you can:

Implement caching mechanisms
Utilise rate limiting
Leverage cloud services
Conduct thorough testing to handle increasing traffic and diverse usage scenarios

How do I report security vulnerabilities or issues with the API?

You can find several tools online that will scan and identify any common vulnerabilities. You need to review your code and monitor your API before there are any potential threats.

A Simple Guide to Understand Credit Card Fuel Surcharge Waiver

Fuel prices are increasing, and with credit card fuel surcharge, the amount increases significantly. This is why getting a credit card that offers a fuel surcharge waiver is in demand. Such cards not only help you pay for fuel but also avoid unnecessary fees.

The good news is that you can get this feature on most cards these days. Thus, you don’t need to limit yourself to a fuel credit card to enjoy higher savings. Read on to learn how to use it efficiently and the top 5 options you have.

What is a Fuel Surcharge Waiver?

A fuel surcharge is a small amount of money that your credit card charges on your bill. This is an additional fee that credit cardholders need to pay to use a credit card at the fuel station. It is up to 1% – 3% of the fuel purchase amount. So, if you buy ₹4,000 worth of fuel, you need to pay ₹4,040 to ₹4,120 in credit card bills.

How Does Fuel Surcharge Waiver Work?

Credit card fuel surcharge waiver is a feature that encourages you to use your card for everyday fuel purchases. It reduces the cost of buying fuel eliminating avoidable charges that are added to credit card usage. To learn whether your credit card has this benefit, you can read the terms and documentation sent with your credit card kit.

Once you understand the fuel surcharge waiver meaning, you can choose the right card for your commuting needs.

Also Read: Credit Card Bill Payments

5 Best Fuel Surcharge Waiver Credit Cards

Fuel prices in India are continuously fluctuating. In this scenario, having any of these credit cards will help.

Credit Cards	Exclusive Offers
Fibe Axis Bank Credit Card	1% fuel surcharge waiver on fuel spends between ₹400 and ₹5,000Earn 3% cashback on dining, entertainment and local commute 4 complimentary visits to airport lounges
IndianOil Citi Titanium Card	Earn 4 TP per ₹150 on fuel purchase 1 TP is equal to ₹1 worth of fuel 1% surcharge waiver IndianOil outlets
IndianOil HDFC Bank Credit Card	Earn 1 Fuel Point for every ₹150 spent1 FP is equal to ₹0.20 worth of fuel1% fuel surcharge waiver IOCL fuel stations
ICICI Bank HPCL Coral Credit Card	2.5% cashback on HPCL fuel stations on bills of ₹500 or more1% surcharge at HPCL pumpsAnnual fees waiver on transactions over ₹50,000
Standard Chartered Super Value Titanium Credit Card	5% cashback on your fuel spends1 reward point on every ₹150 spent on all eligible transactions Enjoy annual fee waiver on buying over ₹90,000 worth of fuel annually

Eligibility for Fuel Surcharge Waiver

To get credit card fuel surcharge benefits, the issuer has some criteria you need to fulfil. These are as follows.

These waivers are available at designated fuel stations only
With few credit cards, you need to make a transaction over the minimum amount
Most credit cards have an upper limit for the maximum petroleum surcharge waiver limit

How to Maximise Fuel Surcharge Wavier?

To make the most of this benefit, you need to invest some time in searching for the right card with benefits matching your requirements. Here are some tips to elevate your fuel benefits with your credit card.

Use the credit card at the partner fuel stations for the highest waiver
Keep track of your transactions to stay within the monthly limit
Compare and choose the credit card with maximum benefits
Opt for a card that gives you frequent promotional offers
Choose the card that allows you to combine offers to maximise savings

Apply for Personal Loan

Credit cards with fuel surcharge wavier are one way to save on added costs and stay within your monthly budget. There are many other factors and benefits you need to compare before applying. If you are looking for a card that gives you fuel and many other benefits, consider the Fibe Axis Bank Credit Card.

It comes with an added layer of security, as it is a numberless credit card. Since the card details are not printed on it, you can prevent misuse of your card. You can even link your card with any UPI app to make sure and hassle-free transactions.

Enjoy up to 3% cashback on all transactions with additional dining benefits without any annual or joining fees. Download the Fibe App now to apply for it with an easy online process.

FAQs on Fuel Surcharge Wavier Credit Cards

Is the fuel surcharge waiver applicable at all fuel stations?

A petrol surcharge waiver option is only available at the partner fuel stations of the credit card issuer.

Is there a limit on the amount of fuel surcharge that can be waived?

Yes, all credit cards come with an upper limit for a surcharge waiver. Check the MITC document to know the cap on this benefit.

How frequently can I avail of the fuel surcharge waiver?

Until you hit the upper limit for the maximum surcharge waiver, you can enjoy its benefits as frequently as you buy fuel.

Can I transfer the fuel surcharge waiver benefit to another card?

You cannot transfer these benefits to another credit card. Each card will have its exclusive offers, which you can access using it.

Can I get a refund for the fuel surcharge if the waiver was not applied correctly?

These are non-refundable benefits. However, you can talk to the customer care of the issuer in case it is not applied correctly.

Know About Contactless Payments and Its Quick Set Up on Your Smartphone

Completing a contactless transaction when paying for any goods or services can be a safer way to go about it. This was popularised after the pandemic and includes the usage of credit and debit cards during payment offline, allowing you to pay without any physical contact.

There are many options to make effortless payments through your smartphone. It has become the new norm today, yet many are unaware of its full potential. By having a better understanding of how this works, you can make payments without any hassle.

Brief Introduction to Contactless Payments

It is a safe and secure method of making payments without cash. You can use your chip-enabled cards, such as credit and debit cards, for payment. While making a contactless payment, you can tap or wave your card over the card reader.

You can make payments faster without providing your PIN using such payment methods. This can enhance your checkout speed while paying toll tax, paying for parking and more. Due to an increase in the adoption of contactless payments, the RBI has increased the payment limit transactions from ₹2,000 to ₹5,000 without the need for a PIN.

Benefits to Keep in Mind

It is commonly misunderstood that contactless payments may pose a security threat, revealing the card’s information. The truth is that it is difficult for unauthorised logins as the card’s data is encrypted. This offers you more safety in carrying out such payments.

Fraudsters can steal your information from your magnetic chip by cloning it but tapping your card protects you against handing over your card. Additionally, swiping a card manually and entering your card details is a hassle and increases the risk of fraud. Thus, contactless transactions can cut down the processing time while ensuring better protection.

Another benefit of such payments is that you also pay using your smartphone or mobile. This is extremely beneficial when you want to make an urgent payment but forget your card at home. This involves using your UPI ID and an app that is connected to your bank account. You only have to scan the QR code using your smartphone and complete the transaction by entering the OTP or PIN on your own device.

Also Read: How to Create UPI ID?

Mechanism of Contactless Payments

Non-UPI contactless payments use radio frequency identification technology embedded in a card’s microchip. This makes the process successful without needing the personal identification number. When you hold the card near the point-of-sale terminals, the merchant identifies this with a special symbol.

The symbol resembles a wifi logo. Holding the card near the terminal transmits information electronically from the card to the bank. After accepting the tap, it signals success with a beep or light. The bank analyses the transaction and upon approval, the transaction is completed.

How to Set It Up on a Smartphone?

Now that you know the process and meaning of contactless transactions, you can use this facility smartly. To get going, you can set it up on your smartphone. This one-time set-up will enable you to access quick and safe transactions with just a tap. Follow the steps to set tap-and-pay on your smartphone:

Step 1: Log in to your official net banking account or mobile application

Step 2: Select the ‘tap and pay’ option

Step 3: Enable the option

Step 4: Make it the default

Also Read: How to Identify Financial Fraud?

Contactless payments offer flexibility and security and may bring even more innovation to the fore in the near future. Today, you can combine the comfort of using credit cards with the safety and security of mobile phones via UPI.

If you’re looking for a credit card that offers such convenience, the Fibe Axis Bank Credit Card can be a smart choice. It is India’s first numberless credit card that links to your UPI ID, so you can scan and pay in seconds.

What’s more, you earn a flat 3% cashback on entertainment, local commutes and food. Get complimentary domestic lounge access and fuel surcharge waiver discounts with this credit card, too. Download the Fibe App or register on our website to get the Fibe Axis Bank Credit Card today!

FAQs on Contactless Payments

Are there limits to contactless payment transactions?

Yes, there is a limit of ₹5,000 on contactless transactions without using a PIN. For a higher amount, you need to provide your PIN.

What should I do if a contactless payment fails?

If your contactless payment fails, try a UPI app that is linked to your bank account. You can also get in touch with the financial company whose card you are using.

How do I deactivate contactless payments on my card?

You can deactivate it on your card by logging into your account and turning off the functionality.

Can I use my contactless payment card with a damaged chip?

No, you cannot use your card for contactless transactions with a damaged chip.

Know How To Pay Rent With a Credit Card and Its Benefit

Wondering how you can pay rent with a credit card? Paying for recurring expenses without any hassle of remembering the due dates is among many attractive features of using credit cards. You can pay the monthly amount directly to your landlord’s account using a credit card.

Apart from the convenience, there are several other benefits attached to the payment process. By understanding the process properly, you can take maximum advantage of using a credit card to pay rent.

Advantages of Rent Payment With a Credit Card

Amongst the other responsibilities, certain routine payments may get overlooked due to your busy lifestyle. You can enjoy stress-free home rent payments by setting a standing instruction for rent payments. Here are a few added benefits:

Utilising the Grace Period: You can make use of the interest-free period of 45-60 days and repay the dues over an extended period. It can be most helpful in case of emergencies, as you can use the grace period as a financial buffer. This flexibility helps you allocate funds towards other liabilities for the month during a cash crunch.

Earning Rewards: By paying rent with your card, you can earn reward points, cashback and discounts. Ensure you select a credit card that provides a lucrative reward system on bill payments. That way, you can save more while paying the rent.

Making Use of Automatic Payments: By using the auto-debit facility for rent, you provide standing instructions on your credit card to make rent payments on a particular date every month. This ensures seamless deductions and eliminates any chance of missing your payment date.

Earning Welcome Bonus: Many issuers provide a sign-up bonus when you get the card. You can access the bonus by spending a specific amount in a certain amount of time. By paying rent using your card, you can cover a large amount of the required threshold. That way, you can earn the sign-up bonus without overspending.

Getting a Statement as Proof: You receive a statement showcasing your payment. This can act as proof of rent payment should you need to send it to your landlord. In addition, paying your rent this way also enhances your credit score. This is because timely payments are recorded in your credit history and reflect positively in your records.

How to Pay Rent Using a Credit Card?

By following the needed steps, you can ensure a smooth payment procedure:

Step 1: Confirm with your landlord whether they’re accepting rent payments via credit card
Step 2: Choose a secure and safe platform to pay rent, create an account by providing your details and link your credit card
Step 3: Set the necessary details like due date, amount and landlord’s details
Step 4: Check the details and confirm the payment

It is crucial to note that some third-party platforms may charge transaction or processing fees. Despite the convenience, this may outweigh the related benefits. Check this before proceeding with such an option. Besides that, you should keep an eye on your credit limit for other expenses, as there is a chance of maxing out. This can have an adverse effect on your credit score.

As of 2024, many credit card companies have stopped offering rewards on rent payments. This is also due to the fact that the Reserve Bank of India has expressed its concerns about payments between two individuals rather than an individual and a verified merchant. Such payments may be misused, which is why this facility may soon be banned.

While it is still allowed, knowing how to pay rent using a credit card can help you during a difficult time or increase your convenience. You can also use your credit card for various other payments, such as electricity bills, phone bills and more. The Fibe Axis Bank Credit Card can be an excellent choice for such recurring payments with an interest-free period of up to 50 days.

You can also enjoy hassle-free UPI payment and other benefits like a 1% waiver of fuel surcharge and free access to domestic airport lounges. Download the Fibe App or register on our website to apply for this credit card and enjoy its benefits without any annual and joining fees!

FAQs on Rent Payment Using Credit Cards

Can I earn reward points or cashback when paying rent with a credit card?

As of 2024, most financial institutions have discontinued reward points or cashback if you use a credit card to pay rent. However, you may be able to access benefits if you use certain third-party platforms or certain cards.

Are there any limits on the amount I can pay with a credit card?

Yes, you can only make transactions within your credit card’s credit limit as well as the limit the issuer has set on rental payments, if any.

Is it safe to pay rent with a credit card?

Yes, it is safe to pay rent with a credit card. The transaction also gets recorded in the card statement that you receive at the end of the month.

Are there any specific credit cards that offer better benefits for rent payments?

Since the features are updated often, check the benefits related to rent payments by reading the MITC document on credit cards.

How does paying rent with a credit card impact my credit card balance and utilisation?

When you make any transaction using your card, including rent payments, your credit limit is reduced by the corresponding amount. Therefore, you can only use your card up to the remaining credit limit for that particular cycle. Similarly, depending on your credit limit and rent amount, your credit utilisation ratio may also increase.

How to Invest as a Beginner: A Complete Guide

To find the best option for investment as a beginner, build your knowledge base and understand your risk appetite. For the best results, strive to strike a balance between secure investments and diversification. Depending on your investment horizon and risk appetite, you can consider a wide variety of instruments available in India.

As a beginner, you will require a dynamic strategy based on your ever-evolving financial aims and circumstances.

Top Investment Options in India:

Real Estate

It is one of the best option for investment and the most popular choice offering growth and wealth-building opportunities. It is a trusted choice as it has given stunning returns over the years. There are numerous options available to you, such as:

Investing through REITs
Buying a commercial property
Investing in a residential property

While there is no minimum limit or maximum cap, remember that you may need a large sum for the initial investment. Returns may vary depending on the market value and location. Like every investment option, it has its own set of risks and drawbacks.

For one, it’s difficult to liquidate by finding the right buyer and selling the property. In case of a rush, you may have to sell it at a highly discounted value. Nevertheless, in most cases, it gives some of the best returns on investment.

National Pension Fund

This is a contribution scheme which works both as a savings and a retirement fund. It is market-linked, has gained more demand over the years and is recommended among top investment options today. The government is adding improved features and benefits to encourage more investors, making it a lucrative option.

It offers you:

Tax benefits
Regular pension income

You can choose where you want to allocate your assets. However, it is crucial to note that in NPS, the maximum equity allocation can be 75% by the age of 50 years and it has a lock-in period.

Also Read: Tax Benefits Under NPS

Government Bonds

To encourage more investment in sovereign bonds, the Government of India offers direct purchase of bonds to investors. Both state and central governments issue these bonds.

The bonds issued by the state government are state development loans
The bonds issued by the central government are referred to as G-sec or simply government bonds

Yon needs a bank account and a demat account to hold a government bond, similar to any other investment. If you are looking for a relatively secure and best option for investment, consider this.

You can also invest in government securities through mutual funds. The maturity period can be three years or more, depending on the offering. Taxation on government bonds works based on your income bracket and applies to the interest-generated bond. It has a fixed return throughout the bond’s life cycle till the maturity period. All these factors make it one of the best options to invest in India.

Apply for Cash Loan

Sovereign Gold Bonds

To access this kind of investment, you don’t need to buy physical gold as an underlying asset. If you are looking for an investment with higher returns, this may be the ideal one for you. It is issued by the RBI at regular intervals through both public and private sector banks. You can also invest using your demat account. It has a maturity period of 8 years.

For individual investment, you can invest up to the price of 4 kgs of gold. Interest earned on SGBs is taxable, whereas the maturity amount is exempt from taxation. It has low to medium risk, making it one of the best options to invest in India.

Considering the increasing inflation rate, choosing an investment with higher returns can be a smart choice. Investing is built on a bedrock of savings, which you can boost through a smart financial tool like the Fibe Axis Bank Credit Card. It is India’s first numberless credit card and gives you Enjoy 3% cashback on your transactions.

It also links to your UPI ID, so it gives better security against credit card fraud and identity theft.

You can get access to domestic airport lounges and fuel surcharge waiver discounts, too. Download the Fibe App or register on our website to get the Fibe Axis Bank Credit Card today!

FAQs on Top Investment Options for Beginners

What are the risks associated with beginner investments?

For beginners, choosing the best ROI investments can be difficult. It is with experience and knowledge that you can build a successful and profitable investment portfolio. Some of the risks you may face are losing your capital, letting your emotions get in the way of long-term investments and pursuing trends without understanding market dynamics.

Should I invest in stocks or mutual funds as a beginner?

It may be more appropriate to invest in equity mutual funds as a beginner since the fund manager has experience in allocating your investment to the right stocks and sectors.

Should I diversify my investment portfolio as a beginner?

Yes, you can diversify your portfolio in terms of maturity period, tax savings, risk exposure and other factors and get the best returns for investment.

Difference between Mobile Banking and Online Banking

When it comes to convenience in financial services, both mobile banking and online banking play a vital role in offering instant access and data. While online banking has been around for longer, mobile banking is relatively new. Both options provide access to financial services but have their separate advantages.

Many financial institutions offer both services to add more value to your banking experience. By understanding the similarities and differences between online banking and internet banking you can decide what to use and when.

Digital Banking Vs Mobile Banking

Using both, you can access numerous services from the comfort of your home or on the go. This includes:

Checking account balance
Paying credit card bills
Paying loan EMIs
Tracking credit card due amount and date
Setting up your mutual fund investment
Booking a fixed deposit
Checking the transaction history of credit card or account

The list goes on. To enjoy both, internet banking and mobile banking facilities, you need to log into your account with your customer ID and password. These credentials are a must every time you log in. However, you can set up a login PIN for mobile banking to save time and gain access faster and more conveniently.

Benefits of These Facilities

Here are some factors that you can consider when comparing the benefits of these two banking options.

Convenience

Both facilities require an internet connection to function. However, in the case of Internet banking, you need a laptop or PC. While you can use a smartphone, the experience may not be fully optimised for it. Via mobile banking, you can conduct financial transactions through your mobile phone with ease.

Many financial institutions have come up with an SMS feature that you can use to avail some features of mobile banking. Hence, you can conduct a few activities even without the internet. This can be helpful during travelling or if you are in a region where internet access may be impaired.

Safety

Both services have their own security measures. In the case of internet banking, the financial institution provides you with:

Username
Password

You may need one-time passwords or security tokens for added safety. In mobile banking, the authentication needs vary depending on the financial institution and what you set up using your smartphone. This may require:

PIN
Two-factor authentication
Biometric scans

Functionality

Mobile banking started off by offering basic facilities like:

Fund transfer
Locating nearby ATMs
Ordering a chequebook
Checking your statement or account history

Today, you can do a lot more with it:

Invest in fixed deposits, mutual fund schemes and more
Pay your bills or EMIs
Open a bank account
Apply for a loan or credit card
Shop for electronics, book tickets and more using points or your cards
Track your spending and use budgeting tools
Get help via chatbots or customer support teams
Complain, send feedback or contact grievance redressal systems

Internet banking portals also offer the same or similar services, depending on the financial institution.

Notifications

Similar to any other application on your phone, a mobile banking app sends push notifications to you. Through these, you can get amazing deals and offers from the financial institution. You can also track purchases, account activity and more.

Online banking doesn’t have this feature. You can check the ongoing deals and offers by logging in to your banking account. This is one of the major differences between online banking and internet banking.

User Experience

Online banking is dependent on the Internet service and every website varies depending on the financial institution. In the case of mobile banking, the application is focused on optimising the interface for a better user. It may also help you find the services you need quicker than websites.

Accessibility

You can use any browser on your PC or laptop to access the Internet banking of your financial institution. Most of the features of mobile banking can only be used via a mobile app. You can download the app depending on what kind of device you use, iOS or Android.

You can choose any option between mobile banking and online banking depending on your financial needs and lifestyle. No matter which one you choose, if you see your account balance as insufficient for big-ticket expenses, get a Fibe cash loan.

We offer up to ₹5 lakhs with nominal paperwork and affordable interest rates. With no end-use restrictions, you can use the funds without giving any explanations. Enjoy a flexible tenure of up to 36 months with the option to pre-close the loan without any penalties. Register on our website or download the Fibe App now and get started!

FAQs on the Mobile Banking vs Internet Banking

Can I access my account through both mobile and internet banking?

Yes, you can access your account on internet banking and mobile banking using your credentials.

Is mobile banking more secure than internet banking?

Both mobile banking and online banking are secure. They have separate security features, encryption and authorisation processes.

Can I perform the same transactions on internet banking and mobile banking?

Yes, you can perform the same transactions through both of these options.

Are there any differences in security between Internet banking and mobile banking?

Yes, both of them use separate security measures to safeguard your data. While internet banking uses your credentials, security tokens and OTPs, mobile apps may use biometric scans, PINs and encryption.

Do internet banking and mobile banking require separate registrations?

Yes, both need separate registrations. For Internet banking, you need a user ID and password. For mobile, you can get a separate password or use a PIN.

What is Comprehensive Income and How Does It Work?

Knowing how to calculate comprehensive income is an important aspect of managing cash flow and budgeting. When it comes to business, keeping a record of all your cash inflows and outflows is a priority.

Knowing the total earnings from your business venture helps you take calculated risks. You can also decide when and how to expand your business with funds available. This is where a record of comprehensive income becomes important.

Read on to understand the meaning of comprehensive income, how business is calculated and more.

Introduction to Comprehensive Income

By definition, it is a net gain in the company’s net equity over a specific period of time that results from non-owner sources. In simple words, it is all the income under the name of the business that includes the income from sales of the products/services as well as other sources.

Here are some pointers that better explain the meaning of comprehensive income.

This includes all the earnings of the company or brand, such as net income and unrealised income
Unrealised income is any income from indirect sources such as investment and foreign currency transaction
It also accounts for losses to the business from different sources
Businesses can choose any period of reporting to create a statement of comprehensive income for accounting
It shows how many assets and liabilities a company helms within a particular period
It also shows the securities available for sale to potential buyers

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Why Calculate Comprehensive Income

Both investors and company owners can use this data to analyse the business background. This is because it provides a big picture of the equity or the company’s value. On the other hand, stakeholders can get an idea if the company has investment potential or not.

If it shows continued growth in income, it means the business strategies are working. On the other hand, business owners can also use this to evaluate their investment and sales practices to garner better results.

Also Read: Tax Saving Investment Options

Understanding the Statement of Comprehensive Income

This accounting document includes the revenues, profit, expenses, taxes paid, and interest earned on investments. After creating this document, you can calculate the total profits and losses.

To write this statement, you need to do the following calculations:

Add total earnings from sales
Subtract the amount paid to buy raw materials and transportation
Deduct the salaries of the employees, rent and other expenses
Add earnings from other operations and other sources
Deduct the gains from discontinued operations
Add gains from business investments and shares

After all this, complete the final calculation to get the comprehensive income.

Pros and Cons of the Statement of Comprehensive Income

Now that you know what it is and how to calculate it, here are its benefits and limitations.

Benefits	Limitations
Gives a comprehensive view of the net earnings and expensesTells you about the areas that need attention and financesHelps gather details for financial planning for business growth	The inclusion of unpaid bills gives distorted ideas, which may lead to misinterpreted dataMisreported data can lead to incorrect predictions about the success of the company It is susceptible to manipulation

You can also check your everyday transactions to plan your next business move with the statement. This document also tells you when you need to borrow funds to maintain cash flow or for any urgent big expense. This includes any urgent repairs or funds for raw materials. After that, you can decide if you can afford to take a loan.

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This is because we have an alternative scoring mechanism which allows us to extend loans to individuals with low credit scores. Furthermore, we allow you to close the loan without any additional cost. Simply download our Personal Loan App on your smartphone or apply directly on our website.

FAQs on Comprehensive Income

How often is comprehensive income reported?

Different companies have different rules. It can be reported monthly, quarterly, or annually, depending on the company’s reporting practices.

What impact does comprehensive income have on dividends?

It has a positive correlation as more incomes lead to higher earnings by the stakeholders.

Where can I find comprehensive income information in financial statements?

You can find all the relevant information on the balance sheet.

Are there any standard accounting principles for reporting comprehensive income?

Yes, comprehensive income and other accounting details are presented as per the Indian Accounting Standard.

Can comprehensive income be manipulated?

In most cases, a statement of comprehensive income is used to analyse the profit and loss of the company for accurate calculation. However, it can be manipulated.

How to Use the Working Capital Cycle for Better Financial Management

The working capital cycle is an essential financial indicator of your business’s financial efficiency. This measures and tracks your business’s time to convert assets and liabilities into cash. In simple words, this cycle dedicates how long it takes for you to arrange finds for your business.

Knowing this is important as liquidity is a crucial parameter to carry out the regular operation of your business. Gaining more information on the capital cycle can help you maintain stability during a challenging economic environment.

Understanding Important Components of Working Capital Cycle

Successful business management includes comparing all the current assets against current liabilities. However, there are a few important pillars to keep in mind for better management of working capital:

Billing

This indicates the time taken by the buyer to pay the seller for goods or services. The billing process includes:

Gathering data of the buyer or seller
Creating the invoices
Sending invoices to the parties
Getting confirmation and tracking payments
Collecting payments
Adding records into the accounting software

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Inventory

This indicates the overall time a company takes to convert sales into inventory. This is an important component indicating your business’s inventory management and how well you manage the stock levels. All the money spent on buying inventory gets deducted from the working capital.

Receivables

Managing the receivables is important in terms of collecting the money owed to a company. Receivables are the amount owed to your company for purchasing goods or services indicating the rights to collect in future.

Cash

You can ensure a constant and steady cash flow to the business by ensuring the timely management of payables and receivables. That can help better optimise operation efficiency, which helps in making a strategy to balance the requirements.

Operating Cycle in Working Capital

The time required to convert the current assets to cash is calculated by adding different operating cycle days. The working capital days indicate the time period starting from the day you pay for inventory to the payment you receive by selling.

These are the cycles involved in the procedure:

Step 1: This cycle starts with cash in hand, but later, gets tied up in the payment of raw materials. It is known as inventory days, as your cash is used to acquire inventory for the business.

Step 2: The account receivable cycle represents the time period required to collect the payment from the customers after selling them goods or services.

Step 3: The account payable cycle represents the time period when your business’s cash is tied up in paying the suppliers for raw materials.

Knowing all the cycles and the days each takes, you can use the working capital cycle equation.

Also Read: What is Working Capital Demand Loan (WCDL)?

How to Calculate It

Using the formula for the working capital cycle, you can calculate the capital cycle:

Working Capital Cycle= Inventory Days + Receivable Days – Payable Days

What Strategies to Implement

To increase your business’s operational efficiency, you can implement various strategies such as:

Having good credit terms

This strategy can increase payable days by maintaining a good supplier relationship. You can negotiate to keep the cash for a longer period and utilise it in various other areas of your business.

Accelerating cash collection

You can reduce the receivable days with proper practice of maintaining invoices. You can also offer discounts for previous payments.

Speeding up sales

By improving demand forecasting and applying lean inventory techniques, you can reduce and decrease the length of inventory days.

You can also use certain software and tools to manage the capital cycle. Using inventory management software will help you to track stocks and optimise reorder points. Having a good invoicing system can help you in billing automation, eventually speeding up the payment cycle.

Using a financial planning tool can provide you with information on ongoing cash flow trends. This will help in better financial strategizing and business forecasting.

By using these techniques, you can effectively optimise your capital cycle to create sustainable financial health in the long term. While it is necessary to maintain the capital cycle, sometimes unforeseen expenditures can cause financial scarcity.

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FAQs on Working Capital Cycle

What is a good working capital cycle length?

A short capital cycle is desirable, though having a long cycle is not bad. However, it depends on the nature of the business.

How does the working capital cycle affect a company’s cash flow?

The cycle represents the availability of liquidity and, hence company’s cash flow. The shorter it is, the better the business can run.

Can a negative working capital cycle be beneficial?

Yes, a negative capital cycle represents the availability of liquidity to carry out day-to-day business expenses, benefiting the company.

How does the working capital cycle impact financial statements?

A negative working capital cycle represents a financially healthy cash flow, maintaining a positive impact on the financial statement.