MUMBAI: Several personal finance related changes are due from September on the banking and financial services fronts which, if not handled judiciously, can negatively surprise you by hurting your wallets. These changes vary from choosing your own debit/credit card network to lower rewards points on certain credit cards transactions to lower minimum due payments on credit cards that will only add to interest burden on your purchase and to paying Rs 50 for Aadhaar updates, among others. The month will also see many banks closing their special deposit schemes, so it is time to lock your money for higher returns.
Higher yielding FD
September is the last month to lock in for attractive interest rates for special fixed deposit (FD) schemes for most banks. High credit demand and lower deposit mobilisation have been worrying the lender as they lead to asset-liability mismatches. It can be noted that since last December, several banks introduced special FDs with attractive interest rates. But most of these schemes are ending this month.
For instance, SBI’s special FD scheme offers 7.10% for 400 days till September 30, and so is IDBI Bank’s special scheme, offering 7.35% for 700 days. In June and July, large lenders like State Bank of India, HDFC Bank, Bank of Baroda and Union Bank of India launched special FD schemes offering 7.10 to 7.35%.
Choose your card network
Starting September 6, banks will have to offer their customers the flexibility to choose their card network while applying for or renewing a card. And the cheapest is Rupay cards developed by the National Payments Corporation of India (NPCI), and not the globally accepted and dominant Visa and Mastercard, whose transaction charges are more than three times that of Rupay cards. While these American card networks charge close to Rs 2 per transaction from the card issuing bank, NCPI charges about 40 paise. The issuer passes on the cost to the cardholder under the name of merchant discount rates (MDR)/merchant fees and interchange fees, among others.
This means that if a bank issues a Mastercard, the customer can opt for a Visa card instead, or vice versa. Existing customers will also have the opportunity to make this choice when their current card is up for renewal.
Pay Rs 50 for Aadhaar updates
The Unique Identification Authority of India (UIDAI) has said the free Aadhaar card updates will end from September 14. However, the free service is only available on the myAadhaar portal now and updating through Aadhaar centres comes at a fee of Rs 50 even now. From September 15, even updating through the myAadhaar portal will be chargeable at Rs 50.
Rupay cards reward points
One positive surprise is that, Rupay card holders will also be able to earn the same reward points for UPI transactions as they do for PoS/online transactions. According to NPCI, this will provide an enhanced benefit for credit users. And this is because in early August, the NPCI had admitted to the rewards imbalance affecting Rupay credit card users as unlike traditional card transactions, UPI payments made with Rupay cards till now were not offering comparable reward points, which are the main drivers of card usage.
Pay your advance tax
September 15 is the last day to pay the second instalment of the advance tax if you are salaried with additional sources of income such as interest from deposits, rental income, capital gains from markets or other applicable investments etc. Delayed payments of tax dues attract 12% penal interest or 1% per month under section 234A of the Income Tax Act.
Reward points from HDFC
HDFC Bank has capped its reward points on utility and telecom transactions to 2,000 points per month, effective September 1. Additionally, education fees paid through third-party apps like Cred, Mobikwik, etc are excluded from earning rewards points. But education-related payments made directly through the college/school website, or their PoS machines, will continue to earn rewards.
IDFC First revises terms
IDFC First Bank credit card customers also need to be careful as this small lender has revised its credit card payment terms from this month. The changes include modifications to the payment due dates and the minimum amount due. While payment due date has been cut to 15 days from 18 days from the statement generation date. Missing the due date in credit cards not only leads to a penalty for non-payment but also leads to compound interest. So ensure you pay your credit card bill on time.