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It’s not advisable that you keep your surplus funds in a regular savings account for long. In that case, you can’t just expect a high ROI against this fund. You may choose to go with multiple options like mutual funds and shares, but they have an element of risk. The risks are much lower with FD investments as they’re regulated.

What’s so special about Fixed Deposits?

You may open FD account while you’re looking for some safe and sound investment option. Besides being safe, FDs yield a lucrative rate of interest for the investors. You may earn quality interests on the amount that goes out in your FD account for a certain period.

1. Fixed Deposits create earning opportunities by compounding interests

FDs yield interest for over a uniform period when issued by banks. If you don’t need the amount of interest to come as regular quarterly or monthly income, you may consider reinvesting in your FD account. You’re likely to witness a growth of the principal amount and the interest of the upcoming period will be ascertained on the new value. In this way, you’ll end up earning more on the invested amount. All you need to do is to pick your payment option besides opting for the compounded FD option. You may use any FD calculator online to check the returns.

2. Sound investment option for senior citizens

You may consider an FD among the most lucrative investment options when you don’t have a source of steady income, especially when you’re old and retired. Many of the Indian banks provide you with an FD account and abide by the safety norms laid out for protecting your invested principal. The rates of interest might not be very high, but you may still gain something on these deposits. Under circumstances when you’re heading towards a financial crisis, you may close all FDs even if they haven’t matured.

3. Fixed Deposits yield tax-saving opportunities

FDs come with great tax saving options when you’re specifically interested in investing a portion of your funds for a long term. You may avail them in the form of a 5-year term deposit and set your money to be locked in for those 5 years. Until the maturity of your FD, you won’t be able to achieve credits or loans on your fixed deposits and can’t break them. With tax saver FDs, you may enjoy tax exemption on the principal amount invested by you. Depending on the tax slab, taxes are levied on the interest.

4. Fixed Deposits are much safer

The RBI governs all FD schemes that are issued by the NBFC and Indian banks. Issuers of these schemes are required to follow certain stringent regulations and rules from time to time. In India, the banking industry is safer for the investors as most saving schemes yield adequate protection towards the principal.

If you’re not among those who looks for a high ROI then you may be in need of a more secure investment. FDs are certainly one of those safer schemes that you’ve been looking for. All of your capital is in safe hands as the FDs are regulated by stringent norms laid down by the government authorities. That is also the reason why FDs are considered so safe for the members of low-income groups that don’t possess any alternative source of income.

If you’re taking out your first online personal loan, it probably means you don’t have a credit history or a credit score. This doesn’t however hold true if you’ve had or currently have a credit card (if you’ve had a credit card in the past, you’ll have a credit score). Lenders use your credit score obtained from your credit report to understand how good you’ve been at managing credit in the past. Personal loans are unsecured loans that don’t involve collateral, and usually come with a higher interest rate in comparison to secured loans. This is precisely the reason why having a good credit score is important for your application to get approved.

Let’s forget the credit score part for now. If you’re a first timer, here are some things you should note before taking your first unsecured personal loan:

Know the various charges involved

Personal loans come with a list of charges that include late payment charges, EMI bounce charges, processing charges, pre-closure charges, and part-payment charges. When you’re taking out your personal loan for the first time, make sure you are aware of the various charges. It is of course, always good to be aware about how much lenders are charging you.

Choose a short repayment period

Choosing a short repayment period helps reduce the interest payment over the course of your loan tenure. Longer tenures attract higher interest payments, but lower monthly repayment amounts. As your first loan, you wouldn’t want to pay too much interest, do you? However, if lower monthly repayments suit you, you should go ahead and choose a longer tenure, for you can always pre-close your loan after a certain period. Note that most lenders require you to complete a minimum of 6 months or 12 months of your tenure before you can pre-close.

Don’t borrow more than you need

Your approved amount might be higher than what you asked for – lenders use this tactic to make you borrow more. Don’t fall for it thought. Borrow only how much you need. Borrowing more than you need is just setting the platform for unnecessary debt accumulation.

Negotiate the interest rate

Negotiating the rate with the bank will help you get a lower interest rate on your loan. Moreover, if you don’t have a credit history, there’d be multiple lenders in the market willing to offer you a loan. Going by this logic, it is advised that you negotiate the interest rate on your loan to get a reduced rate.

Don’t apply with multiple lenders

Applying with multiple lenders negatively affects your credit score. Too many credit inquiries reflect credit-hungry behavior, and lenders can reject you on the basis of this – rejections bring down your credit score as well. So for starters, make sure you apply with only one lender.

As the saying goes—out of sight, out of mind. And for many, this has been the motto for their pensions. However, the launch of auto-enrolment schemes, increased media coverage and a growing awareness of retirement has shifted these attitudes.

According to the Q2 2017 edition of the Tackling The Savings Gap Consumer Savings and Debt Data report, 598,000 employers were enrolled in a workplace pension scheme. Over the 12-month period, they contributed a collective £87.1 billion. With the popularity of personal pensions continuing, it’s clear to see that Britain is certainly more aware of their pension responsibilities.

Could our other financial commitments be holding back our personal pension savings? The Q3 2017 edition of the report suggests so. During the quarter, 45% of survey respondents failed to make a pension contribution; this was most common in 45 to 54 year-olds (47%). 18 to 24 year-olds had the second largest proportion of people who failed to contribute (44%).

Consider the above in relation to what the report also found. Findings show that a third of its respondents worry about money on a daily basis, while 37% admitted to lying about their debt. Perhaps then it’s not because of a lack of awareness; it may be because their financial situation simply won’t allow them to make a contribution.

Pension contributors added £203 on average to their pensions during Q3 2017. In contrast, the average amount of debt taken on by UK consumers each month stood at £370—significantly higher than the amount put towards their pensions.

A total of £143 per month is spent on average on purchases that are later regretted, the Q3 2017 report found. This includes purchases across food, clothes, alcohol and other items. If this money was invested in a pension instead for the full span from age 30 to 65, it could translate into almost £320,000. Based on the fact that Brits believe they will need £23,000 annually to live comfortably in retirement, this amount would be enough to fund 13 years of retirement.

This monthly spend breaks down to £4.70 per day. As the above example shows, investing this amount instead could lead to a comfortable start to your pension pot for retirement. As such, we shouldn’t underestimate the impact that small yet regular contributions can have. This underlines the importance of better financial management to allow us the capacity to add such funds to our pension pots.

To help you learn more about how much you could potentially need for retirement, True Potential Investor has created the Saving For Retirement: How Much Will You Need? quiz. By answering a series of questions, you can get an idea of the potential pension pot you’ll need—take the quiz today to find out more.

Singapore is one of the most competitive and most comfortable countries to do business in Asia. Starting your own business or franchise in Singapore could be easy, especially if you know what industry to enter. But before venturing into your business, make sure that you have set your finances straight. One of the ways in doing this is by opting the aid of licensed money lenders to jump-start your business’s capital. Here’s a guide on how to choose the right type of loan for your small business.

What Kind Of Business Industry Do Do You want To Enter?

Depending on the nature of the industry you want to enter, you want to choose money lenders which suits your need. Obtaining loans from money lenders are easy these days. This is especially because money lenders already have specific programs for people who want to open a particular type of business. By choosing a program targeted to your industry, money lenders have already pre-empted the needs of specific industries and how best to distribute the loan.

To attract the attention of borrowers, money lenders make favorable payment schemes and better interest rates. Always put your options in front of you and choose one which you think matches your needs. This is crucial for to meet your demands. Determine which money lenders have a program best suited to your needs and your industry.
Also look at its terms and conditions and make a preliminary judgment if you are willing to stick with the state until the end. Among the initial question, you also ask yourself is if it is flexible enough to meet your needs. With these preliminary considerations in mind, starting your small business should be a breeze.

How Much Money Do You Need And Where Will You Use Them?

After determining the industry you want to enter, you need to ask yourself how much do you need? The loan you obtain from the money lender depends on the amount of capital required to start your business. You also have to look at your current pool of money and how much more do you need. A guide to figuring out how much you need is to make a preliminary list of all the things you need for your capital expenditures.

Capital expenditures could include the following: the cost of purchase of your land, the construction of your place of business, obtaining a business permit and its necessary taxes, procuring the materials for your inventory and these are only among the things you should identify from the very start.

This is important because you do not want to understate the amount of money you need to start your business and lack funds later on. This may lead to delays in starting your business. Moreover, lacking funds in the middle of starting your business means you have to obtain the new loan from money lenders.

This means providing them with additional requirements and collateral. In case you have an excess of the money you borrowed, make sure to be frugal and invest or use the money for other expenditures. Never use it for your expense.

Will You Be Able To Pay The Money Lender?

One of the most critical question to ask yourself is will you be able to pay your money lender? What this question asks is not for the immediacy of you paying but of your ability to pay. Your ability to pay is often of the primary considerations of money lenders to determine if your loan is granted. If it shows that you have defaulted on your previous loans or if you have insufficient proofs to give the money lender of your ability to pay, this may result in your loans’ denial.

Money lenders usually provide reasonable and flexible payment schemes and programs. Choosing the right payment plan helps you with your ability to pay, and this is one of the things people overlook doing. One of the things borrowers have to be mindful of is that loan payments can be made in an installment manner or on a one-time payment basis.

Choosing the installment method distributes the expense into smaller costs and within shorter months. This is easy to do as long as the borrower always keeps a portion of its revenue for their loan payment. A one-time payment basis is often hard for some borrowers to comply with because they think of the aggregate amount of the loan and how hard to achieve the overall amount.

One of the best solutions for this is to imagine that your investment is on an installment basis. Thus, make sure also to keep a portion of your revenue every month.

Do You Have Enough Collateral For The Loan?

Before you can obtain a loan, one of the requirements money lenders asks for is collateral. This collateral serves as the guarantee to money lenders that the loan will be paid. Insurances can be in the form of property or equipment which would be levied if you do not pay your mortgage. With this in mind, you have to make sure you have enough features to present as collateral. This also serves as evidence of your ability to pay. Also take note that depending on the loan you obtained, some require more significant insurance while some do not require one at all.

Always make sure that the collateral you give to money lenders are yours. One of the most significant problems money lenders face is that some of the guarantees they receive are often not owned by the borrowers. Instead, it is owned by someone else who is not a borrower. This causes headaches to money lenders because then they have no guarantee of the loan being paid. More importantly, be responsible when it comes to providing information about the thing being used as collateral.

Only Choose Licensed Money Lender

The one and most important thing that you should remember when obtaining loans are always to get it from licensed money lenders. The government usually certifies some companies or individuals authorized to grant loans to ensure safety between the borrower and money lender. The requirement of government approval is necessary because it makes sure the business is legitimate and transactions will be provided.

Never make the mistake of approaching anyone who is not sanctioned to lend out money. If you do, your interest, as well as your businesses’, will not be guaranteed. With the world today, our safety is no longer guaranteed. There are some however who make the mistake of obtaining loans from unauthorized money lenders.

Some of the effects of borrowing from illegal money lenders could be the interruption of starting your business, your business not pushing through at all for the inability of funds and one of the most important things to be wear about is high-interest schemes.

Conclusion

Do not hesitate to take leaps of faith in starting your own small business in Singapore. Following the guide above, always keep in mind to only choose licensed money lenders to ensure the safety of your companies success. Still be alert of potential scandalous money lenders in doing your business.

When working in B2B or B2G sectors invoice factoring is essential. With this type of invoicing, you are provided a short-term capital in exchange for assigning invoices to a factor. The company receives about 80 – 85% of the advanced payment and later when invoice is paid,- the remaining 20%.

Unlike factoring, business invoice finance is easier to use in a way that you don’t need to assign invoices. However, the two terms are often used interchangeably. Here are 8 benefits of invoice factoring in case you are still considering whether to use it for your business or not.

1. Professional Management of Your Finances

When you entrust a professional company to handle your paperwork and collection of payments on your invoices, you save a lot of time. And saving time means saving money. The cost of accessing such services has fallen significantly lately. Though fees vary from one company to another and also depend on what kind of business you have, generally, factoring finance fees range from 0.5 to 3.0%.

Your contract with an invoice factoring company doesn’t have to be permanent or long-term. You are free to choose when to avail yourself of such services depending on when you need them most.

2. Flexible Financing Terms

Accessing finances from banks can be quite challenging for small or medium businesses because most financial institutions prefer to deal with established brands and businesses. The real benefit of using invoice factoring services is that you don’t need to have a great credit or spend years in business to qualify for them.

This happens because the company looks at how capable your customers are of paying the invoices, not how credible or long-term your business is. Moreover, a factor can provide more finances for your business if the need arises. If your business experiences increased sales you can easily apply for more money from a factor.

3. No Stress

You don’t have to wait on your customers to make their payments so you would make yours. Straight away, you are provided with cash on your invoices. You can deal with your taxes and pay all the needed bills on time.

You can proceed with your day to day business without worrying about when you will get paid by the clients. You can actually grow your business, implement new ideas and try new ways of doing business in your sphere while a professional factoring company takes care of your invoices.

4. Growing Your Business

The law of business is if you want it to grow, you need a steady cash flow. Concentrating on your business and acquiring new clients rather than on chasing your debtors will help you do that. As an owner of a business you can pay your suppliers straight away without waiting for some cash from the clients.

Thus, your manufacturing works smoothly and continually without delay. Another benefit is that you will also be able to extend credit lines to your loyal customers. In business, customer loyalty is one of the most decisive factors, so this will give you an advantage over competitors.

5. Easy and Fast Access to Cash

The factoring process is rather quick and not complicated. Usually, the funds are provided to you within 24-48 hours after your invoices have been approved. The initial setup can be 5 top 10 days. However, if you consider business cash flow loans from a bank, it will take you far longer than that.

An adequate cash flow is what keeps your business afloat and growing. All the daily business routines need to be taken into consideration: financing daily operations, paying rent along with utility bills, paying employees and suppliers. That is why it is essential to have cash on your hands at all times.

6. Credit Control

Late payments from clients can cripple your business. A debtor finance company will help you and your employees to concentrate on work instead of chasing the creditors. If you hire an invoice factoring company, it will assume the functions of credit controller and will free time for you to do your business.

An invoice factoring professional knows how to deal with customers who are late on their payments, unwilling to repay their debts or fail to pay them altogether. You won’t have to spend time and money on legal actions against your debtors.

7. Stronger Balance Sheet

Factoring doesn’t appear on your balance sheet or financial statement as an expense because it is not a loan. By using invoice factoring, you avoid taking on a new debt. You will receive the cash that you need to pay your vendors or suppliers on time, to make some major purchase for your business or just to improve your cash flow.

You will use you existing account receivables and this will not be a loan, and thus, not a debt.

8. Profit Predictability

When using invoice finance services you have an opportunity to predict your profits. Since profits can be quite unstable, it is difficult for business owners to make plans.

However, when you use factoring, you know that you will immediately receive most of your payments and thus you can predict your profits and make the needed investments for the future, like necessary repairs or even company expansion.

Invoice factoring can be a huge advantage for small businesses when the credibility of your customers is more important than yours. Invoice factoring services can be beneficial both for B2G and B2B spheres.

Here are some examples of industries where it can be used:

• Construction companies. Construction project need years to be completed but workers need to be paid regularly and on time. Besides, these projects involve a lot of expenditures.

• Trucking companies. There are a lot of expenses in this industry: from truck maintenance to the cost of fuel. You simply cannot afford to wait for 30 or 60 days to be paid for your services. This is where invoice factoring solves the problem.

• Recruitment, staffing and employment agencies. Invoice finance companies are probably the most needed in this sphere. Usually you have to pay your contracted workers before the payment from the clients is received.

• Clothing manufacturers and textile industries. It is obvious that before you receive payment for the products that you sell, like clothes or accessories, you need to invest in materials and of course pay your employees. Utilizing invoice factoring will help you do that without getting into debts.