For making money, it is important to keep an eye on the various costs involved while investing or during financial transactions. Charges eat into one’s return and thus impact final return. From normal banking transactions to using your credit card or taking a loan, things are going to change from October 1. Going forward, there are certain new rules that you need to be aware of while making personal finance transactions.
Here are 5 new personal finance updates effective October 1:
1. Repo linked lending rate (RLLR)
From October 1, 2019, all home loans, car loans and personal loans from banks are going to be linked to an external benchmark. Of the four external benchmarks that the RBI has allowed banks to choose from, most banks are likely to opt for the Repo Rate to tag their lending to. In such cases, the loans will be linked to the repo linked lending rate (RLLR) of the bank. The RLLR will be unique to each bank which could be 5.5 per cent or 6.5 per cent. Effectively, RLLR will move in tandem worth the movement in the RBI’s repo rate and therefore the transmission of rates to the borrower will be faster compared to MCLR based loans.
2. SBI new charges
If you are a bank account holder in the SBI, its better to be aware of the new service charges of the bank effective October 1. Amongst other charges, as an SBI account holder, you need to keep an eye not only on the charges to be levied on digital, ATM or transactions done in bank branch but also the charges levied for non-maintenance of Monthly Average Balance (MAB). Incidentally, the latter has been cut up to nearly 80 per cent.
3. Life certificate
Pensioners are mandated to submit Life Certificate to the banks in order to continue receiving the pension. Life Certificate is required to be submitted in the month of November. However, this year onwards, the government has relaxed the rule for the senior pensioners who are above age 80. Although the senior citizens above age 80 can submit Life Certificate anytime after October 1, its validity will remain till November 30 of next year.
4. Small Savings Post office rates
The government decides and set the interest rate on the small saving post office investments such as PPF, NSC, KVP etc. The rate is set for every quarter of the financial year. For the quarter starting October 1 and ending on December 31, the rates have been kept constant as that in the previous quarter. The post office rates were last revised in the Jan-March quarter of 2019, while it remained unchanged in the April-June 2019 quarter.
5. No discount on fuel transactions
Staring October 1, there will not be any discount on fuel transactions on the credit cards. Some card issuers have already started sending communication to the card users. HDFC credit SMS being sent to the card users reads this – “As advised by the public sector oil marketing companies, the 0.75 per cent cash back on fuel transactions will not be available with effect from October 1, 2019.” Reportedly, other credit card issuers such as America Express have also stopped offering such discounts. In the case of Amex, the maximum discount was capped at Rs 45 per transaction.