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Why Will You Open Your Child A RRSP?

If your child in his/her teen with a job and an income in the previous tax year, it is possible to open a RRSP in his/her name.

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RRSP for child
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Should you open a RRSP for your child? Find out why you should.

When parents consider saving for their children, they typically think of getting their money in a RESP (Registered Education Savings Plan) or a TFSA (Tax-Free Savings Account). The RESP helps to create an education fund for the child whereas the TFSA is a flexible and tax-sheltered way of saving money for the future.

While both are excellent options, what about RRSP (Registered Retirement Savings Plan)? A child RRSP is often ignored in financial discussions, but this plan can be an excellent way to save for the child’s future. Read on to know why you should open a RRSP for child.

Can I open a child RRSP?

Yes, you can.

A minor can open a RRSP by getting the consent of his/her parent or legal guardian. There is no minimum age for a child to open a RRSP, provided they have some legitimate income. Things like mowing lawns, lifeguarding, babysitting, etc. can add up to significant RRSP room over the years.

But then, if your child is still in his/her diapers, a RRSP is not the likely option.

Why open a RRSP for my kid?

There are plenty of good reasons:

1. To promote a healthy saving habit: If you want your kid to make a good saving habit, RRSP is an excellent choice.

2. To purchase a house: With home prices soaring, burying a house can be a hurdle for the next generation. Your child can get a head start by contributing the very minimal amount to RRSP and take advantage of the Home Buyer’s Plan at a later stage of his/her life.

3. Early investment and the magic of compound interest: Your child can take maximum advantage of the magic of compound interest by his/her early investment. For example, if your kid invests $100 from the age of 14, s/he will end up with a substantially large nest egg when s/he reaches 65 compared to someone starting with the same amount at 30.

The below chart throws more light on the matter.

Age 14Age 30
Per month investment amount$100$100
Total Interest Earned$342,111$100,471
Total Value of Investment at 65 years old$403,311*$142,471*

**This calculation is based on an interest rate of 6% compounded monthly.

Can I use my RRSP money for my child’s education?

Certain plans allow you to withdraw up to $10,000/year tax-free. There is also a lifetime maximum of $20,000/person. You will have to repay the money over a period of 15 years. Any amount you cannot repay will be subjected to income tax.

This program is available only to you and your spouse – not your kids. So, if you want to use your RRSP to pay for your child’s education, you will have to withdraw the required amount and pay tax on it.

How can you open child RRSP?

If you have decided to open a RRSP for your child, here is what your child’s going to need:

Income: Your kid must have earned some income and have been issued a T4 by the employer in the previous year (unfortunately, an allowance does not count). Your child should have also filed an income tax return in the previous year. 

Letter of consent: Your child must have a letter of consent from a parent of a legal guardian.

The rest of the process is more or less similar to opening a RRSP for yourself, including the process of deciding what you can do with the contributions.

Finally, we would like to say,

If your child in his/her teen with a job and an income in the previous tax year, it is possible to open a RRSP in his/her name. It can be a good option to establish a good saving habit. But then, if your child plans to use the money to pay for tuition, or debt, there are other appropriate investment options like RESP or TFSA. Talk to our financial advisors to know more about how to open an RRSP. The consultation is free with zero obligations!

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Finance

Features and Benefits of Using the Home Loan EMI Calculator

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The Indian home loan market is estimated to grow at a CAGR rate of 22% between 2021 and 2026. Thus, this is a perfect time to invest in real estate. Nevertheless, it is essential to have proper knowledge regarding EMI payments. Therefore, it is wise to rely on a home loan EMI calculator to evaluate the EMI amount and other key factors beforehand to avoid further issues. 

What is a home loan EMI calculator?

Availing a loan is a crucial financial decision. Hence, before availing of a loan, it is essential to do a loan planning exercise to estimate monthly EMIs. A home loan calculator helps borrowers calculate the monthly EMI based on the principal amount, loan tenor, and interest rate of a home loan. This calculator makes loan planning easier for borrowers. Hence, individuals can take a look at the features and benefits of home loan EMI calculator that will make their repayment more convenient:

Aspects and advantages of home loan EMI calculator

This simple, user-friendly tool will evaluate the home loan EMI amount at once and provide borrowers with a fair idea of monthly outflow that will contribute towards your repayment procedure.

  • Choosing the right tenor- The repayment of any loan is made through monthly EMI that makes their repayment convenient since they can choose a feasible tenor that will not be stressful. After getting a fair idea of the monthly EMIs, individuals can decide whether they can manage to pay a high EMI and choose a short tenure period or pay a pleasant EMI amount and extend their loan period. One can also focus on ways to reduce home loan tenure and EMI to further ease repayment. 
  • Easy calculation- Borrowers, who want to know the exact figure of EMI repayment, they need to enter the loan amount, interest rate, processing fees and loan tenor and the amount will be provided by the calculator.
  • Comparing Interest rate- The interest rate charged by financial institutions regulate the cost of home loan. When individuals pay their home loan EMI, the home loan interest rate charged decides how much of an amount is to be paid to the lender. Choosing a short tenor reduces the interest rate and allows individuals to compare several financial lenders’ different rates.
  • Choosing the principal amount- Though the financial lenders calculate the higher eligible amount, it is not necessary to borrow that particular amount. Borrowers should try to arrange the maximum down payment to keep the EMI amount minimal.

Hence, a home loan calculator is a handy financial tool that gives instant and accurate results, thereby helping individuals customise home loan based on their comfort and convenience.

To meet your needs, some reputed housing finance companies offer a home loan amount of up to Rs.3.5 crore over a flexible tenor period of 20 years. 

Top HFCs also provide pre-approved offers to simplify and quicken the lending process. These offers are available on several financial products, such as home loans, loan against property and more. You can check your pre-approved offer by providing your name and contact details.

Hence, using a home loan EMI calculator, users gain a fair idea about their financial obligation associated with the credit option and gauge their financial standing.

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Finance

Women Outfit Ideas For Valentine Day 2021

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Valentine’s day comes with the promise of romance in the air. And on that special day, we all love to look good and attractive. When it comes to women’s fashion wear for valentine’s day, the choice is endless. You can either go simple and elegant or you can pick something bold and classy.

To help you get started with your dress shopping this Valentine ’s Day, here is the list of the best outfit ideas.

Flaunt A Sheath Dress

A sheath or a shift dress is very popular for special days like valentine’s and dates. This dress is pretty simple, yet looks perfect for the evening. A shift dress in soft colours or a dark one will definitely set the right mood for your romantic date. Some of the best colours to choose are pink, coral red, dark maroon, navy and bottle green. Pick the right size for comfortability and fittings while buying a shift dress online.

Stylish Tops With Palazzos

The most simple and smart looking dress idea for this valentine’s day would be a pair of the flared palazzo and a stylish ladies top. Embroidered tops are great or you can choose a crop top and wear a shrug on top to make the appearance more regal. Earrings, bangles or just a nose pin will look dazzling with tops and palazzos. 

Ravishing High-low Dress 

Go for the high-low hemline if you want to impress your special one. A dark or bold coloured high-low dress is simply perfect for your first valentine’s. You just need to wear a pair of heels or bellies, carry a clutch and wear your hair down. To highlight your dress, wear very little makeup and stay natural. If you are wearing a sleeveless and low neckline high-low dress, you can also drape a scarf.

Appealing Red Saree

Nothing creates magic like a stunning red saree. You can wear a classic chiffon or silk red saree and pair it with designer tops for girls. Instead of the regular blouse style, do a little experiment and wear a shirt style tp or a tunic kurta with your saree to make a bold and fresh statement. Oxidised jewelry or simple stone studded jewellery will look awesome with your red saree look. To accentuate your coverall attire, do a stylish hair bun and get bold eye makeup.

Elegant White And Red

Just like every time, red and white is the most demanding and evergreen combination for valentines day dress code. Wear a white tunic with a deep red palazzo and you need nothing else to look fashionable. You can also go ethnic and wear a red and white combination anarkali suit with silver jewellery. A white top with a long ethnic red skirt is another fabulous choice for your evening valentine day outing.

Some other great options in red and white are: midi or mini skirts in red with white tops, red cape tops with white jeans or you can wear a red and white gown. 

Asymmetrical Dress

The dress is the most preferred outfit for valentines day. And asymmetrical dresses always make the top of the dress list. The symmetric hemline looks offbeat, attractive and very classy. You can also pair a legging with an asymmetric dress and drape a dupatta to make a fusion style statement. 

Flared Long Kurta

Gown style flared kurtas are very much loved by modern women for their elegant look. Flared kurtas can be worn with churidars or leggings. If you are wearing ankle-length flared kurta, you can ditch bottoms and wear it like a dress.

Hope this valentine’s day, you look bold and beautiful and feel confident. 

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Finance

Some Facts You Must Know When You Apply Personal Loan For Women

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The number of women borrowers in India has increased significantly in the last few years. As per a report, female borrowers numbered around 2.4 crore in 2014 compared to 7.8 crore in March 2020. It just goes to indicate how the mindset has changed regarding borrowing among women in the country.

  • According to a December 2019 survey, women contributed approximately 15% of the total personal loan borrowers.

Fortunately, a personal loan for women is available against a standard set of qualifications, making them easily accessible. While the requirements remain gender-neutral, they indicate an increasing inclination of women in arranging personal financing conveniently. So, here are a few essential facts you must know about these advances, included under the eligibility requirements and application process, for easy financing.

Eligibility criteria for personal loans

The following simple personal loan eligibility criteria enable borrowers, including women, to avail hassle-free funding.

  1. Maintain an impressive credit score and history

The minimum CIBIL score requirement from some of the reputed lenders in the market is 750. Thus, borrowers must aim for a CIBIL rating higher than this particular score if they plan to secure a personal loan conveniently. 

Applicants with scores over 800 also stand a chance to acquire additional benefits, such as favourable rates, higher principal amounts, and much more. If one’s current score does not meet the minimum requirements set by a lender, a borrower must check out things to improve his/her personal credit score.

Nevertheless, taking care of factors such as maintaining a balanced credit mix, keeping the credit utilisation ratio in check and the likes always help maintain an individual’s credit profile for easy borrowing.

  1. Meet age specifications

Generally, salaried employees aged between 23 and 55 years are offered personal loans.

Match minimum income requirements

To acquire a personal loan for women, you must also possess a stable source of income. Monthly earnings should thus be around Rs.25,000 or more to qualify for these forms of credit. 

However, the exact specifications regarding earnings can vary based on your city of residence. If one’s income is limited, she can opt for a Flexi personal loan for women to ensure repayment affordability. Under such an arrangement, lenders provide a pre-sanctioned amount to borrowers for multiple withdrawals, with interest charged on such withdrawals only.

For instance, if this limit is Rs.1 lakh and a borrower utilises Rs.25,000 from this amount, he/she would only need to bear interest on the latter sum and not on an entire principal sanctioned.

How to apply for a personal loan?

Borrowers can complete the following steps for an easy and convenient loan application – 

  1. Depending on the financial institution selected, visit its official website and navigate to the personal loan application section. 
  2. Next, fill up an online application form with the required personal, financial, and other details.
  3. Proceed to choose a suitable loan amount and ideal repayment tenure from the available options. Generally, the personal loans for women come with tenures ranging between 12 to 60 months.

Note that while an option to apply offline is available, one should avail a personal loan online to acquire the best deals. Borrowers can also compare the various rates and terms before choosing a low interest personal loan. For interest rate affordability, one can look for NBFCs like Bajaj Finserv.

The financial institution also provides pre-approved offers to hasten and ease the process of lending. One can avail these offers on personal loans, business loans, credit cards, and more. You can check your pre-approved offer by submitting your name and phone number.

  • Around 30 million women borrowers acquired credit in India, as per a CIBIL report from 2019.

Evidently, women are borrowing more frequently today than ever before. It is due to increased financial independence among Indian women, which has enabled them to avail and repay such credit efficiently.

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