Finergo Episode 21 Dt 27apr09

04 KALEIDOSCOPE

Ask your query My friend’s car met with an accident a few days ago. A bus rammed into the rear side of the car. He has been going to the police station to get an FIR so that he can claim the damage from his insurance company. Is there a faster way to get things moving? T. Somasundaram, Vellore

Dear Somasundaram, Your friend does not need any police FIR or complaint letter for claiming the insurance. All that he/she needs to do is to call up the insurance company and inform about the accident and fill up a claim form describing the incident. It is as simple as that. All general insurance companies follow the same policy. The insurance policy will have a call center number where you need to inform. They will arrange for a surveyor to come and inspect the vehicle. In fact they will send the surveyor to your garage at their own cost. A police complaint or FIR is only needed if there is any third party damage to property or life. Also in case there is any loss of life in the incident an FIR will surely be needed for claiming both the general insurance as well as Life insurance damages. Do you need some unbiased and professional solutions to your personal finance issues related problems? Ask Doctor Finergo. Mail your queries to [email protected], Put subject as Doctor.

Mini Quiz Q1: Which agency frames the Annual Policy document relating to the Economy? a.RBI b.Finance Ministry c.Economic Affairs committee d.State Bank of India Q2: Which blue chip company recently declared a 1:1 bonus? a.Wipro b.Satyam c.Indian Oil d.TCS Send your answers to [email protected] or SMS your answers to 92813 98889. For example if you choose A as the answer to question 1 and B as the answer to question 2 type it as 1A2B and send it. Winner will be chosen by lucky draw from all correct answers.

Answers for last week’s mini-quiz 1.950000 2.National Stock Exchange

ERGO Monday, April 27, 2009

EVERY DAY WILL BE ‘INTEREST’ING RBI directs banks to calculate interest rate on a daily basis from 01 April 2010 PRADEEP YUVARAJ [email protected]

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n a “small investor” friendly move, the Reserve Bank of India in its Annual Policy Statement for 20092010 has instructed banks to calculate interest rates on your money kept in savings accounts on a daily basis rather than the current practice of calculating interest on savings bank accounts on the minimum balances held in the accounts during the period from the 10th day to the last day of each calendar month. Benefit to you: the current rate of interest prescribed by the RBI is 3.5% per annum. But most of the account holders rarely get to earn this interest as the minimum balance is the basis of interest calculation. Thus for example even if your account had a balance of Rs. 75,000 from 10th to 29th and you withdrew Rs 74,500/- on 30th and re-deposited it on 31st, the interest would be calculated only on Rs 500. If you had not withdrawn you would have received Rs 218.75 as interest but what you actually get is only Rs 17.5. Although on a broad basis, both the amounts look ridiculously low; considering the

The decision by the RBI has been easily accepted by banks and IBA (Indian Bank’s Association) as the level of automation is very high now and it’s easier to execute the calculations.

current inflation and what other investments return. But, any interest on idle money is a bonus and especially since all of us need to have some liquid cash at our disposal. Benefits to the banks: the new system will initially lead to a higher cost of payout for banks, but on the long run more and more customers will retain money in savings account thus reducing the dependence of banks on deposits. The second benefit would also be that NRI accounts could see higher inflows and banks in most countries do not even give 2% interest. Why now? This decision by the RBI has been easily accepted by banks and IBA (Indian Bank’s Association) as the level of automation is very high now and it’s easier to execute the calculations. What should you do? Combined with that fact that you can use any bank’s ATM free of cost, this new directive can help you earn some money on idle cash lying at your house. It even makes sense to deposit you piggy bank money into an SB account and just keep a bare minimum in cash in hand. After all better something than nothing. ■