10 things you should know about Rs. 500 and Rs. 1,000 discontinuation

Nutan Gupta

09 Nov 2016

In an attempt to curb black money and corruption, Prime Minister Narendra Modi in an unscheduled meeting announced demonetisation of of Rs. 500 and Rs. 1,000 currency notes with effect from midnight of November 8th 2016. In March 2016, around 88% of the total currency consisted of Rs. 500 and Rs. 1,000 notes. Naturally, this move has created a lot of panic among the people of India.

Here’s where and when you can exchange/deposit your money...

Process Limit Where Time-Frame
Exchange Rs. 4,000 Bank and Post Office 10th Nov to 24th Nov, 2016
Exchange More than Rs. 4,000 Any Personal Bank or any Post Office 25th Nov to 30th Dec, 2016
Deposit No Limit Banks and Post-Office 10th Nov to 30th Dec, 2016
Deposit No Limit RBI specified offices 31st Dec to 31st March, 2017

Here are 10 things you should know about the discontinuation of Rs. 500 and Rs. 1,000 currency notes:

  • All the residents of India who are holding currency notes of Rs. 500 and Rs. 1,000 have the option to deposit their cash in bank accounts or post office by 30th December 2016.

  • One can exchange old notes of Rs. 500 and Rs. 1,000 at any bank, post office, by showing a valid ID proof. However, the limit for this is Rs. 4,000 upto 24th November, 2016.

  • There would be no restrictions on online transactions, cheque, debit/credit card or any other plastic money transactions.

  • New notes of Rs. 500 and Rs. 2,000 would be brought into circulation from November 10, 2016.

  • People who are unable to deposit the old currency notes by 30th December, 2016 for some reason, have the option to change them by 31st March, 2017 by presenting a valid ID proof.

  • The old currency notes will be valid for transactions related to railway booking, air ticket booking, bus ticket counters and government hospitals till the midnight of November 11 and 12, 2016.

  • ATMs to remain shut on November 9 and 10, 2016.

  • The withdrawal limit for cash against cheque has been set to Rs. 10,000 per day and Rs. 20,000 per week upto 24th November. The limits shall be reviewed post this.

  • After the ATMs are functional, one can withdraw upto a maximum of Rs. 2,000 per card per day upto 18th November, 2016. The limit will be raised to Rs. 4,000 per day per card from 19th November, 2016.

  • People who do not have a bank account can open an account by approaching the bank with necessary documents needed for fulfilling the KYC formalities.

Please Note: You can refer to www.rbi.org.in for further information and the website of the Government of India (www.finmin.nic.in). You may also approach the control room of RBI by email or contact them on 022 22602201/022 22602944.

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mutual-fund

Why to Choose Mutual Funds Instead of Directly Investing Into Equities?

Whether to invest in equities or mutual funds is a question that has plagued every investor. As someone who needs the best value for his/her investment should you invest in equity directly or via mutual funds?

Let’s start by first understanding what these two terms ‘equities’ and ‘mutual funds’ stand for-

Equities- Equities generally represent ownership of a company. If you own any equity in a company, you are a part owner of the said company (depending on how much equity you own).

Mutual Funds – It is an investment scheme which is professionally managed by an asset management company. It pools together the resources of a group of people and invests their money in equities, debentures, bonds and other securities.

Why choose mutual funds over equities?

For people who’ve never invested in either stocks or mutual funds, it is hard to know which is better and where to start. Broadly speaking, if you are a novice investor, mutual funds are not only less risky but also way easier to manage. Here are some ways in which investing in mutual funds is beneficial as opposed to investing in equities -

Diversification

Mutual funds provide more diversification as compared to an individual equity stock. When you invest in equity, you are investing in a single company which has its inherent risk. For example, if you invest Rs.20,000 in buying equities of one company, you could face a total loss if that particular company performs poorly in the market.  

If you invest the same amount in mutual funds, it will be invested in different kinds of stocks and financial instruments, high-risk and low-risk both, so you might not face total loss even if one company does poorly.

Scale of Investment and Lower Costs

For an individual investor buying and selling stocks is a difficult task due to its high price. Thus, any gains made from stock appreciation are nullified if the overall trading costs are considered. Comparatively with mutual funds, as the money is pooled from a large number of investors, the cost per individual is lowered.  

Another advantage of mutual funds is that you don’t need to invest large sums of money. Buying equities for a profitable venture needs huge amounts of money, a minimum of few lakhs. With mutual funds, you can start with Rs.1000 and earn profits on that as well.

Convenience

Keeping an eye on the markets everyday is a time-consuming business, especially if you are investing as a side gig. There are people who spend their lives studying the market and still end up sustaining heavy losses. Though investing in mutual funds does not guarantee high returns, it is stress-free and needs less work as compared to investing in equities.

To sum it up

It is important to remember that mutual funds have their own disadvantages as well. Thus, as with any financial decision, educating yourself and understanding the suitability of all the available options is the ideal way to invest. 


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10 things you should know about Rs. 500 and Rs. 1,000 discontinuation

Nutan Gupta

09 Nov 2016

In an attempt to curb black money and corruption, Prime Minister Narendra Modi in an unscheduled meeting announced demonetisation of of Rs. 500 and Rs. 1,000 currency notes with effect from midnight of November 8th 2016. In March 2016, around 88% of the total currency consisted of Rs. 500 and Rs. 1,000 notes. Naturally, this move has created a lot of panic among the people of India.

Here’s where and when you can exchange/deposit your money...

Process Limit Where Time-Frame
Exchange Rs. 4,000 Bank and Post Office 10th Nov to 24th Nov, 2016
Exchange More than Rs. 4,000 Any Personal Bank or any Post Office 25th Nov to 30th Dec, 2016
Deposit No Limit Banks and Post-Office 10th Nov to 30th Dec, 2016
Deposit No Limit RBI specified offices 31st Dec to 31st March, 2017

Here are 10 things you should know about the discontinuation of Rs. 500 and Rs. 1,000 currency notes:

  • All the residents of India who are holding currency notes of Rs. 500 and Rs. 1,000 have the option to deposit their cash in bank accounts or post office by 30th December 2016.

  • One can exchange old notes of Rs. 500 and Rs. 1,000 at any bank, post office, by showing a valid ID proof. However, the limit for this is Rs. 4,000 upto 24th November, 2016.

  • There would be no restrictions on online transactions, cheque, debit/credit card or any other plastic money transactions.

  • New notes of Rs. 500 and Rs. 2,000 would be brought into circulation from November 10, 2016.

  • People who are unable to deposit the old currency notes by 30th December, 2016 for some reason, have the option to change them by 31st March, 2017 by presenting a valid ID proof.

  • The old currency notes will be valid for transactions related to railway booking, air ticket booking, bus ticket counters and government hospitals till the midnight of November 11 and 12, 2016.

  • ATMs to remain shut on November 9 and 10, 2016.

  • The withdrawal limit for cash against cheque has been set to Rs. 10,000 per day and Rs. 20,000 per week upto 24th November. The limits shall be reviewed post this.

  • After the ATMs are functional, one can withdraw upto a maximum of Rs. 2,000 per card per day upto 18th November, 2016. The limit will be raised to Rs. 4,000 per day per card from 19th November, 2016.

  • People who do not have a bank account can open an account by approaching the bank with necessary documents needed for fulfilling the KYC formalities.

Please Note: You can refer to www.rbi.org.in for further information and the website of the Government of India (www.finmin.nic.in). You may also approach the control room of RBI by email or contact them on 022 22602201/022 22602944.

Read More