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How The RBI Repo Rate Affects Fixed Deposit Interest Rates

The latest piece of news making the rounds in the finance world is that the RBI has changed the money policy in the third quarter of the financial year 2013-2014. The Repo rate (short term lending rate) has been increased from 7.5% to 8%. Most business lenders cannot approve of this hike as select loans will in turn see a hike in their interest rates. Let’s try to understand these dynamics in detail.

Repo rate: Meaning

This is the rate at which the Reserve Bank of India (RBI) lends money to commercial banks in case of any shortfall of funds. A higher repo rate means that nationalized and private sector banks will be less keen to take any money from the RBI. Thus, it limits the availability of funds for the common man. How easily can you get a loan in today’s market? The repo rate will affect the interest rates and the simplicity of the process as well. The impact may not be direct for most readers who argue that there are several other factors in the mix. However, it won’t be a factor without any influence either.

Repo rate hike: Consequences

Obviously, this hike will increase the home loan rates and EMIs over a period of time. It may not affect all types of loans, but home loans will definitely get affected. This is a long term consideration for most banks though, as no bank has increased their lending rate as of now. In fact, investors can even anticipate lower fixed deposit interest rates . The rates, as banks apply it, is a function of demand and supply. This hike in the short term lending rate will deter several business owners, investors and all retail borrowers from borrowing money from a bank. Banks, in turn, won’t be in a position to pay off people who have invested in fixed deposits. Thus, the interest rates on term deposits should fall down.

How to use it to your advantage?

If you are planning to borrow in this economy, it can be a bit hazardous right now. The rate hike will affect all existing and new customers. But, in these uncertain times, fixed deposits are at its highest in terms of rates. The looming threat of elections and potential fall in FD rates can continue till banks have to step out of the current status-quo strategy and make decisions. If you have funds that you want to invest in debt instrument like fixed deposits, then this is the time. The chances are that these are the ideal fixed deposit schemes that you will get in the upcoming future. So, make the most of it.

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Ayurvedic Supplements To Cleanse Kidney And Regulate Purified Blood

Kidneys filter blood to produce urine and in this process, impurities, toxins and harmful particles are absorbed by kidneys. Poor functions of kidneys can raise many health problems as impure blood can affect cellular activities and health of organs. This organ keeps blood clean and maintains proper amount of salt and minerals in blood which helps to regulate blood pressure naturally. Damage to kidneys can increase the amount of waste fluid in body which further results in swelling, vomiting, weakness, insomnia and shortness in breath. If not treated on time, this damage can lead to life threatening conditions or kidney failure. Infection in kidneys can affect filter process which in turn may cause damage to other organs of body. Poor function of kidneys can increase risk of stones. Increase in weight also affects normal function of kidneys. Using herbal supplements can help in treating kidney problems as well as improving overall health.

One can use UT Clear capsules which are powerful ayurvedic supplements to cleanse kidney. These capsules treat various problems related with kidneys and keep them healthy. These capsules are very beneficial in case of kidney stones. Powerful ingredients of these capsules lower down oxalate and uric acid level in blood. These supplements provide vital nutrients which are essential for healthy working of kidneys. These capsules possess ingredients which repair damage in kidneys at relatively fast rate. This further prevents problems like frequent urge for urination or pain while urinating. These capsules detoxify kidneys in a natural manner. These capsules not only help to get rid of kidney stones but also prevent further formation of stones. These ayurvedic supplements to cleanse kidney are highly useful to those who have only one kidney. Due to improvement in health, body gets enough energy which further prevents weakness and reduces fatigue, tiredness, etc., effectively.

UT Clear capsules contain Haldi, Sonf, Taj, Gokshuru, Bastimoda, Haubair, Elaychi Badi, Kaknaj, Makoy, Varna, Kali Musli, Kulthi, Jawakhar, Kakdi, Ambahaldi, Samudrasosh, Patherchur and Shilajit. All these herbs present in ayurvedic supplements to cleanse kidney have been used in ayurveda from years to treat kidney related problems. These herbs treat various infections in kidney due to their anti-bacterial, anti-viral and anti-fungal properties. These herbs also help to break down or dissolve hard particles which form stones. Healthy kidneys produce urine properly and thus regularly eliminate toxins from body. These herbs absorb sodium from blood without misbalancing fluid level in body and keep blood pressure normal. Anti-inflammatory property of these herbs reduces swelling in kidneys and thus one gets relief from pain also. Some of the herbs also act as pain killers and give relief from sufferings caused due to injuries and kidney stones. These herbs flush out toxins from body and regulate purified blood.

It is recommended to use UT Clear capsules for at least 3 to 4 months to avail full benefits. These capsules give long term benefits and improve digestion also. Since these ayurvedic supplements to cleanse kidney do not cause any side effects, one can use these capsules for prolong time. Eat healthy diet and drink plenty of water to keep kidneys clean naturally.

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Importance Of Home Loan Rates In Your Monthly Cash Flow

EMI calculators calculate the EMIs based on three factors; the principal amount, the housing loan interest rate and the loan tenure. Out of these, the home loan rate is the most important one, as it is the only factor that can vary after you have started paying off the EMIs. Whether you have a floating or a fixed home loan rate , it will be based on the RBI rules and regulations, the profit margins and economy variables as well.

Due to the various financial challenges, it is likely for your EMIs to become the biggest deduction from your monthly earnings. This can be hazardous to your financial life for two reasons:

1. You may not have sufficient funds set aside for emergencies due to which you may end up losing your home because of the additional expenses.

2. Any external factor like a raise in the home loan rates in India can affect regular monthly payments such as EMIs, utility bills, grocery purchases and insurance payments. At times, it can imply that you won’t have sufficient savings for any other financial or medical emergencies.

If you understand the impact of the potential growth in home loan rates, you must ensure that your EMIs account for less than 30% of your monthly income. This will help to make certain that any possible increase in the housing loan interest rates can be dealt with easily.

It can be challenging to keep this percentage consistent throughout the term of your loan repayment though. However, it is the most strongly advised course of action. Fundamentally, there are two strategies that can help you get there:

1. You can work towards an increase in salary or your monthly business turnover, to stay ahead of this ratio.

2. You should make significant low-risk-higher-liquidity investments with whatever funds are left after all the expenses.

The most suitable type of investments for this purpose include SIPs in balanced or gold mutual funds, fixed deposits, recurring deposits, and gold and blue chip equities from stock market. These are realistic as they offer the right combination of liquidity and rewards. You can use them if you get into a situation where you can’t depend on your salary or business turnover to pay your EMIs. First time borrowers believe that home loans are about making the repayments by the set date. However, if you ask any financial expert, they would tell you that it’s much more about the financial discipline of setting enough money aside.

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