Certificate of Deposit

Archive for July, 2009

Question: I have NRI savings account with ICICI bank,I have some questions.please read inside?

I have NRI savings account with ICICI bank,I have some questions.Since I live in USA and not visiting often to india and also didn’t do any transaction with them even online since time they disabled my log in ID and password.I know I can reactivate by calling them.Now I have another problem that I have Certificate Of Deposit that already matured in 2007.This COD was given by my mother and its in her name.How can I transfer that all the money from COD to my NRI savings account?what is the requirement and what else I should do?Please reply in details and only if you really have good answer.Thank you in advance.

Answer: Your NRI earnings as the name suggests are earnings which are outside india and not in Indian Rupees. So the question arises that whether your Certificate Of Deposit is in indian rupees? or generated in india?
If any of the answers to the above two questions is or are yes then i am very sorry to say but its not possible to transfer your money in NRI account.

Whenever you would be re-visiting India for some purpose, please do the following, go to the bank branch and open a NRO account. This account is for income of NRI generated within India and in indian rupees.
The interest amount you generate in a NRO account is taxable at source or TDS at 30.8% (rates may change at any notice)
Along with this activate your “Third Party Transfer” such that you can transfer money from other accounts to your NRO account when generated in rupees and in india.

Also do not fail to log-in into your internet banking account once in 90 days such that they wont disable your log-in and password

Investing Information : How to Invest in a CD

Question: What are the rates now for ING Direct and HSBC Direct?

I am thinking about taking 11K out of my Money Market, which is only yielding 1.75%/mth, and a small amount of $60 out of my “just in case” savings account that is only yielding .54/qtr. I know I’ve waited late, especially when you don’t really know what is best to do right now as the economy is so bad. But it just came to mind that maybe there’s something better than what I’m getting now. Yet I don’t know if online banking is safe or not. At least I’m secure at my bank, and have just been complacent. There’s alot of TV commercials now about banking online, so I’m wondering if online is what I should do. I would appreciate the experiences you’ve had, and your advice.

Answer: 1.75% per month is 21% per year!! Somehow, I don’t think those facts are quite straight because if they are, you would be making one of the highest returns in the country!!

I’ve been with HSBC for over 6 months, and my money’s still there. They didn’t steal it yet, and no one hacked into it, so I’m assuming it’s all good. I get about 3.2% per year, which is probably the highest savings account rate in the country.

ING suspends withdrawals from two bond funds

Question: Interest Rate Calculation?

How do you calculate the interest on Certificate Of Deposit?
for example if you but a cd for $1000 at interest rate of 3.45% how much will it be? thank alot!

Answer: CDs use a compounding method that is called “Actual/360.” This means that they compound daily (using the actual number of days) at a daily rate equal to the interest rate divided by 360.

To calculate the terminal value, use the following formula:

FV = PV * (1+R/360)^N

Where

FV = Future Value
PV = Present Value
R = annual nominal interest rate
N = number of days invested.

So — if you put $1000 in a CD last December 31 for a year, then when it matures it will be worth:

1000 * (1+0.0345/360)^366 = $1,035.70

In a non leap year, the amount would be ten cents less.

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