BC / BF - 7 , Banking Fundamentals to Know for Students.

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Financial Planning

Many of us think that financial planning is only about investing for retirement. It is – but it's also much more. Whether you're a college graduate, a young person, a housewife or a senior person, financial planning is how you think ahead to make sure you achieve your goals. Your goal may be to get out of debt, to balance your budget or to retire in style and comfort; without a plan, all you have to rely on is good luck. People who are well prepared usually have better luck.

Planning means that you try to choose the future you want instead of falling into a future you did not choose.  Also, if you have a plan you can adjust it when changes occur in your life. Because you know you are taking steps to manage your future, you will save more and worry less.

A financial plan can help you to:

1. Balance today's needs with your goals for the future

2. Make the best use of your financial resources

3. Adapt to change in your circumstances and needs

4. Save the money you need to achieve your goals

5. Prepare for unexpected emergencies

6. Protect what is most important to you

7. Prepare for retirement

8. Leave something for your family

9. Manage your taxes

10. Live your life with a sense of direction and security.

Begin your financial planning by answering three key questions:

1.   Where am I now?    

2.   Where do I want to go?    

3.   How do I get from here to there?

Government schemes

Pradhan Mantri Jan Dhan Yojana (PMJDY)

Opening a bank account under the PMJDY is simple and easy. It also offers a lot of benefits. Have you already opened an account? If not, visit the nearest bank branch or business correspondent (Bank Mitra) centre today and open your account. You do not need to put any money in this account? However, if you want a cheque book you will need to fulfil the minimum balance criteria of the bank. To open this account all you need is your Aadhaar card. If you do not have an Aadhaar card you need any one of the followings documents: Voter ID, NREGA Card, Driving Licence, PAN Card or Passport. If you do not have any of these documents, you still can open an account. Go to a Gazetted Officer and get a letter issued with your name, address and photograph on it. Remember that you do not have to pay any money to open this account.

When you open the account, you will be given a free RuPay debit card. This card can be used to withdraw money from your account at ATMs or can be used to make payments for purchases at stores and online. You must use this card at least once in 45 days; otherwise, you will not get many other free benefits of the scheme. If you successfully operate the account for 6 months, you will be eligible for an overdraft facility i.e. you can borrow 5,000 rupees from the bank. And if you pay back the bank in time, you will be eligible to borrow 15,000 rupees the next time. This will save you all the problems of borrowing money from the local moneylender and paying him an exorbitant interest. When you open this account, you will also get a life insurance cover of 30,000 rupees and accidental insurance cover of 1 lakh rupees, all for free.

By having a bank account you can now transfer money easily across the country. Also, government benefits such as old-age pension or LPG subsidies will be directly paid into your bank account. Having this account will also give you access to various other insurance and pension products.

If you know someone who does not have a bank account, encourage him/her to open an account under the PMJDY and receive all the benefits, free of cost.