GEO 12.97°N 77.56°E

Tip Tuesdays: How to Close Your HDFC Bank Savings Account?

Vinaya HS — Tue, 04 Aug 2009 01:03:21 +0000

I have had the unfortunate privilege of owning a HDFC Bank 3-in-1 Account (Savings, Demat — linked to Savings, and Trading). The Demat and Trading accounts were used for a grand total of two transactions. The Savings account saw a token amount being deposited, then saw the two transactions, and then saw a zero balance. To date, I have no idea why I opened this account. I closed the Trading account by handing over a simple letter at the base branch. The Demat account couldn’t be closed because it was linked to the Savings, which therefore needed to be closed first.

Here’s how you can close your HDFC Bank Savings Account:

Reduce your account balance to zero.
Take a photocopy/scan of your debit card (for backup and safety).
Take a photocopy/scan of the first and last unused check leaves in your checkbook (for backup and safety).
Go to your base branch (where you opened your account).
Fill out an account closure form.
You’ll be intimated of your account closure by post. If you don’t receive any intimation within a week or two, call customer care and confirm account closure (keep your Customer ID and Phone Banking PIN handy).
Tear-up your unused check leaves, debit card, and any other leftovers.

Any balance leftover in the account after closure will be returned via. demand draft. Uncredited interest amount, if any, will be accounted for in this reimbursement.

Here’s a pictorial view of the end of my HDFC Bank Savings Account.

Tip Tuesdays is my initiative to share practical personal finance tips — every Tuesday. I’d be delighted if you could share a tip or two from your own experiences. Drop a comment to submit your tip. And, as always, do spread the word if you find this useful.

Further reading:

Tweets on 2009-08-03

Vinaya HS — Mon, 03 Aug 2009 06:43:12 +0000

Interesting statistics published by the Reserve Bank of India on the number of forged/counterfeit notes detected by the Indian banking system.

Ask the Readers: What Should I Do If an ATM Gives Me a Counterfeit Currency Note?

Vinaya HS — Mon, 03 Aug 2009 06:20:56 +0000

In response to my post about guidelines on detection and impounding of counterfeit notes at Indian Banks, a reader asks,

Has anyone got a fake currency note through an ATM? What is the process to be followed in such a case? Does the bank keep track of each and every note fed into the ATM?

With most banks outsourcing to a third-party the loading of cash into ATMs, I’m not sure where the accountability and audit trail lies. I’ve never faced such a situation. How about you? If you have, what did you do?

Further reading:

Awareness Fridays: Interest Rates on Rupee Deposits

Vinaya HS — Thu, 30 Jul 2009 19:23:05 +0000

Have you ever pondered over questions such as “What’s the interest rate payable on my Savings or Current Account balances?” or “What happens if I opt for a premature withdrawal of my Fixed/Term Deposits?” or “What happens to an account that I no longer operate?” etc., then this Master Circular on Interest Rates on Rupee Deposits published by the Reserve Bank of India is a must read for you. Spend some time with this material and increase your knowledge on how the most commonly used financial instruments work.

Awareness Fridays is my initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

Further reading:

Tweets on 2009-07-29

Vinaya HS — Tue, 28 Jul 2009 19:06:30 +0000

A reader writes,

I have been banking with Citibank for the past ten years. They’ve now deducted Rs 250 for not maintaining a minimum balance — without even intimating me. Now, Citibank often calls me offering credit cards and other unnecessary stuff, but they never bothered to call and inform me that they were going to levy a penalty because my salary was no longer being credited to this account. Pathetic service. Have decided to close this account.

In case you want to close your Citibank savings account, you’ll find my experience handy.

Tip Tuesdays: Investing Just to Avoid Paying Income Tax is a Really Bad Idea

Vinaya HS — Tue, 28 Jul 2009 02:03:14 +0000

I often get emails that read,

I want to invest in so-and-so financial instrument so that I can avoid paying income tax. Do you think this [financial instrument] is a good option? Alternatively, can you suggest other financial instruments that will further help me avoid paying income tax?

In my opinion, paying income tax and investing in a financial instrument ought to be independent and mutually exclusive actions. You should invest in a financial instrument only if it helps you achieve your financial goals — and no, “I want to avoid paying income tax” is not a financial goal.

Pay income tax. Define your financial goals. Invest in the right financial instruments; if a financial instrument does qualify for income tax deductions/exemptions, you just got the best of both worlds!

What do you think?

Further reading:

Ask the Readers: How Can I Get a [Duplicate] Copy of My Acknowledged Income Tax Returns?

Vinaya HS — Sun, 26 Jul 2009 16:05:33 +0000

A reader asks,

I have lost my acknowledged (i.e. stamped) income tax returns (form ITR-V) for last year. What is the procedure for obtaining a duplicate?

My opinion: Visit the income tax office in your geography and meet your assessing officer. A requisition letter along with an unacknowledged copy of your income tax returns (Form 16, or ITR-V, or whatever you have) should be handy. You might want to carry your PAN Card along too.

Have you ever been in a similar situation or know someone who was? What do you think this reader should do?

Further reading:

Awareness Fridays: An Insight Into How Your Bank Should Maintain Your Deposit Accounts

Vinaya HS — Fri, 24 Jul 2009 01:39:25 +0000

The Master Circular on Maintenance of Deposit Accounts issued by the Reserve Bank of India — a must read for anyone who transacts with a bank.

Further reading:

Tip Tuesdays: How to Find the Ward and Circle Number for Filing Your Income Tax Returns?

Vinaya HS — Tue, 21 Jul 2009 02:09:59 +0000

If you’re filing your income tax returns on your own, an essential piece of data that you would need is the Assessing Officer’s Ward/Circle number. Thankfully, this information has been made publicly available by the Income Tax Department of India at Know Your Assessing Officer (use Internet Explorer to open this page).

Further reading:

Awareness Fridays: An Introduction to Gratuity

Vinaya HS — Fri, 17 Jul 2009 04:44:33 +0000

This is a guest post from Shilpa at Under the Rainbow. Though Shilpa claims that “she knows zilch about financial planning,” her guest posts never fail to prove the opposite.

Gratuity is a favor or gift, usually in the form of money, given by an employer to an employee in return for the employee’s loyal service. It is an employer’s way of thanking an employee for his loyalty. As per the Payment of Gratuity Act 1972, a company with ten or more employees should pay fifteen days’ salary (i.e. Basic + Dearness Allowance) to the employee on completion of a minimum of five years of uninterrupted service at the time of separation (by the way of resignation or retirement or death).

Gratuity up to Rs 350,000 is exempt from income tax. For a government employee, any amount is tax free. In case of death of the employee, the entire Gratuity is paid to the nominee without any tax deductions. An employer can also voluntarily choose to pay more Gratuity, but that amount would be taxable.

Here’s a simple example:

Mohan has resigned from ABC Pharmaceuticals after twenty years of continuous service. At that time, his Basic salary was Rs 22,000. His average number of work days per month was 22. The Gratuity payable would therefore be (Rs 22,000 / 22 days) * 15 days per year of service * 20 years of service = Rs 300,000.

I’d love to hear from your readers if they’re aware of any real examples — say if a family member or friend has received Gratuity.

Further reading: