Indian Currency Notes INR 500 and INR 1,000 notes pulled out of circulation

• PM Modi today announced that currency notes of Rs 500 and Rs 2000 denominations will not be legal tender from midnight between Tuesday and Wednesday, as soon as the date turns to November 9.

• He said Rs 500 and Rs 1000 notes can be deposited to post offices and banks without any charge till December 30. 

• The move aims at curbing corruption and tackling black money issues.

• Banks would be closed for public business on November 9, to allow them to tackle the rush of people who might want to deposit their notes. 

• ATMs will not work on November 9, and at some places on November 10 as well.

• Cashless fund transfers would remain unaffected.

• Hospitals, petrol pumps, railway reservation counters, airports, crematoriums and other key services will continue to accept the notes for 72 hours, till the end of November 11.

Difference between Saving and Current Accounts

Most of us were initiated into the world of banking with a Savings Account. Then, we gradually added a Fixed Deposit or a Recurring Deposit account to the collection. Then there was the elusive Current Account, which we may or may not have needed to open. We always had a vague idea about how a Current Account works (you know the overdraft facility and all that), but never really understood its functions clearly. This article aims to highlight the differences between a Savings and a Current Account and will also help to clear the haze around the nature of a Current Account.

What is a Savings Account?
A Savings Account is the most common type of bank account. Almost every person you know will have a Savings Account or two. You can open a Savings Account with any public-sector or private-sector bank. As the name suggests, the purpose of a Savings Account is to encourage people to save. How is depositing money in a bank account saving? Well, when you deposit money in a Savings Account, you get interest on it. The more money you deposit in your account, the more you earn in interest. This is not to say that your money gets locked in a Savings Account as with other investment options. You can deposit and withdraw money freely from a Savings Account and the interest is computed on the average balance maintained for a certain tenure (say quarterly). Hence, a Savings Account is the first step in personal money management exercises. It’s also a good choice for individuals earning a fixed salary.

What is a Current Account?
As with a Savings Account, you can open a Current Account with any public or private-sector bank. However, it makes sense only for businesses because no interest is given on the balance in a Current Account but deposits and withdrawals are unlimited and do not attract a fee. In essence, it’s like a Savings Account, but with add-on features that can help businesses. A Current Account has many advantages. It is perfect for businesses and companies where free flow of liquidity is essential to keep the engine chugging. You also get an overdraft facility, payment on standing instructions, apart from unlimited withdrawals.

With the basics covered, let’s look at the following table to understand the differences between the two.

Wasn’t that simple? We hope we’ve clarified all your doubts on the two accounts. If you have something to say about a Savings or Current Account, leave us a comment in the comments section below.

Understanding Debt Consolidation

Debt consolidation involves taking out one loan to pay off many others. 

This is often done to secure a lower or fixed interest rate, or for the convenience of paying only one loan.    

How does it work ?

Debt consolidation more often involves a secured loan against an asset that serves as collateral, say a house. In that case, a mortgage is secured against the house.  Deb Consolidation allows a lower interest rate than without it, because after consolidation, the asset owner agrees to forced sale of the asset to pay back the loan. The risk to the money lender is reduced so the interest rate goes down.

Here are some debts which you can eliminate through unsecured debt consolidation program or service:    

• Credit card bills
• Unsecured loans
• Utility bills
• Hospital bills
• Payday loans

From above list, Debt consolidation is most advised when someone is paying credit card debt. Credit cards can carry a much larger interest rate than even an unsecured loan from a bank. 

Any relation with credit score ?

Generally, the effect of personal debt consolidation on your credit score is better than that of bankruptcy. Unlike bankruptcy, a consolidation program does not destroy your credit rating. Rather it makes a positive influence on your credit score. If you're regular with your monthly payments on all your debts and do not incur any new debts, your score improves.

Is Debt Consolidation free?  

No, companies providing debt consolidation service will charge you. After a written agreement is signed, a payment method is agreed upon, and the company has received minimum payment. Most companies charge some percentage of the money saved after debt consolidation.