In this article we will learn about what is personal banking? starting with meaning of personal banking towards understanding more about different types of personal banking products and services offered by banks and financial institutions.
It is important for us to gain knowledge about different services offered to customers. Mostly everyone knows basic products and services like: saving, fixed deposits, overdraft, cash withdrawal and check payments. When you know more details above more products, you can chose the best types of investment product which can give more returns than fixed deposits. You can chose to pay save your money on interest payment in various other different types of loans and more. So lets get started and get the overview on understanding banking products, services and solutions offered to customers.
Personal Banking Definition
Personal Banking is also termed as Retail Banking. It is one of the types of banking products and services which are offered to retail customer. Services like personal loan, debit cards, credit cards, mortgage loans, savings etc. are offered by banks as a personal financial solution to the retail customers.
In order to make a sound financial plan, one needs to know all the resources and available options. In general, people don’t have enough knowledge and failed to pick the best options they can opt for. So, while dealing with personal finance, it is important to know all the available banking products, options and resources one may have. A detailed study of every available option is required so that one can do the comparison and hence can select what is best for him.
Personal Banking Products and Services
As a part of managing your personal finance, one should be aware of the various different types of banking products which can be useful in either your savings and budgeting plan or your retirement plan. Below are some of the important personal banking products which everyone should know about:
Personal Banking Product: Bank Account
One of the most common bank products which is known to all. For personal banking, banks have an option of savings accounts. For those who are into business or are self-employed (professionals) have the option of current accounts. The terms and conditions are different for both. In general, saving accounts are personal accounts and are able to save your money is better way (like less fee and better interest). For saving account holders, banks generally offers various facilities to do banking with ease such as:
- Call Center.
- Mobile banking.
- Online banking.
- Relationship managers.
- Telephone banking.
- Video banking.
- DSA (Direct Selling Agent).
Besides saving account, there are several different types of bank accounts available. For example – 3-in-1 Account of ICICI bank, Salary Account, Pension Account, Child Education Plan (Minor account), Outward Remittance, Exchange Earners’ Foreign Currency Account, etc.
Generally, bank has a solution of almost all requirements of individual, a family unit, as well as a business. So, it is always advisable to talk to the bank officials before you decide to go for any product. Ask them to suggest you best product for your need. Discuss the needs in details with them.
Personal Banking Product: Cards
Another awesome product offered by personal banking to everyone for saving their time while doing transaction with bank. Some cards are just for avoiding carry cash all the time and some cards are for having quick loans from back. The popular cards are:
1. Debit Cards: The card which reflects your bank account. Generally, these cards have some or the benefits offered at best online shopping sites like cash back etc. So, just be aware of taking full advantage.
2. Credit Cards: Something to handle with care. These cards are like pre-approved bank loans which you can take it instantly when needed. Generally, people use it for shopping and pay the credit card bills before their interest starts (generally after 15 to 45 days).
3. Other Cards: There are several other cards such as Commercial cards, Prepaid Cards, Travel Cards, Unifare Metro Cards etc. And not only have this, each of these card types had further kinds of cards. For example – Travel cards have further cards like PayDirect Card, Pockets, Gift Card, Meal Card, Indian Rupee Travel Card, Saral Money Prepaid Card, Reimbursement Card etc.
Personal Banking Solutions: Deposits
These retail banking products are designed to give facility to individuals to deposit their savings and let them earn interest on their savings. Some of the deposit products are:
- Fixed deposit account.
- Fixed Deposit (without premature withdrawal facility).
- Recurring Deposit.
- iWish flexible RD.
- Thomas Cook Holiday Recurring Deposit.
- Tax Saving FD (Fixed Deposit).
- Money Multiplier Fixed Deposit.
- Security Deposits
Personal Banking Services: Investment Products
Banks offers options to those individuals who want to earn money at a faster rate than they can earn with saving accounts or deposits. Personal banking executive call such individual to participate in the stock market or share market. The risk of losing money as well as earning money fast is the core nature of this type of investment. Some of the most common options are –
- Demat accounts.
- Public Provident Fund.
- Mutual Funds.
- Sweep Accounts.
- Money Market Account.
- Stock Exchanges.
- Derivative and Commodity Exchanges etc.
Personal Banking Services: Loans & Mortgage
Almost every individual, sometime in his life, has to take a loan from banks. Retail banks offer a wide range of loan products. Some of the most common loan types are –
- Home Loan.
- Car Loan.
- Personal Loan.
- Gold Loan.
- Loan Against Securities.
- Commercial Business Loan.
- Education Loan.
- Marriage Loan.
- Travel Loan.
- Transferring of personal loan from high interest rate from one bank to another bank is now a common practice. Most borrowers are now choosing for a Personal Loan Balance Transfer to get low interest rate as a advantage in the market.
- Pradhan Mantri Mudra Yojana (Micro Units Development & Refinance Agency Ltd. (MUDRA) is a new institution set up by Government of India to provide funding to the non-corporate, non-farm sector income generating activities of micro and small enterprises whose credit needs are below 10 Lakh.)
Personal Banking: Insurance Products
Insurance provides the protection in terms of finance. The business of insurance is running on the concept of sharing the loss. When there is a loss to the insurance holder, his loss will be paid by the bank of which he holds the insurance. There are several products for one need. Every insurance company offers dozens of products for every need. So, here comes a big responsibility on the soldiers of every individual to know, research, and investigate around the major products of his every need before buying. Insurance agents are there just to make their own sales. Hence, it is highly recommended to take responsibility in own hands. Below are the common insurance products provided by personal banking services in needs of every individual or a family unit:
1. Life Insurance: Some popular plans are – term plans, wealth plans, retirement plans, child education plans.
2. Health Insurance: Just to cover up the medical bills and emergency medical help.
3. General Insurance: This is for the risk cover of property loss, such as home insurance, car insurance, factory or shop insurance etc.
4. Card Protection: This is for the protection against loss of different cards mentioned above i.e. credit card, debit card, loyalty card and membership cards etc.
This is just an introduction to most popular and commonly used options and personal banking resources. There are still much more things to know. There is seriously a wide range of options available, and they are increasing as well as changing regularly. So, personal finance is a lifetime improvement demanding thing.
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Personal Finance Basics for Beginners Module
- Chapter 1: What is Personal Finance? Definition, Examples, Basics, Management
- Chapter 2: Financial Assessment of a Company or an Individual
- Chapter 3: Primary Objectives and Goals of Financial Management
- Currently Reading: Personal Banking Products and Services of Financial Management
- Chapter 5: Income Tax Slab, Deductions, Tax Planning Strategies for Individuals
- Chapter 6: Difference, Relationship, Importance of Savings and Investment
- Chapter 7: Types of Insurance offered by Insurance Companies
- Chapter 8: What is Debt Management? Definition, Examples, Strategies, Plans
- Chapter 9: What are Wealth Creation Strategies, Ideas and Tips?
- Chapter 10: Personal Financial Assessment and Monitoring Techniques
- Chapter 11: Basics of Personal Finance Quiz – Question and Answers
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