Banking: Prashant Joshi

Following the rate rise by the Reserve Bank of India, a lot of banks have raised their base rates. They are also expected to raise deposit rates, especially in the short term. I started a fixed deposit, about six months before, for two years. Should I shift to a deposit paying a higher rate? Are there any charges? If yes, how much?
An existing fixed deposit cannot be switched to a new one. You may, therefore, pre-close your existing fixed deposit and then open a new one, with a higher rate of interest. Your bank, however, will apply a penalty (normally at one per cent). The penal rate is deducted from the interest rate payable for the tenure, till your fixed deposit has been pre-closed. For example, if your account has completed 180 days, and the applicable interest rate for that period is six per cent annually, then your bank will pay interest at five per cent a year, that is, after deducting the penalty. Please note the guidelines with respect to levying the penal rate may vary across different banks.

My son, working in the US, wants to remit funds to my account. He wants to send foreign currency cheques. Can these be deposited in the regular savings account? How much time does it take to clear such a cheque?
These cheques can be deposited in resident savings accounts. The time, however, to realise these cheques can be anywhere between 14 to 21 working days, depending on the bank and the location. A better option is to advise him to remit money either through a wire transfer (SWIFT) or online money transfer (offered by most of the leading banks). These options are cheaper and quicker.

I had taken a personal loan from my company, which I couldn't repay. It was settled with my provident fund payout. I want to apply for a car loan. Is my credit history tainted? Or, can I pay a higher interest for the loan? I can service the loan now.
Whether your loan would be rejected outright would depend on the credit policies of the lender. It is advisable not to default on loan repayments, as it may result in a negative record at CIBIL, or with any such other agency, even though you are capable of servicing the loan.

The writer is managing director & head, private & business clients (India), Deutsche Bank. The views expressed are his own. Send your queries to yourmoney@bsmail.in