Express Money: Ask Us

If I take a health insurance policy, is there a waiting period before which I cannot utilise the insurance cover?

—Rajiv Sabharwal, Mumbai

Yes, there is a waiting period involved. Health insurance cover doesn't commence immediately after taking the policy. There is a minimum stipulated waiting period of typically one to three months before the cover is activated. However, the insurer will pay for situations arising out of accidents during this period.

Is there a postal scheme available for school and college going kids?

—Samaira Hussain, Delhi

'Sanchayika' is a small savings scheme that has been introduced by National Savings Institute (NSI) for school and college kids. This is a program to inculcate the savings habit in children and young adults.

What are the interest rates charged on the monthly usage, cash withdrawal from ATM and late payment on a credit card. If interest rate is 40 per cent, does it mean 40 per cent of due amount needs to be paid as interest?

—Sangeeta, Lucknow

Credit cards need to be managed diligently and it is important you do your research on what, when and why of all the charges of your credit card before you use it. Here is an overview of the details requested by you. Do avoid cash withdrawals as it can prove expensive in terms of interest repaid.

a. Interest/ finance costs: It is primarily the interest rate levied by the credit card company on the outstanding amount if it is not repaid by the due date. This charge can range anywhere between 2.5 per cent- 4 per cent per month; annualised rate turns out to be as high as 30 per cent- 48 per cent.

b. Late payment charges: Every time you make a late payment, the interest is charged. This late payment fee can either be a fixed sum or a certain percentage of the minimum outstanding balance with a minimum and maximum threshold. It varies from one credit card company to another. For example, late payment charges could be 30 per cent of the minimum outstanding amount subject to a minimum of R 300 and a maximum of R 600.

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