Is Private Banking A Right Decision? Find Pros & Cons

Today, private banking is a popular concept and already has made its influential place among investors to assist them in managing their investments, tax procedures, and many more areas along with the regular banking & financial services. If you are also a businessman and looking for availing of private banking services, this blog can help you to avoid the possible risks by making you aware of its certain pros & cons. But before we start, let’s understand what private banking is.

What Is Private Banking?

The concept of private banking revolves around a set of more personalized banking & financial services/products that are being provided to individuals with high net worth by banks or FIs. You can understand it by the term “Private” that stands for more personal services than regular banking. It includes investments, tax planning, portfolio management, and estate planning & many more.

Pros of Private Banking

The clients enjoy several benefits when they use private banking. As more & more banks are getting digitized, it is quite easy to get in touch with an expert to consult on various banking matters. Some of the pros of private banking are here as follows:

1. Privacy - The biggest benefit of getting private banking services is a high level of privacy. Be it private banking’s clients, their financial evaluations, or personalized services offered to them, all related banking data is kept private, confidential & anonymous. It is essential as it helps private bankers avoid exposing/revealing the offered services from their competitors.
   
   
2. Investment Options - Clients that apply for private banking get a plethora of investment opportunities through private bankers. Apart from this, they are also provided with suitable & appropriate resources & products to manage their financial activities better.
   
   
3. Personal Interaction Than Others - As we have mentioned earlier, customers with private banking services get personal attentiveness from the bankers who work closely to determine investment goals. Not only it eliminates the frustration of being on hold over a phone call to communicate with the available authorized person but also you get the assistance of bankers who are aware of your financial situation. 
   
   
4. Perks & Discounts - Private banking clients also get many valuable & noticeable perks & discounts from banks such as discounted loan rates, or refunds on fees for ATM withdrawals or some foreign transactions, etc. Many private banks also arrange exclusive events for their private clients.
   
   
5.  Positive Outcomes - The private bankers are experienced experts who are passionate about fulfilling your investment goals and make smart decisions for their clients focused on positive returns on investments. 

Cons of Private Banking

Additionally, there are some disadvantages also of availing of private banking services. Here they are as follows:

1. Uncertainty - The concept of private banking tends to witness a high turnover rate. It means that often the particular private banker that has been assigned to handle your investment requirements may change and you are bound to repeat the same process and build a relationship with them to understand their personalized service.
   
   
2. Low-Interest Rates - It often happens under private banking where you need to put your money in various accounts & investments. That means, you have several saving accounts and many private banks pay low-interest rates on those savings. Instead of doing this, you could get much more interest by keeping your money with a bank that doesn’t offer private banking.
   
   
3. Dispute of Interests - You need to understand one more fact that the private bankers are paid by their banks or financial institutions that employ them rather than being directly paid by their clients. This could invite disputes of interests where they need to think about whether to favor your interest or their banks.
   
   
4. Management Fees - Private banking is generally associated with a higher management fee than regular banking. You may need to pay it either as a monthly service fee for bank accounts or a percentage of your investments which raises a pretty much attractive amount to them as you provided quite a large piece of investment to the institution. So before availing of private banking, be aware of its fee structure.
   
   
5. Limited Services - Although private banking provides you access to good investment deals, it could generally be restricted to the proprietary products of the banks. Additionally, the private banking services, be it an investment, tax, or anything else, will be professional ie. you will get perhaps less creative services.

Looking for private banking services? There are several banks & financial institutions out there providing innovative & exceptional private banking services to a plethora of individuals. Go through them carefully and choose the best after considering these pros & cons.

5 Money Saving Tips to Keep You Financial Fit While Planning to Move Abroad

Moving to a different country is a dream that almost everyone out there has thought about in their childhood. Where it is very thrilling to know that one is getting the opportunity to move overseas, thinking about the financial aid of the shift is also an important plot to take care of. Be it a job opportunity or planned trip – moving overseas itself sounds expensive and requires a lot of pre-planning work.

No matter how much you keep adding to your personal savings account, relocating comprises many hidden expenses that you get familiar with only after one visit abroad. From the booking of tickets to finding a safe place to stay, every single process asks for a lot of detailed inspection and funds. And, you need to be extra wise and play safe all the time.

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     Originally posted:- https://www.axioscreditbank.com/blogs/5-money-saving-tips-to-keep-you-financial-fit-while-planning-to-move-abroad

Top 8 Questions About Currency Trading

International Foreign exchange is unfamiliar terrain for all retail traders, though the foreign exchange market is the biggest expanded financial market in the world. Until the time internet trading became popular, Forex was earlier the only path of large and big financial institutions, companies hedging funds, and multinational companies. Now, the time has changed. Nowadays, individual and private investors are hungry for taking all the data and information about forex. Whether you need a fresher course based on currency trading or you are a forex novice, here, we have answers for some of the most asked questions that are concerning the foreign exchange market.    

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      Originally posted:- https://www.axioscreditbank.com/blogs/top-8-questions-about-currency-trading

15 Key Questions Venture Capitalists Will Ask Before Investing in Your Startup

Getting your business pitch ready is not an easy job. With cheesy people skills and communication, you must know how to captivate the International banking services and angel capitalists for easy finance services. The explosion of business riches and rewarding apples is earned through intelligent tactics and manipulations in business. You must know your weaknesses than your strengths before earning business services. The capitalists will drown you under the sea of tacky and perplexing questions. With your weaker and fragile answers, you may create a roadblock in your business path and weaken your startup finance service. A well-rehearsed answer for the pitch has to be sculpted for a good experience to paralyze the economic challenge so that you impress Investment banking services. Obviously, the angel capitalists will churn you out through the customary- you -know-whats session to expose your stark reality before providing your business services. Your reasonable answers must get filtered through their interrogation sales funnel. Creation of halo and beta impression, simple, thoughtful, and smart answers have to be constructed for their counterpart so that your business highway is cleared of muds and ditches of economic challenges and you get easy business investment. No doubt, the venture capitalists will put gotcha questions and break your key secrets of business strategy and goal.

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         Originally posted:- https://www.axioscreditbank.com/blogs/15-key-questions-venture-capitalists-will-ask-before-investing-in-your-startup

What do you mean by import finance and how is it beneficial for a business?

 In simple terms, Import Finance implies funding the gap of goods collection and making the payment. In addition, Axios Credit Bank Ltd. can say that it is a kind of short-term financing and generally the third party issues it. The funds that businesses or individuals use to bring the goods and services into their country are Import Finance. There could be some issues while managing the cash flow statements of the company. It is because the frequently involved disruptions and complications imply that the payment has been made a long before the delivery of the goods.

Apart from this issue, there are clearly various advantages of importing such as – quality of goods is high, lower prices will get a competitive advantage as well. By doing an overseas business, there are many challenges as well that any businesses have to face. They have to follow the extended payment terms, have to risk the business more than available funds, and have to purchase goods in large volumes. It will totally depend upon the risk taken that it would work as a miracle or a disaster.

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      Originally posted:- https://www.axioscreditbank.com/blogs/what-do-you-mean-by-import-finance-and-how-is-it-beneficial-for-a-business

All You Need To Know About Trade Finance

Global trade and export financing markets are getting reviewed by trade finance since 1983. There can be various definitions to understand the suitable meaning of trade finance.

Axios Credit Bank Ltd. has described this term as both “Science” as well as “an impressive term.” It is a science because it manages the requirement of capital in a business for global trade. However, there are many tools within the science at the disposal of financiers, which determine the way cash flows, how the companies can utilize credit, investments, and others for international trade.

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    Originally posted:- https://www.axioscreditbank.com/blogs/all-you-need-to-know-about-trade-finance

How Different Types of Trade Finance Work as a Part of the International Trade?

There are several kinds of finance available in the market that can facilitate the trading of goods both nationally and internationally. We also helps and accommodates Trade Finance Services that facilitate international payments for selling and buying goods globally. Axios Credit Bank Ltd also mitigates currency risk and exposure for both debt and equity fundraising.

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         Originally posted:- https://www.axioscreditbank.com/blogs/how-different-types-of-trade-finance-work-as-a-part-of-the-international-trade

Guide to Letter Of Credit: Definition, Types, and Procedure

 

Being a global businessman, you have probably heard or aware of the term Letter of Credit. Today, the letter of credit has become a crucial and important part of international trade that soothes the smooth international transactions made by any businessman. What is it exactly? Find out.

Guide to Letter Of Credit

Well, a letter of credit is a document issued by one bank to another with a guarantee to pay a specified sum of money to the seller on behalf of the buyer. In simple words, if the particular buyer is not in a condition to pay the seller on time, the payment will be made by the bank. It is an important document in the case of international dealings and is one of the major financial services that are required by global businessmen. One of the most important & crucial functions of a letter of credit is that buyers and sellers both can reduce their risk and ensure on-time payment with the delivery of goods and services.

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Originally posted:- https://www.axioscreditbank.com/blogs/guide-to-letter-of-credit-definition-types-and-procedure

Financial Standby Vs. Performance Standby Letter of Credit - What is the difference?

 Letter of credit is a legal document issued by the importer's bank in the favor of the importer's guaranteeing beneficiary that the payment will be made or terms & conditions of the contract will be fulfilled by the importer. But in the event, if the importer is unable to do this, the whole or remaining payment will be done by the issuing bank. But a Standby Letter of credit is slightly different.

What Is A Standby LC?

Putting it in simple words, a Standby Letter is also a legal document issued by the buyer's bank guaranteeing payment to the seller but it only activates if one of the parties to the contract defaults on the agreement. For example, if the purchaser does not fulfill the terms & conditions of the contract or does not pay, the beneficiary can activate the standby LC and get compensation from the bank.

Example of Standby LC

As the name suggests, in a Standby LC, the bank is on “Standby mode” in regards to an agreement where it will only have to pay where there is any default. For example, an importer executes a transaction with a foreign vendor to ship 1000 widgets on open credit. To protect payment risk, the vendor requests the importer to deliver a letter of credit as part of their agreement. The importer applies to his bank for a standby LC and due to his sound credibility, the bank issues the letter and forwards it to the sender. Now, if the importer fails to meet terms & conditions, the vendor can submit the proof documents to the importer’s bank and get the payment from the bank. Axios Credit Bank is a popular financial platform offering international trade finance, letter of credit/standby LC, and other offshore banking for corporate imports & exports.

What Is Financial LC?

You can understand the Financial LC as an irrevocable undertaking by the bank guaranteeing the beneficiary that the payment will be done on time for his delivered goods & services by the importer. But if the importer fails to do so, it will be paid by the bank to the beneficiary. The bank makes the payment in full as a financial LC has a 100% conversion factor. Before issuing, the importer’s creditworthiness is evaluated by the bank and for the customers with no so sound credit record, banks can demand collateral or funds on deposit.

What Is Performance LC?

Performance standby LCs are also an irrevocable undertaking by the issuing bank but it is given in regards to paying the beneficiary in case there is a default made by the importer in performing terms & conditions of the contract. In simple words, a performance LC assures the beneficiary that the importer will meet the contractual obligations of the contract but in case if he makes a failure, then the bank will pay 50% to the beneficiary.

Bottom Line

A standby LC is a growing need for businesses dealing in international trade & transactions. It helps the exporters to get assured of receiving payment on-time for their goods & services from the importers. But if for any reason, the payment is not made, they are assured of receiving their payment from the issuing bank. In short, it provides confidence to both the parties dealing in international trade. If you are an international businessman, you can contact Axios Credit Bank to avail of a variety of global trade finance services at affordable rates.

Bank Guarantee Vs Letter Of Credit - Find The Salient Differences

What is the difference between the Bank Guarantee and Letter of Credit? This is the most common question that people involved or dealing with national or international trade have been struggling with for a very long time. And this is not surprising at all. Both of these terminologies look similar and provide similar benefits to buyers and sellers. A bank guarantee and letter of credit both are promises from a bank or financial institution that the sellers would be paid on-time with the full amount in exchange for their services regardless of the financial capabilities of the buyer. In both of these concepts, the bank guarantees and assures the third-party that if the buyers are not capable of repaying, the bank will pay it on behalf of them.

Whenever any businessman wants to deal with import-export business or expand his business in the different corners of the world, he needs assurance from the buyer to get paid on-time after delivery of goods or services. This is done by banks both in case of national and international business but the main difference is that bank guarantees are often used in real estate and infrastructure to reduce the credit risks in domestic markets whereas Letter of Credits is used in other commodity international markets.

To understand the difference between these two, we must understand their definition first. Here we go:

What Is a Bank Guarantee/ Standby Letter Of Credit?

As the name suggests, in these services, a bank gives the guarantee to the beneficiary (Third-party) on behalf of its customer to pay the full-amount on-time in the event of default by its customer ie. buyer. It is a commercial instrument that takes place in public tenders or government-related works in the domestic market. So the bank guarantee has the same functions but in different ways. It is used in mitigating the risks in real estate and infrastructure projects.

Types of Bank Guarantee

• Financial Guarantee
• Performance Guarantee

What is a Letter of Credit?

A letter of credit is a financial instrument issued by the buyer’s bank to the seller to assure on-time payment after the terms and conditions mentioned in LOC are met by sellers. Every letter of credit has certain terms and conditions which are required to be fulfilled by both buyers and sellers for executing the transaction successfully. Here the sellers get guaranteed payment of their sale of goods from the buyer’s bank in case of international trade.

Types of Letter of Credit

• Commercial
• Revocable
• Irrevocable
• Confirmed
• Unconfirmed
• Back-to-Back
• Red Clause
• Transferable
• Un-transferable
  

Key Points Of Differences Between Bank Guarantee And Letter Of Credit:

Basis	Letter Of Credit	Bank Guarantee
Boundary	It takes place in international markets.	It takes place in domestic markets.
Protection	It also protects both the parties but favors sellers.	It protects both the parties but favors buyers.
Parties Involved	5 or more	3
Industry Type	It is used by merchants in international  markets	It is used by parties involved in real estate and infrastructure developers.
Bank Liability	Primary	Secondary
Preference	It gives preference to the fulfillment of the terms and conditions of LOC	It becomes effective only when there is a default made by the buyer in making payments
Payment Time	Bank only pays when the Terms and conditions are met by both the parties	Bank makes payment when the contractual obligations are not fulfilled
Frequently Used In	Import and Export Business	Government-related work

Other Points Of Differences:

• A letter of credit issued by the buyer’s bank to the seller’s bank is an acceptance of the invoices presented by the seller and a guarantee to make payment after the fulfillment of terms and conditions of the agreement. Whereas in the bank guarantee services, the guarantee given by the bank to the beneficiary on the behalf of the applicant will only be effective if there is a default made.
• In a letter of credit, the bank bears the risk of the primary liability where it collects payment from the client afterward anyhow but on the other hand, the banks stand secondary as it will pay only when the buyer is not capable to do so.
• In the case of international trade, the involved merchants in the import and export of goods will consider letters of credit to ensure delivery and payment due to foreign countries and distance issues. In contrast, the contractors who are bidding for real estate or infrastructure projects will ensure their financial credibility through a bank guarantee.

Final Words

A letter of credit is used when there is a high level of risk involved in business globally but with the time, it is also being used in domestic trade. In simple words, it does not matter whether it is a domestic or international market, the buyer always wants to make sure on-time delivery of goods while an assured payment is a seller’s right. Both instruments are there to reduce your risks.