Money For Investment

One of the dilemmas facing businessmen all over the world is , how do I make the best use of the cash being generated by my business ? Should I reinvest it in the business or is there any other use of the same where I can get better returns? So, to answer this question, we must first analyse following ? 1. What is the return expected from your business? Is it less than what you would get from investing in Bank FD or Mutual funds? 2. How much risk appetite you have with this surplus cash ? If your risk appetite is less then you may invest the money in FD with banks. If you can take little bit of volatility , then invest in Mutual funds. If you have stomach for equity markets, then you would be better off investing in direct equities and let the market work its magic on your surplus cash. 3. Whether you would need money in near future to run your business? If you will need this cash in near future , then simply go for FDs which can be liquidated anytime, else look for suitable inve...

Investing is all about buying cheap and selling for a profit and thus we all are always on the lookout for the next big investing opportunity where we can buy cheap and sell for a premium. Is this concept possible when it comes to Mutual Funds ? Can we buy cheap mutual funds ? or better are there any cheap mutual funds? What are CHEAP Mutual Funds : Lot of people consider mutual funds with Low NAV as being cheap mutual funds to invest , which is a completely wrong notion since NAV being high or low has no bearing on the returns given by the fund. For example , a fund with low NAV may give lower returns than fund with higher NAV is the underlying stocks of the second fund do better. Also low NAV may be indicative of poor past performance . Thus simply investing in mutual funds with LOW NAV may not be same as investing CHEAP for selling for a PREMIUM. Understand this difference. So, what should you do if you are looking to invest CHEAP and sell for a PREMIUM? If you are from United ...

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The dream run up in Gold prices in last few years has enticed all and sundry as an attractive investment asset class. It has not only proved to be an excellent hedge against inflation a, reputation it holds with elan since time immemorial, but also, has delivered returns in excess of debt, equity etc as an asset class. Thus , it has emerged as the Best Investment Option in last few years. However, skeptics believe that gold has had its share of dream run and may not be possible for investors who are entering into now, to expect the same kind returns in future . But, if you are on of those who believe that best years of gold as an asset class is still ahead of us and want to invest in physical gold then you must be pondering where should you buy the gold from? These days we have seen most of the banks aggressively positioning them as place where one can buy physical gold bars/coins etc. The other option is offcourse our old Jeweller , both unorganized and large organised players...

Recently IRDA has allowed Insurance companies in India to launch Pension plans after a gap of over 2 years . Earlier, the insurance companies did have pension plans in the market, but , the regulator viz IRDA had asked them to withdraw all such plans and as such we had a situation where there were no "Pension" plans available in India for some time. However, it has been allowed again . While doing so IRDA has mandated few changes in the product design/features which are aimed at safeguarding the investors interest like offering minimum guaranteed returns etc.   So , as a person wanting to secure your post retirement years, should you be investing in them? The short answer to this question is NO . Let me elaborate on this.   1. High charges :   Most of Pension Plans offered by Life Insurance companies today, have very high cost structure. Most of the Products have charges to the tune of 4-5% of the overall yearly premium/contribution that you make in the pl...

Best investment option for Retired Person There are broadly 2 kinds of retirees viz 1. Those who draw pension from their employers 2. Those who dont have any pension from Employers . Now lets look at how each one of them should approach their investments for post retirement phase. 1. Retired Persons having Pension from Employers  Since they already have some kind of pension income coming in they are better placed and have less daunting task to plan for this phase of their life.  They need to do following things : 1. Buy a comprehensive Health Insurance Plan - There are lot of general insurance companies in India who are offering health covers upto 65-70 years . There are few options from Life Insurance Companies where one can have the health plan before 70 years and then can continue to renew it for their lifetime. Example is Health Assure Plan for HDFC Life. It is an absolute must that you cover yourself adequately against any untoward health shocks at this stage,...

Filing Income Tax returns is one of the activities about which there is lot of anxiety among lot of people .  We need to understand that while filing ITR is important and necessary , it is also important that we do so correctly . So what are the things that you should keep in mind while filing ITR. 1. File ITR within specified time - The first things that you must ensure is that you file the ITR within the specified period and not delay it. Any delay in filing ITR ( especially wehere you have to pay taxes ) may attract penalty from the Govt .  And  as such , sticking to the timeline is a great idea. 2. Disclose all incomes - The most common mistake tax payers make is failing to report all the sources of their income. One type of income that is forgotten by many individuals is interest earned on a bank savings account and on Fixed Deposits (FDs). This income is taxable according to your respective tax slab. Usually banks deduct 10 percent as Tax Deductible at Sou...

Its that time of the year again when all of us scramble to do tax planning. We have lot of options under Sec 80 C of the IT act to invest upto Rs 1,00,000 and save taxes on it. Some of the options under Sec 80C are as under:- 1. ELSS 2. Insurance Plans - ULIPs 3.PPF 4.PF and VPF( Voluntary Provident Fund) 5. Tax Saving FDs There are quite a few other options as well like deduction on account of paying tuition fees for kids, housing loan deductions etc. Out of the 5 options listed above, ELSS is my own favourite for following reasons:- 1. It has lock in period of just 3 years . This is lowest among all the options available. 2. It gives you equity exposure while PPF and FDs give only debt exposure. 3. Is more likely to give inflation adjusted positive returns . So , if you are looking to invest in ELSS, following are the top ELSS schemes that you may consider. Happy Investing!!

What are CTS  Compliant Cheques ? CTS is an acronym for Cheque Truncation System . CTS is a new clearing system proposed by RBI wherein the need for physical movement of cheques between drawer bank and drawee bank will be eliminated. In place of physical cheques , only the image of the cheque having relevant information like MICR code , date of presentation, bank details etc will be sent for clearing. The cheques used for such clearing are called CTS complaint cheques. What are the advantages of CTS based clearing system ?  Following are the advantages of CTS based clearing system: 1. Since the need for physical movement of cheques is removed, the whole process of clearing will be faster . One will be able to get credits ion their account faster than is possible today. 2. This will result in lower cost in clearing since banks will save money which is currently spent in physically moving cheques from one place to another during the clearing process. 3. Lower scop...

Rajiv Gandhi Equity Saving Scheme ( RGESS) is  s a new equity tax advantage savings scheme for equity investors in India. The scheme got it's approval on September 21, 2012. It is exclusively for the first time retail investors. The investors who invest up to Rs.50,000 in 'Eligible Securities and MFs ' and have gross total annual income less than or equal to Rs.12 Lakhs will benefit from a new section 80CCG under the Income Tax Act, 1961 on 'Deduction in respect of investment under an equity savings scheme' has been introduced to give tax benefits. Example : Let us say, you invest Rs.50,000 under RGESS, the amount eligible for tax deduction from your income will be Rs.25,000. Alternatively, if you invest Rs.40,000 under RGESS, the amount eligible for tax deduction will be Rs.20,000. So you may save about Rs.2,575, Rs.5,150 for income tax slabs 10% and 20% respectively under this scheme. Who can invest in it ?  Individuals who have never invested...

What is an HUF?   Down the ages, the Hindu community has largely believed in the concept of joint families, joint income and joint property that is shared and enjoyed by all the members of the family. This concept is now recognized as a legal expression in the form of the Hindu Undivided Family (HUF)– a rather efficient tax-planning tool under the Income Tax Act.   How do you form HUF?  As the name suggests, an HUF is a family of Hindus. However, under the tax laws, even Jain and Sikh families can set up HUFs. Typically, an HUF will consist of a person who have lineally descended from a common ancestor, and includes their wives and unmarried daughters. Do note: in Maharashtra, even married daughters are recognised as HUF members.   While the senior most member is called the karta (manager), the male members are known as coparceners, and the females are referred to as members. In the ordinary sense, an HUF should consist of at least two male members. Howev...

For those who travel abroad frequently either due to personal or professional reason have to carry foreign exchange with them for using it during their stay outside the country. Most of the people carry currency notes with them which is fraught with various risks. But if you want to avoid the risk of travelling while carrying currency notes , you may seriously consider taking forex cards given by the banks for this purpose.   What is Forex Card?  Forex card is a plastic based card like a debit card or credit card, which is prepaid in nature. The person taking the card can get the desired amount in the desired currency loaded on the card which can be subsequently utilised while on tour. The person needs to approach the bank and pay in Indian rupees for the equivalent amount in foreign currency which needs to be loaded on the card. Who issues Forex Card?  Most of the to league banks in India do offer forex cards to their customers. One can approach bank like ICICI, SBI,...

For those of us who have Demat Accounts and want to change from one Demat account to another for any reason will have to first get the holdings transferred to the new Demat Account before the account can be closed and you can fully migrate to the new account. So, if you are wondering how can you get the share holdings transferred from your current Demat account to the new one, then read on. 1.Transfer from one Demat Act to another Demat Act of the sole owner :- In case , the transfer of shares is from one Demat account to another Demat account held by the same person in his sole capacity, then he/she needs to fill delivery instruction slip giving the details of the shares to be transferred and the same shall be submitted with the depository. These delivery instruction slips are available with the depository and are like cheque leaves which we use to tranfer money from our account. 2.Transfer from Joint Demat Account :- In this case too, the delivery instruction slip will have to fil...

Till not very long ago, gold or gold jewellery was considered to be most sacred of family possessions in India, and a family would do its all to avoid selling it or  mortgaging gold for taking a loan on it. But, slowly but steadily things are indeed changing in India with many gold loan companies setting up shop and driving home the point that there is nothing wrong in taking loan over gold. One of the gold loan Finance company asks" Jab Ghar me pada hai sona toh phir kyun hai rona?". This has resulted in huge off take in gold loan sales in the country . But does it make sense for you? Do you really understand what it is ? How can you take benefit from it ? Lets try and understand each of these in the following paragraphs. GOLD LOAN - What is it? Gold Loan is a loan given against the security of the gold bar/coin or jewellery . The loan seeker needs to mortgage his/her gold with the bank/NBFCs against which they get loans upto 75% to 95% of the gold v...

Its not uncommon to find people among us who have suffered at the hands of the mediclaim insurers during claim settlement. There are numerous instances where claim is rejected by the health insurance company on technical/material grounds.  This defeats the basis purpose of getting help when needed. So, what can you do to avoid this? Try these steps :-  1. Check Fine Print for Expense Coverage - The mediclaim polices generally list down the limit of expenditure that is allowed to reimbursed under room rent/ambulance hire charges etc. This  limit varies between policies of various companies and hence before you get yourself admitted to any hospital , it is always advisable to check the expense limit allowed as per your mediclaim .Any extra expenditure done on account of thee heads is generally borne by the patient himself/herself.   2. Check for exclusion in Diseases - You must also check the number and nature of diseases covered under your mediclaim before you buy...

After stupendous success of mobile number portability introduced by TRAI , IRDA too has taken a cue and introduced health insurance portability in India from 1st October 2011. This is a huge step in the right direction considering there was lot of discontentment among the consumers about the manner in which they were being treated by their health insurers. Some of the common grouses were: 1. The health insurance companies mandated on a waiting period for covering pre existing diseases to each and every customer once he comes in their fold, irrespective of whether or not the person had any other policy where he had served out the waiting period. So in effect , every time you changed the company , you would have had to start the waiting period all over again. 2. The insurers generally were resorting to increasing the renewal premium by a steep margin for those policyholders who have had a claim in the year. This was mostly done to discourage the policyholders from renewing the policy wi...

Tax saving FDs offered by banks in India are good option for someone looking to save tax under Sec 80 C without taking any risk that is inherent in equity exposure that ELSS offers. So, if you are one of those conservative investors who want to save tax via FDs , then it would be pertinent to know which banks are offering you the best deal currently.  Following are the 5 best Tax saving FDs that are being currently on offer ( as on Sept 11).  Rank   Bank                                Rate On Int.(p.a.)  Rs 10000 will grow   1.   Tamilnad Mercantile Bank    10%                             Rs16386.  2.    City Union Bank                   9.75%           ...

There have been times , when we have been faced with situation of transferring money from bank account to another account without visiting bank branch. One can do cash transactions via netbanking if one doesnt want to visit the branch or the branch timings are over. But what if we in a place where internet isnt available and we need to transfer cash immediately . Relax, we have a solution now. Resereve Bank Of India has now allowed cash transaction upto Rs 50000 from mobile phones . To do so , we need to follow the following steps:- 1. Register with the bank for interbank Mobile Payment Service (IMPS). 2. Download the application on the mobile phone. 3. Log in to the application 4. Select bank account from which funds are to be transferred. 5. Select mobile money transfer service. 6. Enter 10 digit mobile number, 7 digit MMID and desired amount to be transferred. 7. Confirm all the details. 8. Done. You will recieve sms confirming the same. PROS OF THE FACILITY 1. Another p...

"The desire for gold is the most universal and deeply rooted commercial instinct of the human race." Gerald M. Loeb The above mentioned adage perfectly sums up the love investors have showered on the precious metal since times immemorial. This metal has retained its numero uno pisition as the "Metal of choice" over centuries. So what really makes this metal so desirable inspite of its very limited medicinal or industrial usage? Following are just the few of many reasons responsible for the same : 1. Its widespread use in Jewellery - It has always been used a metal of choice when it comes to Jewellery. In India, for instance, most of the gold demand is on account on Jewellery .This demand for gold jewellery has made India one of the leading countries as far as gold consumption is concerned. 2. It was used as Currency - Gold emerged as a major currency very early during human civilization where kings across continents used gold coins as currency in their respe...