Money For Investment

If you are looking to save income tax arising out of long term capital gains on the sale of your house,art or property etc then you have an excellent option in NHAI bonds.National Highways Authority of India (NHAI) is currently offering non-convertible bonds with benefits under Section 54 EC of the Income Tax Act. These bonds offer returns of 6.25% pa payable annually. The minimum amount that one can invest is Rs 50000 while maximum amount in Rs 50 lakhs. The whole amount on maturity is taxable in the hands of the investor. these bonds are among the most efficient tax saving instrument for tax on long term capital gains. The other option offcourse is to invest this money agin in a new property or house to evade taxes . But , this will again mean that your money is locked for a longer period. These bonds have a maturity period of 3 years and are AAA rated by Crisil, Fitch and CARE indicating high credit quality of these bonds. One can hold these bonds both in physical as well as demat f...

Mutual funds are one of the most efficient and popular investment options for people looking to invest for wealth creation.There are thousands of funds to choose from, yet most investors really don’t need more than four or five funds. Sifting through all of the choices can be rather daunting. There are thousands of funds to choose from, yet most investors really don’t need more than four or five funds. Sifting through all of the choices can be rather daunting. HOW DOES A MUTUAL FUND WORKS A mutual fund is a fund where money is collected from all the investors investing in that fund, and is invested by a qualified fund manager on behalf of all the investors. The fund manager manages the investment and aims to beat the benchmark returns like BSE 100, Nifty 50 etc. Each of the funds will have a investment goal and strategy and the fund manager is required to invest according to that mandate. There are 3 kinds of mutual funds basically on the nature of its investments 1. Equity based mu...

The global financial meltdown has led to various governments across the globe into pumping billions of dollars into the economy to revive demand and growth in the economy. Increased money supply does help in pushing the demand for goods and services up thereby helping the economy grow . There are green shoots of recovery already in some parts of the world. India and China are already growing at a healthy rate. One of the bad effects of de-growth and recession is the menace of deflation. India is already in deflation officially. Deflation is potentially very dangerous to the economy and can lead to serious damages on the demand side in the economy.But we need not worry too much about it because of 2 reasons . First reason is that in India even though the WPI is in negative the CPI is still at 9% , which is very high. So technically the demand for essential items like food articles etc is still on the rise. The second reason is the deflation is expected to be a short lived phenomenon. Th...

While deciding on the home loan ,personal loan or car loan we are all very sensitive to the rate of interest being charged on the loan by the bank. This is because rate of interest directly impacts the repayment amount of the loan. A higher rate of interest obviously means more interest payout and hence is that much less desirable. This is perfect. But, what most of the loan seekers do not focus on is the tenure of the loan. Tenure of the loan , like rate of interest, impacts the repayment amount directly. Tenure is very important factor that one needs to check and negotiate on while taking a loan. Let us understand in greater detail how tenure of the loan impacts us. 1. Longer Tenure Increases the repayment amount on the loan - Let us consider an example. Assume Mr. X takes a personal loan of Rs 100000 at an interest of 10% annually for a period of 3 years. Consider the rate of interest as flat for sake of simplicity and ease of understanding. Now, for a tenure of 3 years the total a...

It is not entirely uncommon to see people making payments of their home loan,personal loan EMI, credit card,mobile bill payments etc in cash to the collection executive who comes to collect the same at their office or at home. While there is nothing wrong in doing so, one needs to be little more careful and do some mandatory checks before making payments. The reason for this is that there are lot of cases of fraud reported , where the collector collects the money from the customer but never deposits it in the bank. At times, collectors collect the money from 5-10 customers at a time and run away with the money , while there also have been cases where the collection executive after being dismissed or after having quit the organisation, continues to collect the money from his regular customers . Obviously , this money is never deposited by him in the customer's account. These are the malpractices which have crept into a system which is meant for the customer's benefit. As a prude...

Banks and NBFCs use the credit scores from rating agencies like CIBIL to evaluate the loan or credit card application from its customers. Based on the credit scores , the banks/NBFCs take their credit underwriting call. For good customers having higher CIBIL Scores, the loans generally gets approved while for people having lower scores, the loan is denied. But, the problem is that these scores are never shared with the customer. Unlike, in West, where every customer has access to his/her credit score, in India, this was not possible till now. But, now there is something to cheer. Now, as per the regulations, all banks and NBFCs are directed to provide the details of the CIBIL score to all such customers/applicants whose loan or credit application has been declined by the bank on the grounds of bad or substandard credit score. The customer can demand his/her credit score details from the bank. The customer,however, will have to pay Rs 50 towards this service. This is small step in the r...

The banking and finance sector is structured in such a way that most of the banks and other NBFCs depend a lot on the channel partners for sale of their products. The channel partners like DSA and DSTs, even though are a different entity separate from the bank/NBFCs, have become an integral part of their distribution network. Bulk of the sales of bank's products like salary account, current account, home loan, personal loan, car loan etc happens through these channel partners. As such, sometimes they become the face of the bank to a customer and can yield great deal of influence over them. Using this influence , the DSA /DST executives sometimes charge a commission from the customer promising them that they will somehow "arrange" the loan from the bank for them. Customers fall for these claims because of various reasons. Firstly because they see these agents as part of the bank/NBFC and as such assume that they might be able to influence the credit approval process in the...