Monday, October 31, 2011

Prajna Capital

Prajna Capital

What are the Cost involved in Mutual Funds?

Posted: 31 Oct 2011 06:01 AM PDT

The two main costs incurred are:

1) Expense Ratio: Annual expenses involved in running the mutual fund include administrative costs, management salary, overheads etc. Expense Ratio is the percentage of assets that go towards these expenses. Every time the fund manager churns his portfolio, he pays a brokerage fee, which is ultimately borne by investors in the form of an Expense Ratio. Therefore, higher churning not only leads to higher risk but also higher cost for the investor.

 

2) Exit Load: Due to SEBI's recent ban on entry loads, investors now have only exit loads to worry about. An exit load is charged to investors when they sell units of a mutual fund within a particular tenure; most funds charge if the units are sold before a year. As exit load is a fraction of the NAV, it eats into your investment.

 

Try investing in a fund with a low expense ratio and stay invested in them for longer duration.

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Also, know how to buy mutual funds online:

 

Invest in DSP BlackRock Mutual Funds Online

 

Invest in Reliance Mutual Funds Online

 

Invest in HDFC Mutual Funds Online

 

Invest in Sundaram Mutual Funds Online

 

Invest in Birla Sunlife Mutual Funds Online

 

Invest in IDFC Mutual Funds Online

 

Invest in UTI Mutual Funds Online

  

Invest in SBI Mutual Funds Online

 

Invest in L&T Mutual Funds Online

 

Invest in Edelweiss Mutual Funds Online

 

 

The real relation between Credit card and Credit score

Posted: 31 Oct 2011 05:14 AM PDT

Currently there is an increasing awareness about the importance of a credit score and the impact it has on any loan who wish to opt for in future! If you are one of those individuals who plan to take a home loan a few years down the line and do not have a credit score at all, then it is time to thought of  starting a credit score record, which will benefit you in the long run.

What does a score look like and what is a good score?

A credit score is generally a three digit number within the range of 300 and 900. Higher the score the better it is. This score will reflect information from several lenders and across various loans.

What information does a credit report contain?

Apart from containing all personal identification information the credit report records your repayment history if any in the case of a loan or a credit card.

Your credit card can be the single most important factor in improving and increasing your credit score. On the other hand it can also plummet your score to dark depths if you are not careful. Think smart and use your credit cards to your advantage. Here is some pointers on what to do and what not to do in order to achieve this reality.

No debts so far. Opting for a brand new credit card for the first time

This makes sense for your credit score. Making use of a credit card judiciously will help you improve your credit score. Just make sure you open your credit card with a respected and popular brand name.

Low credit limit

Keep a tab on the credit limit of your credit card. Open a credit card account with a company that will provide you with the highest credit limit possible. High credit limits, even if they are not used will add merit to your credit score and improve it.

Choosing the ideal credit card to close

The number of years you hold a credit card account has an impact on your credit scores. Hence, let your oldest credit card be, if you must close a card opt for the most recent cards and close them one at a time, maybe once a month over a period of time.

Bargain for a lower interest rate

If you have never defaulted on a payment for a few years, make use of your good repayment track record and speak to the bank officials for a better bargain. Request them to lower your interest rate citing the good track record you hold with them. Keep following up with your bank from time to time and you may just get your wish!

Request for an increase in credit limit

You may have purchased your most recent card because of the higher credit limit. If at a later date you wish to close some of your cards and you know it makes better sense to close the most recent card, you have a dilemma. The most recent card has the highest credit limit. The oldest card has the lowest credit limit. What do you do? In such instances, if you have a good repayment track record, approach the bank and negotiate for a higher credit limit especially since you have been their customer for quite a few years. Most banks will oblige and you can then proceed to close the most recent card if you absolutely must do so.

Keep a self imposed credit limit, which is much lower than the actual credit limit

Never exceeding 40% of your credit limit has a very beneficial effect on your credit score. This shows your credit limit is high but you have not burnt it up and have plenty in reserve. This logic helps you attain a much higher credit score. This is the same logic that suggests you should not close any credit card accounts, as they collectively will provide you a high credit limit, which is good for the score.

Paying off credit card dues quickly will dramatically improve your credit score

Try not to encourage too much credit card debt. Be wise and pay the dues quickly and keep rotating your cards. Paying off dues will cause a spike in your credit score, which is highly favourable.

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Also, know how to buy mutual funds online:

 

Invest in DSP BlackRock Mutual Funds Online

 

Invest in Reliance Mutual Funds Online

 

Invest in HDFC Mutual Funds Online

 

Invest in Sundaram Mutual Funds Online

 

Invest in Birla Sunlife Mutual Funds Online

 

Invest in IDFC Mutual Funds Online

 

Invest in UTI Mutual Funds Online

  

Invest in SBI Mutual Funds Online

 

Invest in L&T Mutual Funds Online

 

Invest in Edelweiss Mutual Funds Online

 

 

 

 

 

2 New FMPs from SBI Mutual Fund

Posted: 31 Oct 2011 04:46 AM PDT

SBI Mutual Fund has announced the launch of new fund offers (NFOs) of SBI Debt Fund Series 367 Days –9 & SBI Debt Fund Series 90 Days–51. Both the schemes will be open for subscription on November 1 and November 2 for series 9 and Series 51, respectively.

The minimum investment amount will be Rs. 5000 and in multiples of Rs. 10 for both the schemes. The schemes will have growth as well as dividend option.
They will be listed on Bombay Stock Exchange
 

How to Invest Online in Birla Sunlife Mutual Fund?

Posted: 30 Oct 2011 11:59 PM PDT

We are happy to introduce the online investment facility in Birla Sunlife Mutual Fund. This would help you to invest your funds through "Click of a Mouse". The Step by Step demo for investing online is available to guide you to invest Online. You can click the URL for viewing the following Demo.

Demo:

Step 1:

Online Account Access – Registration:

This demo helps you to Register for Online Access.

Click here to view the demo ….

Step 2:

Online Access – Demo:

This demo will help you to see the demo of "Online Access" and how to make online transactions using the Online Access.

Click here to view the demo ….

Step 3:

Invest Online:

You can start investing online by clicking the following link. Once you start investing online, it would save you a lot of time and would help you to simplify your tasks.

https://www.birlasunlife.com/Mutual_Fund/Mybsfs/Investor/Login.aspx

Refer below for more info…..

http://prajnacapital.blogspot.com/2011/06/buying-birla-sunlife-mutual-funds.html

You can contact me if you have any queries to invest online in Birla Sunlife Mutual Fund.

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SB account not simple anymore

Posted: 30 Oct 2011 08:57 PM PDT

Deregulation of savings account rate would result in new types of accounts with different features and varying interest rates 

   The talk of deregulation of interest rates on saving bank accounts is creating a buzz among bank customers. Obviously, since almost everyone has a savings bank account with a sizeable amount of money lying idle in it. Sure, the Reserve Bank of India's recent increase of rates on savings account to 4% from 3.5% is pumping up imagination of depositors who believe that they stand to gain the most when the banking regulator deregulates the savings account rate. However, according to banking officials, it need not be the case. True, most bankers don't think the time has not come to resort to deregulation of rates. However, even those who are ready to go along believe that it would lead to more product innovation in the industry.


   It is a significant move. Currently, the savings and current account rates are the only two deposit rates regulated by the banking regulator. Before the recent increase of saving account rates by RBI from 3.5% to 4% the rates had remained unchanged since March 2003. However, deregulation of rates won't necessarily lead to a significant increase in savings account rate immediately. What will happen is that the banks will start introducing different types to accounts to customers. Also, you can't rule out the fact that the rates can also go down when there is a decline in rates in the money market.
   
A significant move

According to investment experts, deregulation would be make huge change in the way people use their savings bank account. Currently, savings accounts for roughly 13% of Household Financial assets in India. However, in the past 10 years these deposits have yielded considerably lower rate of return than the prevailing inflation rate. This has resulted in erosion of value of the household wealth in these deposits. For example, take a look at the current scenario. With the inflation rate at 9.4%, the 'real' savings rate is negative 5.4% at the moment. And it means the worth of the money is getting eroded every year.


   Sure, it is not going to pinch every depositor so severely. For example, those who are using their savings banks accounts mainly to meet their monthly expenses and transactions wont feel much of a difference. This would applicable to a large number of account holders in large cities. However, those who keep large amount of money in savings bank and rural and semi-urban households which use their savings account to keep their entire savings, it certainly leads to an erosion of real worth over a period of time.
   
The likely scenario

If we were to go by what had unfolded in countries where the rates were deregulated, banks are likely to roll out a large variety of savings account with different parameters and interest rates. It has also been observed that the rates were generally higher than the prevailing rate. On their part, customers have started actively managing their savings and started moving their savings from their existing accounts to others offering higher rates of interest.


   Coming to our country, the banks are unlikely to raise rates across the board. They may continue the typical savings account the offer now, complete with unlimited number of withdrawals, free cheque book, branch, phone, and internet banking access and so on. However, these accounts are likely to offer lower rate of interest as banks have to recover the cost of offering all the free services.


   However, they would also offer savings account which may fetch higher interests. However, these accounts are likely to have many restrictions. For example, the bank can impose restrictions on withdrawals, either through number of transactions, access to branches or transaction amounts. The bank may also insist that one should keep a higher minimum balance in these accounts. However, all these restrictions would be rewarded by higher market-related interest rates.


   According to an expert, a typical example of such type of account is the 'online only' accounts currently offered in countries like the US, UK and Australia. These accounts generally have the highest interest rates. In fact, the rates are almost close to FDs. Also, they generally do not offer cheque books. There are also restricted access to branches and the number of free withdrawals the customer can make. It is expected that these accounts will compete with savings that are currently being parked in fixed deposits and short-term Liquid Funds.
   
Taking a final call

As you can see, deregulation –when it happens – would result in better rates and increasing number of complex products due to the likely product innovation in the banking industry. Customers should also be prepared to see the rates going down in future. "In a rising rate regime like the current one, a deregulated savings interest rate will provide customers the opportunity to earn a higher than they currently earn on their savings accounts.


However, it is also equally true that deregulation can also have the reverse effect. That is, when interest rates start going down, the savings account rates will also would start to move down much faster than when it were regulated.


   Against this backdrop, it is extremely important for customers to understand what deregulation means to them and what they may need to do to benefit from it. If you want to earn more, you should select the best account that would suit your needs. This is because after deregulation there would be typically two types of account: one that offers higher rates but with some restrictions and another with lower interest rate but with lot of free facilities. It is entirely up to the individual to figure out how to manage his liquid savings to maximise the returns. Choosing the wrong account can often result lower returns as the higher transaction costs can eat into the benefit of the higher rate.


   Ideally, a person should have two accounts. One to park his liquid savings and the other to carry out the transactions he may have to undertake every month. This would ensure that the liquid savings would earn more interest. If you think it is too much of headache, dont worry. Banks are likely to introduce products that would allow you to sweep your liquid cash so that you would earn more interest on it. It is almost similar to the sweeping facility already allowed by some banks. In short, deregulation of saving account rate would require you to keep a close watch on your transaction and saving pattern. That is, if you want to benefit from the deregulation of rates.

A NEW DEAL FOR SAVERS


Deregulation won't result in higher rates on savings account all the time
When the interest rate falls, you would earn less on your savings account, too.
Banks are likely to introduce different variety of accounts with different facilities and rates


Ideally, one should have two accounts. One for saving and another one for transactions


Watch your transactions and savings pattern before deciding on the type of accounts

How to Invest Online in Edelweiss Mutual Fund?

Posted: 30 Oct 2011 08:58 AM PDT

 

Benefits of Investing Online:

 

·                           You can purchase, redeem and order any transactions online.

·                           There is no need for you to contact the broker or any intermediate person for the transaction.

·                           You can view all the portfolio details of your folios online.

·                           You can generate Account Statements; view the past transactions and any other details.

·                           You can update your personal details online.

 

Transact Online:

http://www.edelweissmf.com/UI/Investor/Transaction/SchemeSelect.aspx?Agent=ARN-74461

 

 

Refer below for more Info……

http://prajnacapital.blogspot.com/2011/06/buying-edelweiss-mutual-funds-online.html

 

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Also, know how to buy mutual funds online:

 

Invest in DSP BlackRock Mutual Funds Online

 

Invest in Reliance Mutual Funds Online

 

Invest in HDFC Mutual Funds Online

 

Invest in Sundaram Mutual Funds Online

 

Invest in Birla Sunlife Mutual Funds Online

 

Invest in IDFC Mutual Funds Online

 

Invest in UTI Mutual Funds Online

  

Invest in SBI Mutual Funds Online

 

Invest in L&T Mutual Funds Online

 

Invest in Edelweiss Mutual Funds Online

 

 

 

 

Should you invest in tax-free infra bonds?

Posted: 30 Oct 2011 08:28 AM PDT

THOSE looking to save tax should take note of the latest buzz in the debt markets. Power Finance Corporation (PFC) and Housing Urban Development Corporation (Hudco) have launched bonds that will help you save more tax than your regular infrastructure bonds. Soon, IRFC and NHAI are likely to follow suit with similar bonds.

KP Jeewan, general manager, debt markets, Karvy Stock Broking, says: "The coupon in these bonds are completely tax-free and those in the highest tax bracket can expect an effective yield of 10.75 per cent, compared to the 9.5 per cent a 10-year public sector bond would offer." The PFC and Hudco offerings are of 10- and 15-year tenures, with coupon rates of 7.5 and 7.75 per cent, respectively. Unlike other regular tax-free infra bonds, the tax benefits in these bonds are not capped at `20,000.

Even besides these tax free bonds, those in the highest tax bracket have had plenty of opportunities to invest in tax saving infrastructure bonds under 80 CCF in the last two years. Industrial Finance Corporation of India (IFCI), Indian Development and Finance Corporation (IDFC), Rural Electrification Corporation (REC), L&T and India Infrastructure Finance Company Limited (IIFCL) have flooded this space.

Killol Pandya, head of fixed income, Daiwa Asset Management, says: "Investors comfortable with locking in their money for a long time, will find these bonds useful. But one should only park, funds that they will not need anytime soon." These bonds have tenures of 10 years or, at times, even 15 years, and offer rates accordingly. The interest payout is yearly, and the different bonds also offer a buyback option. One of the primary reasons investors would consider these bonds is the additional tax savings on the interest earnings of `20,000 over and above the `1lakh investible limit, which one would enjoy.

The 80CCF tax benefit is valid only for this year and should be utilised. Most of these bonds have a five-year buy back option with a 10-year tenure, so for a five-year investment horizon, this is a good option. If you are an investor who wishes to make the most of the tax break and have a lowrisk and -return investment that you can hang on to for a long tenure, this is an asset to consider. MahThe product has limited appeal and is suited for investors within the `3-5lakh tax bracket who can make the most of the `20,000 tax-free investment portion. Interest income over that is taxable.

These bonds are benchmarked to the ten-year government bonds, and, with the bonds gaining basis points, the debt market retail space may see more action.
 
 
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