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Everyone dreams of a comfortable retired life. However, fulfiling this dream is not that easy. Higher standards of living, loan repayments, responsibilities towards children (like education) and a host of other short-to medium-term obligations manage to distract one from saving for their retirement, critical for the much-wanted peaceful twilight years.

According to a recent survey by HSBC, (The future of retirement - Its time to prepare) approximately 58 per cent of the respondents in India were not sure of how their retirement income will look like. It was also observed that one of the reasons for the unpreparedness was the lack of understanding about long-term finances vis-a-vis the short-term. India is reported to have a higher savings ratio as compared to other countries. However, the survey revealed that the motive for saving is mostly for reasons other than retirement. Like saving for children's education, which incidently accounted for 35 per cent of the savings, when retirement accounted for only 12 per cent.

Individuals may not be able to change their saving tendencies and goals attached overnight. However, things could be changed by slightly tweaking the attitude towards tax-saving investments. Every year, tax payers invest in tax-saving instruments to reduce their taxable income. To make the best use of these instruments, these savings can be targeted towards one's retirement. For this, instead of choosing instruments with the least lock-in period, favour the higher-thelock-in-the-better-it-is strategy.

Equity Linked Savings Schemes - ELSS

For investors, with a higher risk appetite, ELSS is a great retirement tool. Although in terms of lock-in period, this instrument ranks low. However, it would give provide the investor with the much-needed inflationary hedge to his retirement savings. With high volatility observed in equity markets over the last couple of years, ELSS has lost favour with investors. However, long-term investors should continue to look at ELSS from a retirement perspective by holding the funds even beyond the stipulated three-year lock-in period. Good ELSS funds, as on date, are yielding close to 15 - 18 per cent returns over a 10-year period.

With monthly investments possible, this option can help build the retirement corpus over long-term. Moreover, investors should keep in mind that ELSS does not entail regular investment commitment. Unlike pension plans or insurance policies, which will require the premiums to be paid for a minimum of five years, ELSS contributions can be one-time, wherever required. Therefore, for people who have an element of uncertainty as regards their savings in future can keep this option open.

Investors can also look at pension plans offered by mutual funds, as they offer similar advantages. One differentiating factor is that the pension plans have a lock-in till 58 and thus holds good for people who are serious about not touching their retirement corpus in the intermediate time.

Public Provident Fund

PPF continues to be one of the best tax-saving tools that can double up as a great retirement tool. While it enjoys sovereign guarantee, the triple tax benefits it provides at the investment, earning and maturity stage adds another feather to its cap. Although the maximum amount that can be invested in PPF annually has been recently raised to ~1 lakh from the existing ~70,000, the minimum amount continues to be ~500 per annum.

A PPF account is a must-have in one's portfolio that can be easily carried on for a total period of 30 years (including the permissible extensions in blocks of five years after the initial 15-year period). A slow start to a PPF account by contributing ~10,000 annually and raising the contributions after every decade to ~50,000 and ~1 lakh each year can yield great results. Some projections show that the above strategy can help the individual accumulate close to ~28 lakh at the end of 25 years at a conservative rate of 7.5 per cent per annum. This amount, in addition, to the employee provident fund and gratuity amount received on retirement can be the perfect blend for the retirement corpus. Ideally, its the long lock-in and the tax benefits that make PPF the first choice for retirement savings.

National Savings Certificates

Yet another option from the small savings basket that fits well in this strategy are the NSCs. These are available for a five and ten-year maturity period. In its renewed form, this investment now offers 8.5 per cent returns for a five-year lock-in with the sovereign guarantee. Not very long ago, a very popular retirement strategy involved monthly investments and reinvestment in NSCs till around five years to retirement. This involved receiving the maturity amount every month during retirement, which would help the retiree with tension free cash flows to meet their standard of living. Of course, with higher income requirements now, this strategy may not fit well to the tee, however NSCs can still be looked at as an investment option by conservative investors.

Senior Citizen Savings Scheme

While the above options hold good for people planning for their retirement corpus, the SCSS is an option for the retired investor. Tax-benefit for investments in SCSS was introduced not very long back. Although the income earned from this scheme is taxable, the same carries sovereign guarantee and security.

Post retirement, investing for tax saving is really troublesome as the retiree would not want to part away with liquidity just to save tax. SCSS fills this gap by providing the right blend of regular returns and tax benefits on investments. In its renewed form, the SCSS has a tenure of five years and is now offering returns at 9 per cent, of definite value during the post retirement scenario.

The HSBC survey claims that only about 13 per cent of the country's workforce is covered under formal pension arrangements, leaving close to 284 million people without pension coverage. It is therefore imperative to be proactive about your retirement planning. And since tax-saving investments in India are often referred to as compulsory savings, use them for this goal. So, if you havent started yet, this tax saving season may be as good as any.

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

HDFC TaxSaver
ICICI Prudential Tax Plan
DSP BlackRock Tax Saver Fund
Birla Sun Life Tax Relief '96
Reliance Tax Saver (ELSS) Fund
IDFC Tax Advantage (ELSS) Fund
SBI Magnum Tax Gain Scheme 1993
Sundaram Tax Saver

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Application form for Tax Saving Infrastructure Bond and more information

Submit filled up application Collection canter near you

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

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Balanced Funds

Posted: 01 Mar 2012 03:24 AM PST

Balanced funds are equity-oriented funds whose average equity exposure over the last one year is greater than 60%. Such funds are of great value to investors looking at rebalancing their asset allocation because of their automatic rebalancing mandate. We recommend such funds to new investors for their less volatile returns and the automatic re-balancing feature.

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

HDFC TaxSaver
ICICI Prudential Tax Plan
DSP BlackRock Tax Saver Fund
Birla Sun Life Tax Relief '96
Reliance Tax Saver (ELSS) Fund
IDFC Tax Advantage (ELSS) Fund
SBI Magnum Tax Gain Scheme 1993
Sundaram Tax Saver

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Application form for Tax Saving Infrastructure Bond and more information

Submit filled up application Collection canter near you

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Commodities have to be part of your overall Portfolio

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Posted: 01 Mar 2012 02:19 AM PST

With India being predominantly an agriculture-oriented economy, the journey from commodities in physical trade to the futures market has been effortless. India has been able to absorb the concept of commodity futures trading with great ease and the future looks upbeat with rising demand for raw materials. Although the current global economic scenario may lead to slow growth in demand, the potential for consumption growth is surely positive in the long-run. This is because the emerging and developing economies are largely facing the need for increased demand for raw materials on account of development of infrastructure and also as rising wages lead to growth in consumer spending. The situation is different from the advanced economies where consumer spending is witnessing a slowdown due to the ongoing financial crisis. Even though the emerging and developing economies are not de-coupled with the global crisis, the major supportive factor for commodities demand from these countries is the fact that domestic consumption is rising and India is no exception.
With that, the last few years of growth in the commodities space has been phenomenal and one can say that the Indian commodities market has matured. This maturity can not only be seen in terms of volume growth in the business but also with the recognition of commodities as an asset class. Despite government reservations towards the commodities sector, growth in the commodities futures market has not been restricted and the turnover on the national level exchanges have grown at a blistering pace, from a daily average of around . 14,000 crore in 2006-07 to the present . 85,000 crore a day. Going forward, reforms in the sector will help to allow participation of financial institutions, banks and foreign entities and lead to greater participation and further growth in commodities.

Although the traditional Indian investor has always classified investments as equities or gold, the change has been finally seen in the last few years as the modern Indian investor is now more receptive to new investment ideas. Time and again, investors are always reminded to not put all eggs in one basket, meaning to diversify their investment portfolio in order to benefit from the differences in returns. Having gold in a portfolio not only offers protection but also increases the risk-adjusted return of the portfolio along with liquidity. In the wake of the current global financial crisis, gold has emerged as an important risk management tool for financial soundness.

Commodity futures returns vary with each stage of the business cycle and perform well in the early stages of a recession, a time when equity returns generally disappoint. During the early recessionary phase the returns on both equities and bonds are negative but the return on commodity futures during this phase is positive. In the later stages of recession, commodity returns decline, but this is generally a good time for equities. Hence, commodities perform best under expansionary phase. According to a CME study, diversifying a portfolio to commodity futures can increase overall returns by as much as 50% with comparable risk.

The safe haven attribute of precious metals help protect the portfolio from sudden unexpected (systemic) financial crisis that also include natural disasters, political tensions and disruptions, bankruptcy, debt default, currency depreciation, inflation etc. In such a scenario, while the traditional financial assets suffer a setback and see decline in value, prices of precious metals witness a significant rise. The inclusion of precious metals in one's portfolio is akin to seeking insurance for financial assets. If we consider the comparative returns of gold against equities in the international (2000-2011) and domestic markets (2004-2011), gains in domestic gold prices were more than that in the international markets due to the rupee depreciation. Had one invested in gold in 2008, then one's portfolio would be safe-guarded against financial uncertainties.

As commodity markets have matured, so have investor preferences. With time, we have been seeing a change in demand trends, leading to decline in share of jewellery in total gold demand. The commodity is seen more as a pure investment. Within gold investments in India, an investor now has various investment options available. One can be a physical trader or can have an ETF gold trading account. On the other hand, an investor can also venture into this investment category through E-series on the National Spot Exchange or trade commodity futures platform. In the ETF space, assets under management (AUM) have increased from around . 1,500 crore just a few years back to around . 8,000 crore now, making it evident that investor preference have changed over time and are moving from holding the physical asset to an investment asset.

With Asian economies growing at a phenomenal pace, demand for commodities is expected to rise in the future. And from a retail investor's perspective, the Indian commodities market offer smaller contracts, thus helping one venture into this market without huge positions. Ultimately, diversification is the key to investment management.

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

HDFC TaxSaver
ICICI Prudential Tax Plan
DSP BlackRock Tax Saver Fund
Birla Sun Life Tax Relief '96
Reliance Tax Saver (ELSS) Fund
IDFC Tax Advantage (ELSS) Fund
SBI Magnum Tax Gain Scheme 1993
Sundaram Tax Saver

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Application form for Tax Saving Infrastructure Bond and more information

Submit filled up application Collection canter near you

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Stock delisting – What should you do?

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Posted: 01 Mar 2012 01:40 AM PST

The stock market is witnessing a slew of delisting offers — Alfa Laval, Carol Info, Patni Computers, UTV Software — due to various reasons. For investors in these, it is often a tough call on whether or not they should go along. Sometimes, the price offered by the company is not lucrative enough to exit. However, if they do not exit, they run the risk of getting stuck with the stock if the company does not relist.

Delisting means permanent removal of stocks of a listed company from the stock exchange. This can be done by promoters increasing their stake in the company, or when the company is merged or acquired by another one and so on. The process can take six to eight months.

According to a recent report by ICICI Direct, there are many probables for delisting. These include Oracle Financial Services, Novartis, Honeywell Auto, Thomas Cook, Singer, Gillette, AstraZeneca Pharma, Blue Dart and 3M India. These companies have to take a call sooner or later on whether to reduce promoter holding or go for delisting.

In most cases, the company/ies share prices tend to go up as soon as the market smells astock delist. Rising prices lure investors, who rush to take advantage of short-term gains. Some that have delisted in the past three years include Bhuruka Gases, Aztecsoft and Binani Cement. The share prices of these companies had risen sharply after the announcement.

The stock of UTV Software Communications started rising in June, on speculation of delisting plans. By the time the plan was announced in late July, the share price had shot up 30 per cent since June. Many may have bought the stock from the time it started moving up, for short-term gains. But, experts advise against buying merely on delisting rumours. Pankaj Pandey of ICICI Direct suggests an alternative, "Choose fundamentally strong companies from the list of probable candidates and stay invested until they delist."

What & why?

Tender the shares only if you get a good premium at the time of delisting. You will have to see if there is enough left on the table for you as an investor. That is, if the delisting price will give you enough returns. Adding, that one should not look at the delisting price in isolation. "You should look at the quality of the shares. It could be a wise decision to tender shares if you are uncertain about the company's future. Holding on to stocks for more than a year means no capital gains tax.

If you do not tender your shares, you will continue to remain a shareholder and be eligible for benefits such as bonus, dividends and so on from the company. Since you are holding on to shares of an unlisted company now, you may find it difficult to sell these scrips. You will have limited options. If you want to unload shares after the delisting, you can do so by tendering these to promoters within off-market transactions. Off-market transactions are those which do not take place on the stock exchanges, and are conducted through negotiations between the buyer and the seller. In the rare event of these firms relisting, you may get to trade these in the secondary market.

Alternatively, you can take legal recourse like the shareholders of chocolate maker Cadbury India. In early 2003, Cadbury delisted, offering ~500 a share. The company managed to buy over 90 per cent of shares, the minimum required for delisting. It has been trying to buy out the remaining shareholders (2.4 per cent). However, the latter did not accept the price offered and have gone to court. The case is still going on.

In the case of an unsuccessful delisting, while investors can quote any price, it is up to the company to accept or reject it. For buying the statutory minimum 90 per cent, a company has to fix the price in such a manner that it is acceptable to investors. Failing which, the delisting will not happen and the stock price can crash. In this case, whether you should book losses and exit or not is a call to be taken on fundamentals and business prospects.

It is best to tender your shares in a delisting programme, he advises. Unless you are a big investor and have a substantial say in the company; then, you can hold on to your shares.

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

HDFC TaxSaver
ICICI Prudential Tax Plan
DSP BlackRock Tax Saver Fund
Birla Sun Life Tax Relief '96
Reliance Tax Saver (ELSS) Fund
IDFC Tax Advantage (ELSS) Fund
SBI Magnum Tax Gain Scheme 1993
Sundaram Tax Saver

---------------------------------------------

Application form for Tax Saving Infrastructure Bond and more information

Submit filled up application Collection canter near you

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Section 80D in Respect to Health Insurance Premiums

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Posted: 01 Mar 2012 12:39 AM PST

Investments made towards payment of health insurance premiums, qualify for a tax deduction under section 80D.

Available Deduction - For individuals less than 65 years of age, amount of health insurance premium paid or Rs. 15,000, whichever is lesser. For senior citizens above 65 years, amount of health insurance premium paid or Rs. 20,000, whichever is lesser.

A further deduction of Rs 15,000 could be claimed, for buying health insurance policy for your parents (Rs 20,000 if either of your parents is a senior citizen). This is irrespective of whether they're dependent on you or not. No deductions can be claimed for in-laws.

Scope of Deduction - Individual assesses can claim deduction for premiums paid towards health insurance of self, spouse, parents and children.

For HUF assesses, premium paid for insuring the health of any member of the HUF, can be used for deduction.

Key Factors to keep in mind

The premium may be paid by any mode of payment, other than cash.
The health insurance premium that you pay must be from the taxable income applicable for the year you claim. Premiums should not be from gifts received by you.
Part payment of premium is allowed. For example, suppose your parents contribute 50% of their health insurance premium and you pay the balance 50% of their premium. In such a case, you could avail the deduction for the amount contributed by you and your parents too could avail deduction for their contribution.

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

HDFC TaxSaver
ICICI Prudential Tax Plan
DSP BlackRock Tax Saver Fund
Birla Sun Life Tax Relief '96
Reliance Tax Saver (ELSS) Fund
IDFC Tax Advantage (ELSS) Fund
SBI Magnum Tax Gain Scheme 1993
Sundaram Tax Saver

---------------------------------------------

Application form for Tax Saving Infrastructure Bond and more information

Submit filled up application Collection canter near you

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Savings Account Portability

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Posted: 29 Feb 2012 11:02 PM PST

It is difficult for most of us to remember a bank savings account number. In light of this, it is surely worthwhile considering the viability and implementation of a system that would enable this most vital information to be portable.

After all, the number of our mobile telephone is portable. Indeed, if a user is unsatisfied with his service provider, he can simply switch the provider but still retain the number. Although in place only recently, the concept of portability of telephone numbers is very well understood. On the other hand, the process of changing the 10 digit number can be at best tedious, while informing acquaintances, friends and family of the change can be nothing less than a Herculean task. Nowadays, one's mobile number is tantamount to one's individual identity.

At first glance, it may be challenging for the man in the street to come to terms with the concept of a portable savings account number – after all, the level of confidentiality necessary to protect one's savings far exceeds that required for a telephone, which is, per se, designed to be shared.

A bank account, whether current, savings, term deposit, or no frills, represents a conduit between the customer and the bank and is governed by the Contract Act. Each bank has its own technology and CBS (Core Banking System) to assign an account number. Even though a savings account number is assigned in a serial order, in some cases, it carries extra meaning. Banks issue account numbers in 10, 12, 14 or 18 digit formats according to their individual internal technical requirements. It would be foolish to underestimate both the difficulty of synchronising numbers across the banking system and the enormity of the IT cost that would entail.

The RBI has issued general guidelines on KYC (Know Your Client) and AML (Anti Money Laundering), which require each bank to frame KYC/AML policy and procedures and record documentation requirements. At present, documentation requirements and the scope and scale of due diligence and risk categorisation varies markedly from bank to bank. But, of course, individual banks are responsible for performing due diligence on new accounts as well as for monitoring and reporting suspicious transactions. Notwithstanding the prospective establishment of a central registry for KYC documents, individual banks would remain the final arbiter of whether to open an account or not. The most straightforward route might be to link savings account numbers to the unique number issued by the Unique Identification Authority of India (UIDAI). Implementation could take place once account holders have been allocated a number by the UIDAI. However, the slow pace of the project to date is indicative of the complexity of consolidating information on this scale.

Savings account portability has farreaching implications for the banking system. Any meaningful change to the CBS system is likely to stretch resources, not only financial but also in terms of man power and technology. At the same time, the extent of the cost-benefit ratio is by no means certain. Indian banks have had limited success in penetrating remote areas, and large parts of the population continue to have scant access to basic banking facilities. Nonetheless, the RBI is seeking to stimulate the expansion of bank branch networks into remote areas by waiving licensing requirements. It is more prudent to use these scarce resources to expand basic banking facilities in remote areas.

In October last year, the Reserve Bank relaxed controls on interest rates on savings account deposits, which prompted some private sector lenders to increase rates to as much as 7%. On the face of it, encouraging investors to switch savings account with the same number portability and pursuing the most attractive interest rate offers little obvious benefit to the banking sector as a whole, especially when enhanced returns are already widely available via term deposits.

Clearly, the cost-benefit ratio and its implementation are not yet fully understood by the banks. So when it comes, the debate can be expected to be lively.

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

HDFC TaxSaver
ICICI Prudential Tax Plan
DSP BlackRock Tax Saver Fund
Birla Sun Life Tax Relief '96
Reliance Tax Saver (ELSS) Fund
IDFC Tax Advantage (ELSS) Fund
SBI Magnum Tax Gain Scheme 1993
Sundaram Tax Saver

---------------------------------------------

Application form for Tax Saving Infrastructure Bond and more information

Submit filled up application Collection canter near you

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Check Settlement Track Record of the Insurer before Buying Insurance

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Posted: 29 Feb 2012 09:28 PM PST

Buy insurance from companies with the best, or at least very high, claim settlement history

Most people ask about returns, guaranteed or otherwise, premiums, tax breaks (not necessarily in this order) before buying a life insurance cover. Since for many the main purpose of buying life insurance cover during the first three months of every year is an exercise in tax planning, it fits the bill in that context. Rarely do people actually bother to ask whether the insurance company can be trusted to honour a claim. Ironically, this is the most important aspect of an insurance product. In fact, that is the chief function of a life insurance policy – offering financial protection to the dependents of the policyholder on his or her death.

Understanding The Claim Track Record

To be fair, very few know the parameter to be used to ascertain the company's dependability when it comes to approving claims. And, it is very unlikely that your agent will volunteer to share this information, unless his company has an outstanding track record of settling claims. So, how do you get your hands around this key determinant? Well, for starters, you can refer to the Insurance Regulatory and Development Authority's (Irda) Annual Report for 2010-11, which was released recently and put up on its website. Every year, the report lists claim settlement, repudiation (rejection) and pending ratios for all life insurers.
While a thorough research would necessitate studying these ratios for a longer period, even a year's data is not bad to begin with. The data sheet may look complicated, but all you have to do is focus on the percentages mentioned in brackets for each company. For instance, LIC's claim settlement ratio is over 97%.

Claim settlement is an important criterion for all insurance covers, be it a term plan, traditional plan or Ulip, as insurance is the primary consideration. LIC's record can be said to be very good, especially since the public sector giant processed over 7 lakh claims during the year. Some private sector companies, in contrast, have a dismal ratio of merely around 50%, despite handling just a few hundred claims.

Prima facie, the simplest way to choose a policy seems to be to buy one from the company that has the best, or at least very high, claim settlement ratio. However, it may not be entirely correct to go blindly by this data point alone.
While the claims settlement track record would be an important factor when buying a life insurance policy, it would not be advisable to rely solely on this. Some of the new entrants in the insurance industry were initially prompt in settling the claims to establish a good record to capture business. But after having established themselves in the market, they have become worse than the established public sector company. For functioning effectively and surviving over a period of time despite heavy claims, a company must have a broad capital base with sound liquidity and reinsurance, he feels.

Else, a company which may otherwise have a good claims settlement ratio could turn bankrupt in the event of a natural disaster. In addition, you need to probe further to get information on the death claims handed out.

While computing the data on claims settled, pay-out of maturity proceeds is also treated as claim paid. In a way, this helps older companies to clock a better ratio as they are likely to see more maturities every year. Therefore, if you are buying a regular or online term policy, you should ask for claim information specific to these categories in order to get the correct picture.

Then, of course, there are other parameters that pertain to the policyholders themselves that are to be considered. For instance, comprehensiveness of the cover, its cost-effectiveness and, if it features an investment component, the returns track record too.

While buying a policy, try to keep it simple and cover all the possible event risks (such as critical illness) along with life cover. Keeping your life insurance separate from your investment plans is an important consideration. Term plans offer the simplest protection possible at the cheapest cost.

Now, it is quite possible that upon research, you find that the company with the best claim settlement history does not offer a product that suits your needs. Or, that the premiums charged simply do not fit into your budget. In this scenario, can an insurance seeker look for a company with a claim settlement ratio of say over 80%? Or should 90% be the minimum threshold level for the purpose? For any company older than three years, one should look for an acceptance ratio of a minimum 90%. This is extremely subjective and relative. A high claim settlement ratio is important, and the higher the better from the perspective of the insured as you are effectively buying insurance to protect your family. The key, then, may be to strike a balance and look for the best possible alternative.

This apart, there is a view that younger companies are entitled to some leeway as claims arising out of policies less than two-years old typically invite investigation and hence a high claim repudiation ratio is to be condoned, however, refutes this argument.

The law of insurance states that investigation is necessary only in respect of claims lodged within two years of having taken the policy. Unless the claim is absolutely fraudulent due to suppression of material facts, which is unlikely as a medical check-up is a must for taking life insurance, the claim would be payable.

There would be legitimate claims in circumstances like death due to road accident. However, the number of claims would be relatively lower for a new/ younger company, so it ought to have a better claim settlement ratio.

Factor In Claims Pending Ratio

In addition to the claim settlement and repudiation ratios, claim pending ratio is also to be taken into account. The figure is arrived at after deducting claims settled, written back as well as rejected from the total claims filed.
A pending ratio of over 5% demonstrates an inefficient claims management process. A company with a low repudiation but high pending ratio could be seen as postponing decisions on investigation related cases. One needs to study the Turn Around Time (TAT) on the pending data if the percentage seems high.

Also, the company's age could be more pertinent here than on the claim rejection front. Typically, a new company would have a higher claim pending ratio as almost all the policies would be new and would thus require investigation to prevent fraud.

In short, you would do well to adopt a holistic approach and examine all criteria before taking a final decision.

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

HDFC TaxSaver
ICICI Prudential Tax Plan
DSP BlackRock Tax Saver Fund
Birla Sun Life Tax Relief '96
Reliance Tax Saver (ELSS) Fund
IDFC Tax Advantage (ELSS) Fund
SBI Magnum Tax Gain Scheme 1993
Sundaram Tax Saver

---------------------------------------------

Application form for Tax Saving Infrastructure Bond and more information

Submit filled up application Collection canter near you

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Submit the filled up form to Collection canter near you

Loan on debt investment

Posted: 29 Feb 2012 08:26 PM PST

You can take a loan against stocks, mutual fund units, insurance policies and fixed deposits. Bankers say due to associated risks, the margin requirement increases when pledging equity and related investments. Banks sanction up to 50-60 per cent of the current market value of securities.

There are two reasons for which you can borrow against your investments:

i) to make up for lower income;

ii) To enhance your loan eligibility. This would also happen to those who pledge unit-linked insurance plans (Ulips). The insurance regulator is likely to disallow policyholders from pledging Ulips.

Debt instruments are safer options, due to their lesser volatility. Hence, these need lower margin. And, though these loans are treated as personal loans, the rate of interest charged is lower. Unfortunately, these documents need to be endorsed in the name of the bank, revoked when the loan is repaid.

Fixed deposits: This can only be done if you have a deposit with the lender. Banks offer a loan anywhere between 75 and 90 per cent of the deposit, varying with each bank and every customer. The loan is structured as an overdraft against your deposits. Many times, it can be taken from the very next day of making the deposit. There is no restriction on the end-use of funds.

The interest charged is 2-2.5 per cent over the fixed deposit rate. Interest will be charged on the amount drawn and not the limit set. Say, you have a deposit of ~1 lakh earning an interest of 10.5 per cent a year. At a 25 per cent margin, your overdraft limit is set at ~75,000. If you need ~30,000, you can withdraw it from the overdraft account at 1212.5 per cent (2-2.5 per cent over deposit rate). The interest will be charged on ~30,000 and not ~75,000.

Debt mutual funds: This is another liquid option preferred by banks. Income funds can be easily liquidated. However, the same cannot be said about fixed maturity plans (FMPs), as the money can be drawn only on a fixed date. So, income and ultra short-term funds will be preferred over FMPs.

Here, you can get up to 80-85 per cent of the investment amount as a loan, at an interest of 12-13 per cent. The dividends can continue to be paid to the holder of units even during the period of lien. However, no units can be redeemed before the loan is repaid.

Gold: A loan against gold is an easy source of raising cash, as most households have gold jewellery available. It is a secured loan, where your jewellery is the security, and that's why there are less documents needed, including no credit score. Non-banking finance companies like Muthoot Finance offer four schemes valuing gold at ~1,035 to 2,260 a gramme at a rate of 12-24 per cent annually. Banks also charge between 12 and 15 per cent every year.

Insurance policies: Not all policies are eligible for loan. You can avail loans on all traditional policies, except money-back plans, only if you have paid the premiums for at least three years. Hence, banks may not always prefer this, as it is less liquid. "You can get up to 85-90 per cent of the surrender value as a loan. The interest rates charged are similar to those for loans against deposits and mutual funds, currently over 12 per cent. Loans are not granted for less than six months," said a senior public sector banker.

Other investments: Long-term investment instruments such as NSC, Indira Vikas Patra, Kisan Vikas Patra can also be used to take a loan, of up to 85 per cent of the investment.

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

HDFC TaxSaver
ICICI Prudential Tax Plan
DSP BlackRock Tax Saver Fund
Birla Sun Life Tax Relief '96
Reliance Tax Saver (ELSS) Fund
IDFC Tax Advantage (ELSS) Fund
SBI Magnum Tax Gain Scheme 1993
Sundaram Tax Saver

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Application form for Tax Saving Infrastructure Bond and more information

Submit filled up application Collection canter near you

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

DSP BlackRock Mutual Fund renames DSP BlackRock Floating Rate Fund to DSP BlackRock Income Opportunities Fund

Submit the filled up form to Collection canter near you

Posted: 29 Feb 2012 07:03 PM PST

DSP BlackRock Mutual Fund has decided to rename DSP BlackRock Floating Rate Fund to DSP BlackRock Income Opportunities Fund. The changes will be effective from March 12.

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

HDFC TaxSaver
ICICI Prudential Tax Plan
DSP BlackRock Tax Saver Fund
Birla Sun Life Tax Relief '96
Reliance Tax Saver (ELSS) Fund
IDFC Tax Advantage (ELSS) Fund
SBI Magnum Tax Gain Scheme 1993
Sundaram Tax Saver

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Application form for Tax Saving Infrastructure Bond and more information

Submit filled up application Collection canter near you

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Income Tax Slab 2012 for Senior Citizen

Submit the filled up form to Collection canter near you

Posted: 29 Feb 2012 08:32 AM PST

Slab 1

Upto Rs 1.6 Lacs Tax Rate NIL for Men;

Upto Rs 1.9 Lacs Tax Rate NIL for Women;

Upto Rs 2.4 Lacs Tax Rate NIL for Senior Citizen;

Slab 2
Rs 1.6 Lacs to Rs 5 Lacs Tax Rate 10%

Slab 3
Rs 5 Lacs to Rs 8 Lacs Tax Rate 20%

Slab 4
Rs 8 Lacs onwards Tax Rate 30%

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

HDFC TaxSaver
ICICI Prudential Tax Plan
DSP BlackRock Tax Saver Fund
Birla Sun Life Tax Relief '96
Reliance Tax Saver (ELSS) Fund
IDFC Tax Advantage (ELSS) Fund
SBI Magnum Tax Gain Scheme 1993
Sundaram Tax Saver

---------------------------------------------

Application form for Tax Saving Infrastructure Bond and more information

Submit filled up application Collection canter near you

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

How to make money in volatile stock market ?

Submit the filled up form to Collection canter near you

Posted: 29 Feb 2012 07:31 AM PST

The stock markets have been volatile since the last few months mainly due to the uncertainty in the developed markets, especially in the Euro region and concern on domestic growth rate. The inflation rate remains high even after many rounds of monetary policy tightening by the Reserve Bank of India (RBI).

Investors have been left wondering what strategy to adopt and how to tackle the volatility. A volatile market provides good opportunities to create wealth. Let us look at how one should go about for this and what should be his or her strategy.

Don't panic

It is important not to value your investment on a daily basis or at a very short interval. The market prices of investments are bound to go up and down in the very short- term and in short-term too but patience is always rewarded in the medium- to long-term.

Be realistic, and exit

It is important to have realistic expectations while investing in equity-based instruments and book profits once the target is achieved. Investors expecting unrealistic returns often end up investing in high-risk instruments and loose their hard-earned money. Suppose you buy a stock for ~100 and have a target to earn 20 per cent in a year's time. However, if the stock moves up sharply on news or business performance in a shorter time span, don't wait for the year, you may exit and invest the same in a fixed income instrument or a bank fixed deposit.

Limit stocks

Investors should not have too many stocks and instruments in their investment portfolios. Having a limited number of instruments in the portfolio makes it easy to track the performances of the investments and have all relevant information about the investments you have made. Also, it is advisable to invest in defensive stocks such as pharma, fast moving consumer goods (FMCG), information technology and so on.

Asset allocation

It is always better to split the investments between debt and equity based on one's risk capacity.

By doing it that way when the market is down 20 per cent to 30 per cent you have money to buy and rebalance the portfolio instead of not having any money to buy since it is all locked up in equities. Debt while delivering lesser returns gives stability and a peace of mind. This makes investors less irrational whenever there is a crash in the equity market. Equity and debt are usually negatively correlated.

Use SIP

Investing in equities via Systematic Investment Plans (SIP) or Systematic Transfer Plans (STP) is a good strategy. By way of SIP, you invest a fixed amount which starts from ~500 on a periodic basis for a defined time period. If you have a lump-sum but wish to invest that every month systematically, you could opt for an STP where money is debited from a liquid fund in the same fund house and transferred to the equity fund as per the period specified by you. If you are in doubt whether you should enter the market now or not, opt for the SIP route of investment via mutual funds. Ideally SIPs should be subscribed for a longer investment period of say two years or greater than two years.

Tip for Nifty traders

An analysis of S & P CNX Nifty for the last one year from January 27, 2011 to January 25, 2012 has thrown up some interesting facts.

Taking the closing value of Nifty as on January 25, 2012 and the average value of Nifty for the last one year, it was found that the Nifty had closed 132 and 145 times above these two values out of the 249 trading days. This meant that in a bearish market too, the index had given positive returns on more than 50 per cent of the days.

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs