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10-Yr National Savings Certificate to yield 8.9% while Public Provident Fund will fetch 8.8%

The small saving schemes will fetch a higher return from the next fiscal after government announced adjustments in the rates in line with the higher market rates.

The schemes will fetch 0.2% to 0.5% higher rates, a finance ministry release said. A ten year National Savings Certificate, or NSC, will now yield 8.9% while the popular Public Provident Fund (PPF) will fetch 8.8%. The savings rate will remain unchanged at 4%.

The small savings schemes had been seeing net outflow in recent years as the rate was lot less than what was available on other instruments.

According to the budget estimates there is likely to be a net outflow of Rs 10,000 crore from small savings schemes in the current fiscal.

However, investors are still likely to head to banks as even after the revision bank fixed deposit rates are higher than what is available under small savings scheme.

HDFC Bank, for instance, offers 9% on a term deposit of one year one day to one year fifteen day. The revised rate on post office deposit of one year is 8.2%.

Perhaps for this reason the government has budgeted only a modest Rs 1,200 crore inflow in the next fiscal.

The funds raised by the schemes go to the centre and the states. In the event of a muted inflow, the borrowing burden shifts to market, as was the case last year, which puts pressure on interest rates.

The revision in rates is based on the recommendations of the Shyamala Gopinath Committee for Comprehensive Review of National Small Savings Fund.
The panel had advised the government to link interest rates on small savings to market rates.

It had asked the government to notify interest rates afresh at the beginning of every financial year based on the average yields on government securities of similar maturity with a positive rate spread of 25 basis points. Yield on the benchmark government year bond ranged from 7.8% to 8.97% in the calendar year 2011 leading to upward revision in the interest rates on savings deposits. This is first revision in interest rates after the NSSF was revamped in December in line with the panel's recommendations.

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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

Quantum Long Term Equity

Posted: 28 Mar 2012 04:46 AM PDT

The number of stocks is around 25 (1-year average) with each grabbing a substantial allocation; no long tail of insignificant allocations.

With a small corpus, it would not be surprising to see the fund manager dabble in smaller stocks, churn rapidly or take concentrated bets. Not so. Since launch, only 57 stocks have appeared in the fund's portfolio and just six have remained for five months or less.

The fund's strategy is value driven and process oriented. Kumar follows a bottom-up stock picking approach with an eye on the daily average trading volume of the stock. 'Popular' stocks are often given a miss.

The fund has a universe from which it makes its picks. Buy and sell limits are set for each of them. Only stocks that fall within the predetermined purchase price are picked up. Once a sell limit is reached, the team re-evaluates the target and if they do not find value in holding on at that price, they exit the stock. "Our buying and selling decisions are never based on the market. We sell only if the stock is overpriced, we have a better opportunity or there is a change in our view of management," says Kumar. "And if we see no opportunity, irrespective of where the market is believed to be headed, we hold cash. If the prices, of the stocks in our universe, are close to buy levels or approaching it, we reduce our cash exposure. If the market is on the rise or there is substantial choppiness, we sell and increase our cash level."

That's why the fund often has substantial cash allocations during market run ups. It would also explain why in 2008, the cash and debt exposure never exceeded 5 per cent. Still, it was amongst the least hit in its category that year - a clear indication of its conservative stock picking technique.

What you will find here is a value based, diversified, liquid portfolio. The fund's style will ensure periods of comparatively lower performance when speculative growth stocks are calling the shots. But in the three- and five-year periods (January 31, 2012), it is among the category's top performer.

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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

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How to make auto cover claim after an accident ?

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Posted: 28 Mar 2012 03:25 AM PDT

IN A road accident, loss can be human or financial. File an FIR with police, contact insurer as soon as possible

While nothing can be done to compensate human loss, financial losses can be curtailed. Financial loss due to an accident can be categorised into two forms. One, where two vehicles are involved, and other, where one vehicle and some pedestrian or immovable asset is involved.

Claims settlement in cases where two vehicles are involved is a bit trickier and involves litigation. Assuming a vehicle insured with insurer 'A' meets with an accident against another car insured by 'B', the car owner has the option of claiming damages either under his comprehensive policy with insurer A or insurer B (provided owner of another car insured with B is at fault on road and responsible for loss) under third-party property damages section.

Insurer A will settle claim and can take letter of subrogation from customer and sue insurer B to recover the claim. In this process, customers will be compelled to file FIR and there will be lot of litigation between insurers. Lot of court cases mean lot of legal fees and unproductive costs

To avoid such costs, insurers have signed up an agreement amongst themselves where each of the insurers will settle their respective damage claims and do not sue another insurer.

However, if the customer does not have comprehensive policy and has only third-party liability policy, he always has the option of claiming from insurer B.

Buying a third-party insurance cover is mandatory according to the prevailing laws. However, decision to a buy a comprehensive cover lies with the vehicle owner.

Right after accident, it is very important to share details like insurance company name, insurance policy number, vehicle registration number and driving license number. If possible, one should have a copy made of these documents.

If the damage to vehicle is too much, then police should be informed. A copy of report, panchnama or FIR should be obtained for further use, if the cases are to be taken to a court.

You should make sure that you do not enter into any agreement with your legal adviser over the insurance claim compensation.

One should not open any joint-account or sign any power of attorney in favour of the lawyer.

A second category of claim arises when a vehicle damages some immovable asset or some pedestrian is hit. In this case, the affected party approaches the police, and based on their report, insurance company pays out the compensation.

Claims are paid out of third-party liability portion of the vehicle insurance and depend on the age and earning capacity of the affected party. In case of property loss, different criteria are considered.

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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

HDFC Mutual Fund - HDFC Fixed STP and Flexi STP

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Posted: 28 Mar 2012 01:28 AM PDT

HDFC Mutual Fund has allowed the transfer under weekly interval frequency of HDFC Fixed STP & HDFC Flexi STP facilities on all business days of the week instead of existing frequency of every Friday as the day of transfer, with effect from March 1, 2012

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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

L&T Mutual Fund to buy Fidelity Mutual Fund India

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Posted: 28 Mar 2012 12:48 AM PDT

L&T Mutual Fund, the asset management arm of the L&T group, will buy Fidelity Mutual Fund in India for an undisclosed amount. For about two months now, US based Fidelity's management has been in talks with several bidders to sell its India fund management operation and L&T MF emerged as the winner although it was not the highest bidder, sources said. What tilted the deal in favour of L&T MF was its willingness to retain a large part of Fidelity MF's existing staff in India. This is L&T MF's second acquisition in the last two years, the first being the buyout of the mutual fund business of DBS Chola in January 2010.

Although the companies did not disclose the transaction value, sources said that the deal was valued at about Rs 550 crore, or about 6% of Fidelity's assets under management (AUM), which as of December 2011 was at about Rs 8,900 crore. Of the total AUM, about 70% is in equity assets while the balance is in debt.

The combined entity, with about Rs 13,000 crore in AUM, will be the 13th largest fund house in India and 10th in terms of equity assets.

As part of the deal, Fidelity's equity fund management team will work with L&T MF's team for a smooth transition, and move out to Fidelity's fold.

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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

Buy Mediclaim

Posted: 27 Mar 2012 11:32 PM PDT

It is advised to get insured early as with age, risks go up and hence, the premium Investors can claim tax rebate on investment up to Rs 30,000 towards health insurance Beginning April 1, you can claim deduction up to Rs 5,000 spent of health checkups under Section 80D Portability allows a policyholder to shift from one insurer to another along with accrued benefits It is not mandatory for a person to have a health insurance policy to claim Rs 5,000 deduction on health checkup

WITH the advent of new financial year, it's the time to relook at your investment goals and strategies. Adequate life and health insurance cover should be on the mind of all individuals, especially those, who have financial responsibilities.

Healthcare inflation has led to cost of medical treatment shooting through the roof.
Careful planning and investment in the right products can save you from any financial trouble in future.

While it is good if you are optimistic and believe that there's still a lot of time on hand to plan for future, but one should be practical.

Health insurance: Buy a standard health insurance plan or mediclaim policy, as it is more commonly known.

Choose adequate cover depending upon the present and future cost of medical treatment. Earlier you buy health insurance, lower will be the premium. With age, risks go up and, hence, the premium. To a 30-year-old male, most health insurance providers charge Rs 7,000-8,000 for health cover of Rs 5 lakh.

Critical illness insurance: Buy a standalone critical illness cover or rider from a life or general insurance company. Critical illness cover includes lump sum payment in case one is diagnosed with major ailments listed in the policy.

Most insurance companies cover serious ailments such as heart attack, cancer, stroke and renal failure in the critical illness cover.

Premium for such plan is low compared with standard health insurance plan. To a 30-year-old male, critical illness premium charged for Rs 5 lakh will be Rs 1,300-1,500.

Health insurance segment is growing at a very rapid pace, and critical illness is estimated to be growing at around 20-25 per cent. Although this growth has been there for quite sometime, we expect this trend to continue for next few years as well. Generally, there are two types of critical illness policies available in the market. One is the add-on policy, which is sold with the basic mediclaim, and other a standalone policy which is bought by the customer as per his needs.

Top-up cover: If you already have a health insurance cover and want to increase the sum assured, you can also top-up and buy extra cover. Get in touch with the insurance company to know if they provide a top-up insurance plan. Premium for a top-up cover is lower than buying a new standard health insurance policy.

Top-up health insurance suits those policyholders who are already covered under their employer's mediclaim policy or have their own health insurance with low sum assured.

Policyholders who have an existing policy and are renewing it year-after-year, might be enjoying a good no-claim bonus. For these people, a top-up cover helps in increasing the sum assured without paying a huge premium that they may have to otherwise fork out for a new health insurance plan. Corporate insurance policyholders are also inclined to buy top-up plans if they feel that their existing coverage might not be sufficient.

This concept works as a buffer, since it is only at times of severe illness that people need huge sum insured. In normal hospitalisation cases, plain vanilla health insurance plans are sufficient.

Portability: Beginning October 2011, the insurance regulator Irda (Insurance Regulatory and Development Authority) allowed portability of health insurance. In health insurance portability, on renewal, a policyholder can shift to another insurance company along with accrued benefits such as no claim bonus, waiting period for pre-existing disease.

All policyholders who want to shift to another insurer will have to inform his or her insurance company at least 45 days prior to renewal date. Portability is applicable to all individual health insurance policyholders issued by non-life insurance company.

Tax concessions: Apart from peace of mind, investment in health insurance will also entitle you to claim tax rebate under the Section 80D of the Income Tax Act.

Investors can claim tax rebate on investment up to Rs 30,000 towards health insurance. Under Section 80D, a person can claim deduction up to Rs 15,000 for a policy that covers him, his spouse and children. Deduction of up to Rs 15,000 is allowed on health cover for his parents. The deduction goes up by additional Rs 5,000 if parents are senior citizens.

Beginning April 1, you can claim deduction up to Rs 5,000 spent of health checkups under Section 80D. This deduction is allowed in the existing window for health insurance rebate. This is a new incentive offered by the finance minister in the Union budget.

The move to bring preventive health checkup under Section 80D is a very positive move. However, it is not mandatory for a person to have a health insurance policy to claim this deduction. We are working on figuring out ways of either incorporating this feature it in to health insurance product or to have special tie-up with hospitals and diagnostic centers to get more tests done at a reduced cost. If new products are created, then that needs to be approved by the regulator. If tie-ups are made with medical centers then the insurance company may ask them to provide special discounts on health checkups.

Preventive health checkup will help insurance company in better risk management as they will be already aware of the risk that they are taking by insuring the policyholder. Secondly, it will reduce the claims as well, since policyholders will be aware of their own medical condition.

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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

Muthoot Finance extended NCD issue to 09 April 2012

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Posted: 27 Mar 2012 09:10 PM PDT

Gold loan company Muthoot Finance has recently extended the closing date of its secured redeemable non-convertible debenture (NCD) issue from the earlier March 17 deadline to now April 09.

The issue offers 13%, 13.25%, and 13.43% rate of interest for tenures ranging from two-year to five-and-a-half year. However, this is neither tax-saving nor tax-free (wherein interest income is tax free) investment option. The issue opened on March 2.

The NCD issue on Tuesday just managed to garner Rs 250 crore, which is the core issue size, along with an oversubscription option of another Rs 250 crore. By extending the issue closing date, the company is hoping to mop up Rs 500 crore, according to banking sources.

"The issue was not getting enough response initially," one of the issue arrangers told Moneycontrol.com on condition of anonymity. "In February and March, some tax efficient infra bonds were getting attention from the people who had to invest to save their tax before the financial year ends. However, the bond issue has picked up of late. So far, it has collected around Rs 250 crore. The extension of closing date has worked. Before April 09, it should comfortably reach Rs 500 crore mark," the banker added.

An e-mail sent to George Muthoot Alexander, Managing Director of the company did not elicit any response till the time of writing this article. However, Moneycontrol.com managed to speak with Oommen K Mammen, the CFO of the company.

This is what he said:

"We are focusing on wide range of retail participation in the NCD issue. In the retail category some individuals have showed interest for investment. However, they don't have dematerialized accounts. Our appointed brokers are arranging it for them. It takes some time. Hence, we though of extending the issue closing in the new fiscal year. We are getting good subscription and the issue is going smoothly."

To promote the issue, the company has increased city locations from 100 (in the earlier issue) to 179. Muthoot has earmarked half of the total issue size for retail investors and the rest is for institutional investors, high net worth individuals and non-resident Indians. The face value of each NCD is Rs 1,000 and the minimum application is for five NCDs (Rs. 5,000).

Considering 13.43% coupon size for 5.5 years, the post tax return would be around 12.10% for an investor who comes under 10% tax bracket (annual income upto Rs 5 lakh in a year). Assuming that a bank fixed deposit scheme offers 9%, the same post tax return would around 8.10%.

In the last one year, shares of Muthoot Finance and Manappuram Finance , India's two major gold loan companies dropped nearly 7.50% and 22% respectively as against a fall of around 3% in the 30-share Sensex. The journey for gold loan companies has been fraught with regulatory concerns.

Last year, RBI had removed priority sector status from gold loan companies, which led a higher cost of borrowing for those companies.

Moreover, the Reserve Bank of India (RBI) is likely to step in and keep a check on gold loans disbursed by the banks, reports suggest. The regulator may be planning to regulate interest rates on gold loans, penalties and may impose higher margins on loan to value, which in turn, may hurt business prospects of gold loan companies.

"The company in consultation with the lead managers to the issue has decided to revise the issue closing date and extend the issue period upto April 09,2012. The NCD public issue committee of the company by their resolution dated March 16.2012 has given their approval to the extension of the issue closing date for the issue. The issue shall now close on April 09.20l2," Muthoot Finance had said in a release issued on March 16.

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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

Mutual Fund Systematic Investment Plan ( SIP ) is way to create wealth in long term

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Posted: 27 Mar 2012 07:58 PM PDT

Over the years, the Systematic Investment Plan (SIP) has emerged as a popular mechanism for investors in equity funds. This is not surprising, since a disciplined approach allows investors to limit their downside and reduce the variance on their returns. Also, by investing a fixed amount at a set interval, regardless of market conditions, investors can remove emotions from the decision-making process.

True, Indian investors have had mixed experiences with SIPs, especially in equity and equity-oriented funds. That many investors stop their SIPs every time the stock market spirals downwards is testimony to their indiscretion in following an approach that propagates disciplined investing.

Here are a few mistakes that investors make and a synopsis of how these can be avoided:

Investing aggressively through SIP: Many investors make the mistake of starting an SIP with an amount that they find tough to continue aftera while. So, start conservatively and gradually increase the amount to ensure continuity.

Investing for a year at a time: It is common to see investors committing to invest through SIPs only for a year or so. The rationale for this approach is to analyse the performance after a year and then take a long-term call. This is an illogical way of assessing the performance of an asset class like equity and the effectiveness of a powerful mechanism like SIP. The right way would be to invest for a minimum period of five to seven years. The longer one follows this process, the more one benefits from 'averaging' and the 'power of compounding'.

Thinking I cant lose money if I invest through SIP: 'Rupee Cost Averaging' doesn't mean one can't lose money. While SIPs help get the benefits of 'averaging', risks associated with the asset class still remain. However, the impact gets minimised significantly if one continues the process for longer.

Stopping SIP in a falling market: The objective of investing through SIPs is to turn market volatility to ones advantages. But many investors stop it when markets fall. The key is to continue the process for a committed period of time, irrespective of the market mood.

Opting for dividend option while investing through SIP: The power of compounding works best when one invests for the long-term and allow the gains to remain invested. Taking out money at regular intervals, would defeat the purpose. So, go for the "growth" option.

Investing in aggressive funds at the start: Many investors make the mistake of investing heavily in aggressive funds, such as sector, thematic and mid- or small-cap funds in the beginning, thinking since these funds are more volatile than diversified funds, they will benefit more from 'averaging'. Investors should remember that to achieve long-term goals, one needs to invest in funds that are diversified and have the potential to perform consistently.

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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

Asset Allocation Funds

Posted: 27 Mar 2012 11:34 AM PDT

Investment experts ask investors to always stick to their asset allocation plan and rebalance it at regular intervals to create wealth in the long term. However, most investors find it difficult to do the allocation as well as rebalancing on their own. They also find it difficult to hire a professional for the job for a variety of reasons: stiff fees, lack of access and the small size of the portfolio and so on. These make many look at asset allocation fund of funds. Multi manager asset allocation fund helps investors to invest in the best of the mutual fund schemes investing in various assets as per a pre-determined asset allocation. It also helps to track, continue with good investments and weed out underperformers. Though an asset allocation fund cannot replace the financial planning exercise completely, it still deserves a closer look.

WHAT are Asset Allocation Funds?

For the beginners, asset alloction funds are fund of funds schemes that offer to invest in other equity and debt mutual fund schemes based on a certain mix of equity and fixed income. An aggressive asset allocation fund invests in a combination of equity and fixed income; say 70% in equity and the rest in fixed income, through MF schemes; whereas a cautious asset allocation fund ensures that all the money is invested in fixed income schemes investing in low-risk instruments. Asset allocation funds are of two types — single manager and multi manager. A single manager asset allocation fund invests in MF scheme managed by one manager — read schemes floated by the same mutual fund house, whereas a multi manager asset allocation fund invests in mutual funds schemes across fund houses. Keep aside the given benefit, investing as per asset allocation, there is more on offer.

BENEFITS

A multi manager asset allocation fund makes more sense for the first-time investor, as s/he may not be conversant with the functioning of each product in the mutual fund space and further may not have adequate information to choose the best funds. And that is not the only reason. Multi manager funds allow the fund manager to invest money in the best of the class mutual fund schemes to offer optimum risk-adjusted returns for naive investors which may not be the case with a single manager fund where the fund manager may not have much options. But if you are comfortable with the investment philosophy of a particular fund house, you can also look at single manager asset allocation fund floated by that fund house.

Asset allocation funds also offer the much-needed asset rebalancing. Asset rebalancing helps investors to move money from risky assets to non-risky assets or the other way round at regular intervals\. If you are a long term investor and do not have time, resources or knowledge to efficiently track your investments, you run the risk of remaining invested in a dud investment.

A professional fund manager while rebalancing ensures your money remains optimally employed. There is one more benefit investors have to keep in mind. The shelter of one fund saves the investors from heavy taxation. If you try to actively rebalance or continuously keep weeding underperformers to invest in scheme better positioned to deliver, you may end up paying short term capital gains. This is especially true in case of savvy investors actively tracking their investments. Instead, remain invested in a good multi-manager fund for long-term and enjoy lower taxation.

Though you have to pay for this job, there are some areas where you may see lower expenses too. Asset allocation schemes can invest in 'institutional plans' of other schemes that come with lower expense ratio. Small investors have to invest in retail plans with comparatively higher expenses. Though there are benefits of investing in an asset allocation funds, one cannot ignore the downside too.

The fund manager must stick to the mandate given to him. Too much portfolio churn and stepping out of mandate for maximisation of returns can increase risks. You have to keep in mind that these products are generic in nature. There is a limit to customisation when you opt for an asset allocation fund.

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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

What is Dividend Yield ?

Posted: 27 Mar 2012 11:11 AM PDT

For the uninitiated, dividend yield can be calculated by dividing the dividend per share by the prevailing price of the stock. In a bad market, dividend yield goes up as the stock prices fall, making such an attractive bet. The fund manager tries to cash in on the opportunity to buy under-priced stocks. Fund managers can buy a stock when it is cheap on the dividend yield basis and can sell it as it turns dear if dividend yield falls with rising prices, thus capturing profits for investors. Such a fund will have companies with sound financials and consistent dividend paying record. That means, apart of the regular dividends, you can also be reasonably sure of the capital appreciation over the long-run. Sure, if you have the stock picking skills, you can replicate the same strategy to build your own portfolio. Otherwise, stick to a good mutual fund scheme.

A word caution for those who are going to do it on their own. Don't just pick up any stock that has recently declared dividend and has attractive dividend yield. This is because some companies may announce special dividend to distribute a one-time gain to investors or for achieving a milestone like golden jubilee year or sales of $1 billion. For example, Gujarat Gas recently declared a special dividend of . 12, and Bosch paid a special dividend of . 85 in June 2011. So when you are calculating dividend yield, don't forget to exclude such special dividends. One can choose to invest in stocks quoting at or above, say, an absolute number of 3% or use a relative yardstick such as dividend yield of the Sensex. Also, look into the business growth of the company. Remember, you are buying stocks to create wealth and not just to earn regular income in the form of dividend year after year.

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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

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How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

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Kotak Surakshit Jeevan

Posted: 27 Mar 2012 10:14 AM PDT

Current open Infra Bond Application form

Surakshit Jeevan is a protection sum savings plan from Kotak Life Insurance with an enhanced protection benefit. With this feature, in the event of the death of the policyholder after five years of the policy term, the nominee will be entitled to receive double the amount of sum assured. However, if the policyholder passes away during the first five years of the policy, the nominee will be entitled to receive only the basic sum assured along with vested bonuses.

Apart from the double death benefit, the scheme also offers other incentives. These include simple reversionary bonus — payable every year as a percentage of the sum assured, interim bonus — payable in case of a death claim during the course of the year and terminal bonus — payable on maturity or earlier death subject to completion of 10 policy years. These bonuses, however, are not guaranteed and their payments are subject to the company's discretion.

Investors opting to buy this policy get the advantage of a double death cover, but the premium charged for such a benefit is relatively higher especially if one considers the premiums charged by a pure term plan.

Thus, if one were to opt for the Kotak Term Plan instead, for a policy term of 25 years and sum assured equivalent to double the death cover as provided for by Surakshit Jeevan, the premiums payable shall be much lower.

While investors here can argue that the premium paid under a term plan is an expense that will eventually be lost if the policyholder were to survive until the end of the policy term, the point worth consideration is that the low cost of these products cannot be ignored if ensuring adequate cover to life is the key concern for the policyholder.

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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

Investment Plan

Posted: 27 Mar 2012 09:44 AM PDT

People generally use such big events as an excuse to delay their decisions or hold back their investments. We always try to look at the reason closely and communicate to them that unless it is a negative news on the personal front such as illness or job loss or pay cuts, they shouldn't change their plans. We strongly discourage people from making such decisions based on market conditions. For example, there are regular arguments like the market is so high or gold prices have soared. Or some would say that let the RBI policy or the Budget be over. We try to convince them that these are not genuine reasons for them to stop or postpone their investments.

More than investments, people tend to postpone or advance their big-ticket purchases before an event like Budget. Somehow, there is a notion that Budget normally drives prices high. When it comes to investments, often these big events are almost inconsequential in the long term. Unless there is a really big event that alters the entire landscape of investment space, investors shouldn't bother about them. That is an advice you would hear from all advisors.

But how does it differentiate between these events? Or how does one know which one is a genuine issue or not. There is no standard advice on such issues and it is always based on the merit of the case. He says he has noticed that these big events or excuses fall under four categories: market related, government or regulatory driven, personal issues or career related. For example, when someone comes up with an argument that he wants to wait till December to see how foreign investors are going to invest before he puts money in the market. When someone points to higher gold prices as an excuse to avoid starting an SIP in gold. These are instances where you are trying to time the market, and it is a big NO," he says. The only occasion when he relents is when someone is expecting bad news on either the personal or the career front. "When someone is going though major illness in the family or somebody is expecting a pay cut or job loss, I always examine the issue more sympathetically. These are instances where one can consider delaying or holding back investments.

The big event has to be something like a landmark judgment or a policy decision. Or it also could be an unbelievably good deal, he says. "For example, there was this offer of allowing 50% depreciation in the value of car during 2008. That is a huge trigger for purchases. But such events are very few. As for budget and policy review by the central bank, he believes that mostly they won't alter your long-term plans. People who are waiting for policy announcements in the Budget tend to forget that most of these things are already factored in the price of stocks. So when the actual announcement comes, there may be only a small reaction to that. Sure, there are totally unexpected announcements that will move the market, but it is not wise to wait for them to make investments.

So, the next time you feel like waiting for a big event to pass before starting a SIP or renewing one, remind yourself that it is thinly-veiled effort to time the market. Also, remind yourself that it is almost impossible to time the market in the long term.

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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

Why Have a Financial Plan ?

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

Posted: 27 Mar 2012 08:59 AM PDT

Needless to say, the question was met with derisive smiles. Listen, I have everything stored here – my income, expenses, everything. Some others scoffed at the idea – A budget for an individual? It must be something the new breed of financial advisors must have invented to con people like us. We next posed the question to some financial advisors: Are people conscious about the need for drawing up a budget for themselves? How many of them don't fumble when it comes to answering your queries when you are drawing up a budget for them. For the uninitiated, most financial advisors draw a budget for their clients to assess the financial position of them. In fact, it is the first step towards drawing up a financial plan for their clients. I have noticed that youngsters tend to take things easy when it comes to budgeting. However, those who are near their retirement or retired, take this exercise very seriously. He also clarifies that probably his clientele may not give the correct picture as they have already taken the conscious decision to have a financial plan. One can't generalise. It is true that the budget remains in the head for most people, but with some assistance most of them can provide all the necessary information that will help us draw up a budget.

Advisors are financial planners like them ask their clients for details of their income, expenses, financial commitments, assets, liabilities and so on as the first step towards drawing up a financial plan for the clients. We have to draw up a budget because we want to know the financial position of the person. More importantly, we want a clear idea about their surpluses which will determine their financial plan. Simply put, if you don't have any surplus, you can't possibly plan for the future goals. So the financial planner will turn his gaze on your expenses and liabilities to see whether you can trim them. It is always about focusing on the important goals and sacrificing some of the not-so-important ones. So we make the client understand that they have to take certain steps to rein in their expenses to make provisions for investments.

Don't worry. It is not that once you have budgeted a certain amount for expenses for every month, you have to stick to it at all cost. We always give them a small margin so that they can take care of any unforeseen expense without much difficulty. "Even otherwise, we earmark a certain portion of their investment in some liquid investments, like liquid funds or short term fixed deposit, to make sure they can take the money out on short notice. The whole idea behind the exercise is to drive home the point that one should be aware about his/her income and expenditure. This will give a rough idea about your savings, investments and so on. However, the trouble is that even the educated will only have a rough idea how much they will have towards the end in the savings bank account, and that is strictly not enough.

Another crucial point about budgeting. The exercise just doesn't stop after finding out the income and expenses and other financial commitments. The next equally important step is to find out the future goals and make provisions for investments to ensure the goals are reached at specific times.

You can't plan a holiday by just going to the railways station or airport and deciding on the spot where to go. It is the same with financial plan. You should have a clear idea about your income, expenses, assets, liabilities and goals if you want to succeed.

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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

Income fund - The risks

Posted: 27 Mar 2012 08:00 AM PDT

Interest rate risk

When interest rates rise, bond prices fall. So if the fund manager has his portfolio stacked with lower interest rate paper, the prices of his holdings will fall resulting in a lower net asset value (NAV). On the other hand, if interest rates fall, the prices of his holdings rise and so does his NAV.
The longer a bond's maturity, the greater the interest rate risk. A bond fund with a longer average maturity will see its NAV react more dramatically to changes in interest rates as the prices of the underlying bonds in the portfolio increase or decline.

Credit risk

Bonds carry the risk of default, meaning that the issuer is unable to make further interest or principal payments. They are rated by individual credit rating agencies to help describe the credit worthiness of the issuer. Higher the credit rating, lower the risk and lower the returns. Lower the credit rating, higher the risk and higher the return.

Liquidity risk

If the credit rating gets downgraded or the current interest rates are much higher than the coupon rate, then the bond would face liquidity issues because finding a buyer would no longer be easy. Liquidity risk describes the danger when one has to sell a bond in the secondary market but is unable to find a buyer.

While at any given point, all these risks exist, there are different phases in the interest rate cycle and in the history of the debt market where one particular type of risk has taken center stage. During the period from 1997 right through 2003, huge money was made on interest rates because during this period rates came down from 14 per cent to 5 per cent (10-year yields). From then on till 2008, money was made by taking credit risks when BBB rated companies were borrowing at 14-15 per cent. In 2008, it was liquidity risk that gained prominence though credit risk too had its place.

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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

JP Morgan Mutual Fund – JP Morgan India FMP Series

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

Posted: 27 Mar 2012 07:20 AM PDT

JP Morgan Mutual Fund has announced dividend under the dividend option of JP Morgan India FMP Series 7. The quantum of dividend will be the entire distributable surplus

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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