Posted: 30 Jul 2016 07:36 PM PDT

Mutual fund investors doing SIPs will have to use National Automated Clearing House (NACH), a new system of clearing, which has been implemented by National Payments Corporation of India (NPCI), instead of the erstwhile ECS (Electronic Clearing Service). All new mutual fund (MF) SIPs will have to be registered using NACH mandates only.

1. What is NACH OTM (one-time mandate) in mutual funds?

NACH is a one time registra tion process which allows an inves tor to register systematic investment plans (SIPs) in MFs. By registering this mandate, you authorise your bank to debit a certain amount to enable investments in a mutual fund scheme. This mandate can either be given for a fixed period (say one year or three years) or perpetual till you cancel it. Every folio needs a separate man date. If you have SIPs in different fund houses, you will have to fill in separate NACH forms.

2. How to register for NACH OTM?

Registration is just a one-time process per folio that you hold in a mutual fund scheme. Investors need to fill and submit the duly signed `OTM Form'. The signatures on the form should be as per your bank records because the form will be sent to your bank branch. Investors also need to attach a cancelled cheque which will help the fund house validate the bank account.

3. What details do I need to mention on the OTM form?

Besides mentioning regular and mandatory details like bank account number, bank name and branch, contact details, one must also mention the amount or daily limit that can be debited.

4. I have existing SIPs running in mutual funds. Do I need to do anything for that?

Your existing SIPs will continue to run till the time you have given an ECS mandate. Once the tenure or current ECS mandate ends, if you wish to renew the SIP, you will have to fill in a NACH form, for the same.

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Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds

Top 10 Tax Saver Mutual Funds to invest in India for 2016

Best 10 ELSS Mutual Funds in india for 2016

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. Franklin India TaxShield

4. ICICI Prudential Long Term Equity Fund

5. IDFC Tax Advantage (ELSS) Fund

6. Birla Sun Life Tax Relief 96

7. DSP BlackRock Tax Saver Fund

8. Reliance Tax Saver (ELSS) Fund

9. Religare Tax Plan

10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 Tax Saver Mutual Funds Online

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

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SBI Magnum Midcap Fund Online

Posted: 30 Jul 2016 11:31 AM PDT

Invest SBI Magnum Midcap Fund Online

The scheme aims to provide investors with opportunities for long term growth in capital along with the liquidity of an open-ended scheme by investing predominantly in a well-diversified basket of equity stocks of Midcap companies.

A climber in this space, this fund recorded a middling show until 2010 only to manage a steady improvement in its performance from 2011. From a one-star rating in 2011-12, the fund has climbed to four stars in 2015. The fund isn't defined as a small-cap fund by mandate and seeks to invest 65 to 90 per cent of its portfolio in stocks that figure between the 100th and 400th stock by market cap. The fund is quite true to label, with large-cap allocations rarely crossing the 10 per cent mark. The fund hunts for structural growth stocks, emerging companies in any sector which are growing faster than the peers and companies where there is a turnaround in business fundamentals. A growth-style fund, it also filters for capital-light business models, high scalability, strong management and history of consistent tax payouts. Stocks where promoter holdings are minuscule (at 10-15 per cent or less) are usually avoided.

The good show over three years, with the fund outpacing the category by 7 percentage points, has lifted long term returns as well. The ten-year returns of 15 per cent from this fund, don't build in a very good compensation for taking on the risks of mid- and small-cap stocks. But the returns are nevertheless ahead of the benchmark and the category.

Overall, it's a promising small/mid-cap fund. But monitor it for sustained good ratings.

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Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds
Top 10 Tax Saver Mutual Funds to invest in India for 2016
Best 10 ELSS Mutual Funds in india for 2016

1. BNP Paribas Long Term Equity Fund
2. Axis Tax Saver Fund
3. Franklin India TaxShield
4. ICICI Prudential Long Term Equity Fund
5. IDFC Tax Advantage (ELSS) Fund
6. Birla Sun Life Tax Relief 96
7. DSP BlackRock Tax Saver Fund
8. Reliance Tax Saver (ELSS) Fund
9. Religare Tax Plan
10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 Tax Saver Mutual Funds Online
Invest Online
Download Application Forms
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
---------------------------------------------
Leave your comment with mail ID and we will answer them
OR
You can write to us at
PrajnaCapital [at] Gmail [dot] Com
OR
Leave a missed Call on 94 8300 8300

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Know Your Loan

Posted: 30 Jul 2016 10:54 AM PDT

Apply for Any Loan Online

Cross-check the costs involved and interest rates of a loan, not just the speed of approval, before taking it

Are you looking to take a loan from a bank? With the use of technology and ability to access information such as your transactional data, income data and credit scores, existing as well as new customers are able to get faster approvals compared with 2-3 years ago. "For existing customers, we offer pre-approved loans through Net banking. By and large, the turnaround time for loans has been reduced by 50-60% thanks to the use of technology. Overall, we see a lot of enquiry generation through mobile and internet

Many banks even offer instant loans. But faster loans doesn't mean the risks and caveats that a borrower needs to be aware of, change. The basic rule remains the same: don't take a loan you can't service. So, before you are attracted by the speed of getting a loan rather than a real need for it, you need to understand the kind of loan that you are taking and the costs attached to it.

Mint Money looks at three major types of loans that many individuals take and the real cost of taking those loans.

Personal loans
Banks such as ICICI Bank Ltd, HDFC Bank Ltd, Axis Bank Ltd and Kotak Mahindra Bank Ltd, among others, offer 'instant' or pre-approved personal loans. If you are planning to take one of these loans, here are some things that you need to check. The time line to get a personal loan for existing and new customers has come down drastically. Though your bank may give quick approval, one should definitely shop around to get competitive interest rates.

Personal loans are easy to get, but expensive to repay. Since a personal loan is an unsecured loan, the interest rate on it is higher-ranging from 11.59% to 32% per annum, depending on your income, profile, the company you work for and residential status. You can get a maximum loan amount of R40 lakh, depending on your job profile. The tenure for these loans is generally 12-60 months. Besides the interest rate, you need to check the processing fee, prepayment charges and late payment charges on the loan. For instance, if you take a R5 lakh personal loan at 14% interest rate for 5 years, you will end up paying back the lender R6.98 lakh. Your monthly instalment will be R11,634. Usually, the processing fee is 0.25-3% of the loan amount, which the banks charge upfront.

So for the same loan amount, if the processing fee is 2%, you will pay R10,000 as processing fee. Some banks charge a flat fee. In case you want to foreclose your loan, the foreclosure charges can go up to 5% of the outstanding loan amount.

Auto loans
While you can get auto loans on floating as well as fixed rates, most banks offer a fixed rate loan for automobiles. Like personal loans, auto loans also come with costs such as prepayment, processing and foreclosure charges. If you are buying a new car, the interest rate is in the range of 9.65% to 14.50% per annum. However, for a used car the interest rate is higher: 10.90-20% per annum. The interest rate varies across banks. Say, you take an auto loan of R6 lakh and the interest rate is set at 13% for a 5-year period, your total outgo will be R8.19 lakh. The processing fee for auto loans is between 0.2% and 1% of the loan amount. In the same example, if the processing fee is set at 1%, your processing fee will be R6,000. Banks also charge a flat fee, depending on the loan amount. The tenure for these loans ranges from 1 to 5 years. But some banks may run promotional offers or schemes, and may offer loans of 7 years. The tenure also depends on the type of car you wish to purchase. If it is a premium car, the tenure may be restricted to 3 years.

Home loans
Banks have recently changed the way in which they calculate the interest rate and have moved to marginal cost of funds based lending rate (MCLR) from base rate. In case of MCLR-based loans, the rates may get reset every 6 or 12 months, depending on the reset clause at the bank. At present, the interest rate on floating home loans ranges from 9.35% to 14.50% per annum. Processing fee is usually 0.25-1% of the loan amount. This is generally non-refundable even if your loan application is rejected. Say, you take a home loan of R50 lakh at an interest rate of 10% for 20 years, you will end up paying R1.15 crore (principal plus interest). This amount, of course, precludes prepayment and change in interest rate. A 1% processing charge will mean you have to pay R50,000 more on this loan.

Along with the charges and interest rates, look at how smooth the process is going to be. Since a home loan is a longer-term loan, you don't want to get stuck with a bank that doesn't service you well. You could talk to people who have already taken a loan from the bank that you plan to approach.

What you need to do
Technology is helping banks evaluate customers. You as a customer should also make use of this technology. Even if your bank gives an instant loan, shop around for better rates. There are many online loan portals that give you details about the costs involved while taking a loan. You could cross-check the interest and charges on these websites. Avoid doing rough calculations; instead, use an online calculator or ask the bank for numbers to get the right picture.

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Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds