Prajna Capital |
| Posted: 12 Jan 2015 04:09 AM PST
Checking a company credit history, financials, promoters background and liquidity can help you make the right choice. At present, investment experts are advising their clients to get locked into company deposits before an interest cut comes into effect. The Reserve Bank of India (RBI) is expected to slash interest rates, which will lead to a cut in bank deposit rates, which in turn will lower company deposit rates in the not too distant future. While the State Bank of India offers an interest of 8.75% on fixed deposits with 1-3 year maturity and financial institutions are paying up to 9.25%, manufacturing firms at 10.25-11% are paying considerably more. However, don't get swayed by interest rates alone. There are a host of factors that need to be considered before you invest in a company fixed deposit scheme. Credit rating Fixed deposit schemes are graded by credit rating agencies such as Crisil, India Ratings, Fitch, CARE and others. Checking the ratings is the first step towards selecting a com pany fixed deposit scheme. For instance, DHFL is rated AAA by CARE. This rating indicates the highest degree of safety vis-avis timely servicing of financial obligations, and hence it carries the lowest credit risk. Similarly, HDFC is rated MAAA by ICRA and FAAA by Crisil. Both these ratings indicate the highest credit quality and the lowest credit risk for the deposit scheme. Among the manufacturing firms, Gati is rated moderately safe (BBB+ by CARE), Godrej & Boyce is rated highly safe (FAA by Crisil), KCP is negative (FA by Crisil), indicating more risk, Prism Cement is rated adequately safe (IND tA by India Rating) and Ceat has a stable rating (IND tA+). If you want to invest in a company deposit as part of your retirement plan and you have 30 years to go, you can invest up to 30% of your deposit portfolio. If you are investing in company deposits with a horizon of three years, you can invest 50% of your overall deposit allocation. However, investments should only be made in well-rated deposits--AA and above. The New Companies Act 2013, which came into effect in April 2014, has made it mandatory for companies to get themselves rated in order to be eligible to raise money through fixed deposits. Company quality Always check the group background and the business you are investing in," . Check the promoters' history. Find out the company's repayment record, its financials--losses, debts etc. A company with a low credit rating is likely to offer higher rates to woo investors. KCP has a negative rating, but is offering rates that are higher by more than 100 basis points (bps) compared to SBI deposits.Rates of the HDFC deposit scheme or ICICI Home Finance scheme, that have better ratings, are just 25-50 bps higher than SBI. Liquidity The lock-in period of a company deposit determines how liquid the product is, that is, how easily you can get your money back. Most deposit schemes have an initial lock-in of three to six months. HDFC deposit scheme, for in stance, does not permit withdraw als for at least three months from the date of the deposit. In case of a withdrawal after three months but before six months, the depos it holder is paid a maximum inter est of 4% per annum. If one wants to withdraw after six months, but before the date of maturity, the interest payable will be 1% lower than the interest applicable for the period for which the deposit has been maintained. If no rate has been specified for that period, then the interest will be 2% lower than the minimum rate at which the public deposits are accepted by HDFC. Additionally, HDFC says that the commission to its agents is paid up front for the entire period of the deposit. In case of a premature withdrawal, the commission is payable for the period completed and excess commission paid will be recovered from the deposit amount. Interest payments Company fixed deposit schemes can pay interest monthly, quarterly, annually, half yearly and cumulatively. Those who need regular additional income--freelancers or retirees--can opt for periodic interest payments. However, benefits from fixed deposits with cumulative interest rates are considerably larger as the interest paid is ploughed back into the deposit account and the deposit holder benefits from compounding. 
Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015
1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund
You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds
Invest in Tax Saver Mutual Funds Online - 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 --------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs            | ||
| Bond Market helped NPS Higher Returns Posted: 12 Jan 2015 01:07 AM PST Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
Bond Market helped NPS Higher Returns
The NPS funds have given double-digit SIP returns since their launch. But this is more due to the rally in bonds than the bull run in equities. They came late but NPS investors have finally joined the party. Since the time the NPS was launched, SIP returns of the schemes for central and state government employees have generated better returns than the Provident Fund. The average NPS fund for Central government workers has given 10.35% returns, while the average state government scheme has delivered 10.84%. The calculation is based on SIP returns on monthly contributions. This should be music to the ears of the estimated 36 lakh government employees (14 lakh Central government and 22 lakh state government) who have nearly `53,500 crore invested in the NPS. But the higher returns have come with higher volatility. The NPS funds did very well in 2012-13, with Central government funds delivering 9.8% and state government funds giving 11.82%.This was followed by very poor returns in 2013-14. As bond yields shot up, NPS funds that had a large portion of their corpuses in government securities suffered. The SIP returns of the average Central government fund was 5.4% while the average state government fund grew only 4.9%. The 18% returns from equities that year didn't help much because these funds have only a small portion of their corpus in stocks. They are allowed to invest up to 15% in equities but no pension fund manager has allocated even 10% to stocks. As on 30 November 2013, the Central government scheme of SBI Pension Fund had only 7.15% of its corpus in stocks while the fund managed by UTI Retirement Solutions invested only 7.72% in equities. The trend of poor returns reversed in 2014-15, when bond yields receded.The 10-year benchmark bond yield has moved down from 9.1% in April 2014 to around 7.8% by the end of the year, pumping adrenaline into gilt schemes.The average SIP return of the gilt funds in 2014-15 is close to 22%, better than the 20% delivered by the equity funds. In the NPS segment for the private sector, the E class (equity) funds have done very well with average SIP returns of 14.6% since their launch in May 2009. But the cap of 50% on equity exposure means even the most aggressive investor (with the maximum 50% in stocks) has managed to earn only 12.5% returns. We have looked at the returns of four different types of investors in the past three financial years and since launch (see tables).  
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap Funds Invest Online
E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF     | ||
| Aegon Religare Life Insurance iReturn Plan Posted: 11 Jan 2015 11:54 PM PST Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
Aegon Religare Life Insurance iReturn Plan
Aegon Religare Life Insurance has launched its iReturn Plan, an online term plan that returns the entire premium on completion of the term.
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap Funds Invest Online
E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF      |
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