The most well-meaning New Year resolutions!
ARADHANA V BHATNAGAR31 December 2009, 12:00am IST
Are resolutions made each year only to be broken even before one can say Jack Robinson? Even though the spirit is willing, daily pressures and
circumstances make it difficult for people to adhere to them. We take a look at the ones that are loaded with good intentions...
The last two days of the year are always a little heavy for me. Looking back, I can’t help but feel ‘this will never come back again in my life’. Now whether ‘this’ was a good one or not-so-good is another story, but yes I do feel, like many countless others, that this year I will endeavour to be a better person – change that one irritating trait of mine or take on a brand new ‘good habit’.
The Oxford dictionary defines the word ‘resolution’ as a firm determination to carry out a thought. It is a commitment that an individual makes to a project or the reforming of a habit, often a lifestyle change that is generally interpreted as advantageous.
In the New Year everyone comes up with one resolution which they hope to carry forward. They somehow go through a month, but come March, it’s all forgotten and the bad habits are back to being a topic of dinner conversation.
Let 2010 be different! Set a precedent and ensure you and your children, if any, make a resolution and stick by it.
Here are some resolutions which are the most well-meaning:
- Self related: To be more forgiving; organised; helpful; less temperamental; patient.
- Health related: To stop drinking and smoking; lose weight; give up junk food and colas.
- Finance related: To save money, not buy on impulse.
- Career related: To not job hop frequently, be more diligent, accommodating.
- Family related: To visit parents, aunts often, express love.
- Home related: To spring clean regularly, not hoard.
- Environment related: To save water, power and plant trees.
SOURCE: TIMES OF INDIA
Thursday 31 December 2009
Wednesday 30 December 2009
New Year's prayer and meditation for peace
"Many of the great religions of the world believe that when groups of people come together to pray and meditate it has a powerful, positive and cohesive affect on the environment.
All of us are too aware that we live in troubled times - from crime in our neighborhoods to the breakup of many families to tension in the family of Nations. Too often we feel helpless - that we do not possess the tools or the talents to solve these problems.
Here is a wonderful opportunity for us all to come together for the greater good for ourselves, our families, our nation, and for all life on this planet."
The following is a sample prayer but please feel free to create your own prayer as an individual or as a family or pick a prayer that you find personally meaningful.
How to Create a Prayer:
A prayer starts with Praise toward the Creator of the Universe.
Now is the time to ask the Creator of the Universe for what is important to you, your family, your nation and the world.
Next, it is good to give thanks to the Creator of the Universe.
Finally, give Praise to the Creator of the Universe.
Sample Prayer:
Dear God-
Praised are You who created the universe.
Thank You for giving me and my family life. Thank You Dear God for creating such glorious beauty in this world and thank You for giving me the ability to appreciate Your creation.
Please Dear God, I humbly ask You to shine Your love on me, my family and all people and may Your love bring perfect holiness, perfect health and peace, peace in my heart and soul, peace in my family, peace in my nation, and peace in the entire world.
Please Dear God, help me to know my highest purpose and to realize total success. Please grant me wisdom in order to best serve You here on earth.
Please Dear God, forgive me for my shortcomings in the past and help me to walk in Your ways from this day forward.
Thank You God for hearing my prayer and for giving me and all life, holiness, perfect health, peace, wisdom, success, and forgiveness.
Praise You Dear God who loves His creation and brings peace, love and holiness to all life.
May peace prevail on Earth.
Amen.
All of us are too aware that we live in troubled times - from crime in our neighborhoods to the breakup of many families to tension in the family of Nations. Too often we feel helpless - that we do not possess the tools or the talents to solve these problems.
Here is a wonderful opportunity for us all to come together for the greater good for ourselves, our families, our nation, and for all life on this planet."
The following is a sample prayer but please feel free to create your own prayer as an individual or as a family or pick a prayer that you find personally meaningful.
How to Create a Prayer:
A prayer starts with Praise toward the Creator of the Universe.
Now is the time to ask the Creator of the Universe for what is important to you, your family, your nation and the world.
Next, it is good to give thanks to the Creator of the Universe.
Finally, give Praise to the Creator of the Universe.
Sample Prayer:
Dear God-
Praised are You who created the universe.
Thank You for giving me and my family life. Thank You Dear God for creating such glorious beauty in this world and thank You for giving me the ability to appreciate Your creation.
Please Dear God, I humbly ask You to shine Your love on me, my family and all people and may Your love bring perfect holiness, perfect health and peace, peace in my heart and soul, peace in my family, peace in my nation, and peace in the entire world.
Please Dear God, help me to know my highest purpose and to realize total success. Please grant me wisdom in order to best serve You here on earth.
Please Dear God, forgive me for my shortcomings in the past and help me to walk in Your ways from this day forward.
Thank You God for hearing my prayer and for giving me and all life, holiness, perfect health, peace, wisdom, success, and forgiveness.
Praise You Dear God who loves His creation and brings peace, love and holiness to all life.
May peace prevail on Earth.
Amen.
Tuesday 29 December 2009
30 mins of daily workout for a healthier 2010
Just add 30 minutes of physical activity to your daily regime and ensure a healthier 2010, according to an expert.
Peter Brubaker, professor of health and exercise science at Wake Forest University, said that regular daily exercise is the most important step towards a healthier lifestyle.
“People don’t realize you can get tremendous benefit from regular physical activity even if you never lose a pound,” he said.
Increased physical activity could ensure a reduced risk for heart disease, stroke, diabetes, colorectal cancer, breast cancer, bone and joint conditions, and sleep apnea.
Brubaker has put forth several tips for how to increase daily physical activity, which are as follows:
Set a goal of 30 minutes a day of physical activity- It doesn’t need to be all at once. Five minutes here, 10 minutes there is fine. As long as it is done at moderate intensity, you will get sufficient health benefits.
Walk- For most people, the easiest and most efficient activity is simply walking.
Wear a pedometer- Recent studies have shown that people wearing pedometers increase their activity level by 25 percent.
Build activity into your daily routine- Get up from your desk to deliver a message. Take the stairs instead of the elevator. Add some extra steps when you are doing household chores. Find small ways to get moving.
Record daily physical activity in a journal- Self-monitoring is important when making a lifestyle change and journaling activity levels can be good reinforcement.
Don’t worry so much about weight loss- Realize if you are regularly active you can get significant health benefits even if you never lose a pound. People serious about weight loss should build in 60 minutes per day of physical activity.
Find activities you enjoy and feel good about doing- Try a variety of activities. Variety is good for the body – and the mind.
Get the support of friends and family- Challenge them to add 30 minutes of physical activity to their daily routine and you can hold each other accountable.
Set realistic expectations- There is a risk in building up expectations that you’ll make a change Jan. 1. The biggest obstacle to successful lifestyle change is expectation. People are unrealistic about what they can achieve and how quickly they can achieve it. Any time is a good time to make a commitment to change your life style.
Source: The Times of India
Peter Brubaker, professor of health and exercise science at Wake Forest University, said that regular daily exercise is the most important step towards a healthier lifestyle.
“People don’t realize you can get tremendous benefit from regular physical activity even if you never lose a pound,” he said.
Increased physical activity could ensure a reduced risk for heart disease, stroke, diabetes, colorectal cancer, breast cancer, bone and joint conditions, and sleep apnea.
Brubaker has put forth several tips for how to increase daily physical activity, which are as follows:
Set a goal of 30 minutes a day of physical activity- It doesn’t need to be all at once. Five minutes here, 10 minutes there is fine. As long as it is done at moderate intensity, you will get sufficient health benefits.
Walk- For most people, the easiest and most efficient activity is simply walking.
Wear a pedometer- Recent studies have shown that people wearing pedometers increase their activity level by 25 percent.
Build activity into your daily routine- Get up from your desk to deliver a message. Take the stairs instead of the elevator. Add some extra steps when you are doing household chores. Find small ways to get moving.
Record daily physical activity in a journal- Self-monitoring is important when making a lifestyle change and journaling activity levels can be good reinforcement.
Don’t worry so much about weight loss- Realize if you are regularly active you can get significant health benefits even if you never lose a pound. People serious about weight loss should build in 60 minutes per day of physical activity.
Find activities you enjoy and feel good about doing- Try a variety of activities. Variety is good for the body – and the mind.
Get the support of friends and family- Challenge them to add 30 minutes of physical activity to their daily routine and you can hold each other accountable.
Set realistic expectations- There is a risk in building up expectations that you’ll make a change Jan. 1. The biggest obstacle to successful lifestyle change is expectation. People are unrealistic about what they can achieve and how quickly they can achieve it. Any time is a good time to make a commitment to change your life style.
Source: The Times of India
Monday 28 December 2009
Wednesday 9 December 2009
Saturday 5 December 2009
Saturday 28 November 2009
Post Office Savings Schemes
PostOffice Savings Account
3.5% per annum on individual/ joint accounts.
Minimum Rs. 50/-. Maximum Rs. 1,00,000/- for an individual account. Rs. 2,00,000/- for joint account.
Cheque facility available. Interest Tax Free.
5-YearPost Office Recurring Deposit Account
On maturity Rs. 10/- account fetches Rs. 728.90/-. Can be continued for another 5 years on year to year basis.
Rate of interest 7.5% (quarterly compounded)
Minimum Rs. 10/- per month or any amount in multiples of Rs. 5/-. No maximum limit.
One withdrawal upto 50% of the balance allowed after one year. Full maturity value allowed on R.D. Accounts restricted to that of Rs. 50/- denomination in case of death of depositor subject to fulfillment of certain conditions. 6 & 12 months advance deposits earn rebate.
PostOffice Time Deposit Account
Interest payable annually but calculated quarterly.
Period Rate
1 yr. A/c 6.25%
2 yr. A/c 6.50%
3 yr. A/c 7.25%
5 yr. A/c 7.50%
Minimum Rs. 200/- and in multiple thereof. No maximum limit.
Account may be opened by individual. 2,3 & 5 year account can be closed after 1 year at discount. Account can also be closed after six months but before one year without interest. The investment under this scheme qualify for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.
PostOffice Monthly Income Account
8% per annum payable i.e. Rs. 80/- will be paid every month on a deposit of Rs. 12000/-.
In multiples of Rs. 1500/- Maximum Rs. 4.5 lakhs in single account and Rs. 9 lakhs in joint account.
Maturity period is 6 years. Can be prematurely encashed after one year but before 3 years at the discount of 2% of the deposit and after 3 years at the discount of 1% of the deposit. (Discount means deduction from the deposit.) A bonus of 5% on principal amount is admissible on maturity in respect of MIS accounts opened on or after 8.12.07
15year Public Provident Fund Account
8% per annum (compounded yearly).
Minimum Rs. 500/- Maximum Rs. 70,000/- in a financial year. Deposits can be made in lumpsum or in 12 installments.
Deposits qualify for deduction from income under Sec. 80C of IT Act. Interest is completely tax-free. Withdrawal is permissible every year from 7th financial year. Loan facility available from 3rd Financial year. No attachment under court decree order.
KisanVikas Patra
Money doubles in 8 years & 7 months. Facility for premature encashment.
Rate of interest 8.4% (compounded yearly)
No limit on investment. Available in denominations of Rs. 100/-, Rs. 500/-, Rs. 1000/-, Rs. 5000/-, Rs. 10,000/-, in all Post Offices and Rs. 50,000/- in all Head Post Offices.
A single holder type certificate may be issued to an adult for himself or on behalf of a minor or to a minor, can also be purchased jointly by two adults
National Savings Certificate (VIII issue)
8% Interest compounded six monthly but payable at maturity. Rs. 100/- grows to Rs 160.10 after 6 years.
Minimum Rs. 100/- No maximum limit available in denominations of Rs. 100/-, 500/-, 1000/-, 5000/- & Rs. 10,000/-.
A single holder type certificate can be purchased by an adult for himself or on behalf of a minor or to a minor. Deposits quality for tax rebate under Sec. 80C of IT Act.
The interest accruing annually but deemed to be reinvested will also qualify for deduction under Section 80C of IT Act.
Senior Citizens Savings Scheme
9% per annum, payable from the date of deposit of 31st March/30th Sept/31st December in the first instance & thereafter, interest shall be payable on 31st March, 30th June, 30th Sept and 31st December
There shall be only one deposit in the account in multiple of Rs.1000/- maximum not exceeding rupees fifteen lakh.
Maturity period is 5 years. A depositor may operate more than a account in individual capacity or jointly with spouse. Age should be 60 years or more, and 55 years or more but less than 60 years who has retired on superannuation or otherwise on the date of opening of account subject to the condition that the account is opened within one month of receipt of retirement benefits. Premature closure is allowed after one year on deduction of 1.5% interest & after 2 years 1% interest. TDS is deducted at source on interest if the interest amount is more than Rs.10,000/- p.a. The investment under this scheme qualify for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.
Sec 80C benefit: Investments up to Rs 1 lakh in specified securities (maximum of Rs 70,000 in PPF) qualify for deduction
Compounded half-yearly
Compounded yearly
Compounded quarterly
Payable quarterly
Monday 9 November 2009
FIXED DEPOSIT RATES LIKELY TO GO UP
Fixed Deposit rates likely to go up
9 Nov 2009, 0706 hrs IST, Srikala Bhashyam, ET Bureau
SOURCE: THE ECONOMIC TIMES
Though the Reserve Bank of India (RBI's) recent credit policy didn't have much for the markets to cheer, there are indications of a rising interest rate regime which should be good news for those relying on fixed deposits. The central bank has indicated that rates could tighten up in the coming days and the real impact could be felt in the first quarter of the next year.
The year 2009 has been one of the interesting years in interest rate cycles with the rates coming under central banks' scrutiny throughout the year. While the stimulus packages for the revival of financial markets pushed down the rates to near zero levels in most economies, the rate fall was not significant in the case of the domestic market. In fact, the domestic deposit rates fell only by a couple of percentage points during the first half of the current year.
The government's aggressive borrowing has to a great extent stalled the fall and this is reflected in the poor performance of income funds. As many would have noticed, the lack of fall or even the steady rise in long-term paper rates has changed the performance of income funds.
The picture is unlikely to change in the near term with the RBI too indicating hardening of rates. As a result, tough times are likely to continue for those invested in income funds in the recent times.
But the rising rate is always good news for those looking at bank deposits. The rates that had begun to slip in the last few quarters are not in the reversal mode but it could become a reality in early to middle of 2009. Hence, investors who have the habit of allocating funds in fixed deposits can wait out for a few months to make the investments
.
It is not a bad idea to allocate funds to floaters too as they automatically take care of the changing interest rate scenario. With inflation too expected to move upwards, there is an additional case for the general interest rates to move up.
If you are on the borrowing side, the future scenario is not very comforting as rising rates will once again push up the borrowing costs. The immediate impact would be on products like personal loans and car loans though the latter might get relief from manufactures.
The change in fortunes of the auto sector has once again revived hopes for the sector in general, and increased competition in the passenger car segment could push OEMs to offer discounts. Such discounts could come in the form of subsidised interest rates as seen during boom times.
However, the same can't be said of the two-wheeler segment as the margin pressure is high in this segment. With the loan
ticket size too being small the competition on the funding side too is restricted to a few players. As a result, buyers may not be in for huge discounts.
However, home loan borrowers may escape from the pressures of high borrowing costs as the RBI is understood to be looking at supporting the sector. There are reports that banks are likely to increase the allocation towards priority sector lending and property loans could account for a bigger chunk. That could negate the ill effects of rising borrowing costs and should help the customer base in a big way.
9 Nov 2009, 0706 hrs IST, Srikala Bhashyam, ET Bureau
SOURCE: THE ECONOMIC TIMES
Though the Reserve Bank of India (RBI's) recent credit policy didn't have much for the markets to cheer, there are indications of a rising interest rate regime which should be good news for those relying on fixed deposits. The central bank has indicated that rates could tighten up in the coming days and the real impact could be felt in the first quarter of the next year.
The year 2009 has been one of the interesting years in interest rate cycles with the rates coming under central banks' scrutiny throughout the year. While the stimulus packages for the revival of financial markets pushed down the rates to near zero levels in most economies, the rate fall was not significant in the case of the domestic market. In fact, the domestic deposit rates fell only by a couple of percentage points during the first half of the current year.
The government's aggressive borrowing has to a great extent stalled the fall and this is reflected in the poor performance of income funds. As many would have noticed, the lack of fall or even the steady rise in long-term paper rates has changed the performance of income funds.
The picture is unlikely to change in the near term with the RBI too indicating hardening of rates. As a result, tough times are likely to continue for those invested in income funds in the recent times.
But the rising rate is always good news for those looking at bank deposits. The rates that had begun to slip in the last few quarters are not in the reversal mode but it could become a reality in early to middle of 2009. Hence, investors who have the habit of allocating funds in fixed deposits can wait out for a few months to make the investments
.
It is not a bad idea to allocate funds to floaters too as they automatically take care of the changing interest rate scenario. With inflation too expected to move upwards, there is an additional case for the general interest rates to move up.
If you are on the borrowing side, the future scenario is not very comforting as rising rates will once again push up the borrowing costs. The immediate impact would be on products like personal loans and car loans though the latter might get relief from manufactures.
The change in fortunes of the auto sector has once again revived hopes for the sector in general, and increased competition in the passenger car segment could push OEMs to offer discounts. Such discounts could come in the form of subsidised interest rates as seen during boom times.
However, the same can't be said of the two-wheeler segment as the margin pressure is high in this segment. With the loan
ticket size too being small the competition on the funding side too is restricted to a few players. As a result, buyers may not be in for huge discounts.
However, home loan borrowers may escape from the pressures of high borrowing costs as the RBI is understood to be looking at supporting the sector. There are reports that banks are likely to increase the allocation towards priority sector lending and property loans could account for a bigger chunk. That could negate the ill effects of rising borrowing costs and should help the customer base in a big way.
Friday 6 November 2009
Top 8 Money tips for NRIs
Top 8 money tips for NRIs
Source: Geeta Nair
NRIs, have you’ve been toiling hard to rake in that extra bit but unable to fathom where all your money disappears by the end of the month? Chances are there’s a money leak. Fix it right away with a financial budget says Geeta Nair before your expenses balloon to unimaginable proportions leading you to a debt trap.
A financial budget can help you set your finances in order. It’s all about personal finance. And it’ll help you allocate your income appropriately among your needs, wants and desires enabling you to meet your financial goals easily.
Here’s how NRIs can go about managing their finances:
(1) Ascertain your total income: Jot down all your sources of income. Apart from your regular employment, your part time jobs, dividends, interest income from investments are all sources of income. Total them all.
(2) Save atleast 20% to 30% of your gross income: Says Kairav Shah, Vice President, Personal Finance, Apnaloan.com, “Make it a point to set aside 20% to 30% of your total monthly income towards savings always. Leave this money untouched. And depending on your age, goals and risk profile invest this amount in mutual funds, equities, fixed income among others.”
But then do you have a good support system in place? For instance if you’re living in places like Australia wherein children’s education, retirement, health are supported by the government there’s not much to worry. States Shah, “If you’re covered under a social security in whichever country you reside, you may reduce the said percent by about 5%.”
(3) Buy property at the earliest: NRIs, buy a home at the earliest wherever you stay outside India. Opines Shah, “Most NRIs make the biggest mistake of not buying a home in the foreign country they stay and continue to live in rented apartments for long periods. You must consider buying a home at the earliest. This is because over a period of time property gets expensive, and if you continue to wait, back home too you’ll not be in a position to buy on your return after several years since by then the same may get unaffordable. You’d lose out both ways.” Besides real estate investment in India is important too.
(4) Are you spending on a need or a want? Paying up your monthly rent, electricity and grocery bills are all needs you can’t do without. But you can surely cut down on your several outings at expensive restaurants and shopping sprees that burn a deep hole in your pocket.
With several malls around convenience is in, no doubt. But think. Are you buying goods that you really need or are you following herd mentality? Have you used that food processor you bought last Christmas or is it still lying in a sealed pack in the corner of your kitchen unused? Analyse your past purchases and you’ll know your spending habits.
(5) Put off impulse purchases: Do you go berserk when you hear of heavy discount offers, free gifts and cashback schemes. Stop! Simply put off impulse buying. That buy-one get-one free offer may not be as good as it seems. Besides, give a thought – do you really Need that shirt now or do you Want it because it simply appears to be a good offer?
(6) Follow the 60:30:10 ratio: Try maintaining a ratio of 60:30:10 between your needs, wants and desires. Maintain a list of each of your expenses howsoever insignificant they may seem. And you’ll know how much you’ve ended up spending on items you don’t really need. Segregate the fixed and variable expenditure. While there’s not much you can do with the former, you can easily fine-tune your variable expenditure.
(7) Contingency fund is a must: Financial emergencies such as loss of employment, illness in the family, accidents etc can spring up unpleasant surprises just anytime. You need a contingency fund that can take care of sudden financial needs. Opines Shah, "Keep aside three to six months of your income for emergencies. And you won’t have to dip into your savings in case of a financial crisis."
(8) Stick to your budget, review regularly: Creating a budget is easy but its hard to stick to it. Ascertain each time how closer you have been to your laid out plan. Make necessary changes wherever needed, fine tune and stick to your budget always come what may. Do a review to find out how far you’re on track and whether there is a diversion at all. If yes, make up for the same in the next month and soon you’ll be on the right track to achieving your goals.
Source: The Economic Times - NRI Services
Source: Geeta Nair
NRIs, have you’ve been toiling hard to rake in that extra bit but unable to fathom where all your money disappears by the end of the month? Chances are there’s a money leak. Fix it right away with a financial budget says Geeta Nair before your expenses balloon to unimaginable proportions leading you to a debt trap.
A financial budget can help you set your finances in order. It’s all about personal finance. And it’ll help you allocate your income appropriately among your needs, wants and desires enabling you to meet your financial goals easily.
Here’s how NRIs can go about managing their finances:
(1) Ascertain your total income: Jot down all your sources of income. Apart from your regular employment, your part time jobs, dividends, interest income from investments are all sources of income. Total them all.
(2) Save atleast 20% to 30% of your gross income: Says Kairav Shah, Vice President, Personal Finance, Apnaloan.com, “Make it a point to set aside 20% to 30% of your total monthly income towards savings always. Leave this money untouched. And depending on your age, goals and risk profile invest this amount in mutual funds, equities, fixed income among others.”
But then do you have a good support system in place? For instance if you’re living in places like Australia wherein children’s education, retirement, health are supported by the government there’s not much to worry. States Shah, “If you’re covered under a social security in whichever country you reside, you may reduce the said percent by about 5%.”
(3) Buy property at the earliest: NRIs, buy a home at the earliest wherever you stay outside India. Opines Shah, “Most NRIs make the biggest mistake of not buying a home in the foreign country they stay and continue to live in rented apartments for long periods. You must consider buying a home at the earliest. This is because over a period of time property gets expensive, and if you continue to wait, back home too you’ll not be in a position to buy on your return after several years since by then the same may get unaffordable. You’d lose out both ways.” Besides real estate investment in India is important too.
(4) Are you spending on a need or a want? Paying up your monthly rent, electricity and grocery bills are all needs you can’t do without. But you can surely cut down on your several outings at expensive restaurants and shopping sprees that burn a deep hole in your pocket.
With several malls around convenience is in, no doubt. But think. Are you buying goods that you really need or are you following herd mentality? Have you used that food processor you bought last Christmas or is it still lying in a sealed pack in the corner of your kitchen unused? Analyse your past purchases and you’ll know your spending habits.
(5) Put off impulse purchases: Do you go berserk when you hear of heavy discount offers, free gifts and cashback schemes. Stop! Simply put off impulse buying. That buy-one get-one free offer may not be as good as it seems. Besides, give a thought – do you really Need that shirt now or do you Want it because it simply appears to be a good offer?
(6) Follow the 60:30:10 ratio: Try maintaining a ratio of 60:30:10 between your needs, wants and desires. Maintain a list of each of your expenses howsoever insignificant they may seem. And you’ll know how much you’ve ended up spending on items you don’t really need. Segregate the fixed and variable expenditure. While there’s not much you can do with the former, you can easily fine-tune your variable expenditure.
(7) Contingency fund is a must: Financial emergencies such as loss of employment, illness in the family, accidents etc can spring up unpleasant surprises just anytime. You need a contingency fund that can take care of sudden financial needs. Opines Shah, "Keep aside three to six months of your income for emergencies. And you won’t have to dip into your savings in case of a financial crisis."
(8) Stick to your budget, review regularly: Creating a budget is easy but its hard to stick to it. Ascertain each time how closer you have been to your laid out plan. Make necessary changes wherever needed, fine tune and stick to your budget always come what may. Do a review to find out how far you’re on track and whether there is a diversion at all. If yes, make up for the same in the next month and soon you’ll be on the right track to achieving your goals.
Source: The Economic Times - NRI Services
Get the most out of fixed deposits
Get the most out of fixed deposits
By- Roshan Kumar, ECONOMICTIMES.COM
High volatility in stock markets combined with the easing inflation has again made fixed deposits an attractive avenue for investors, particularly those seeking assured returns. For, FD schemes of banks not only give assured returns but risk-free returns as well, and all one has to do is park one’s money in such a scheme and forget about it till maturity.
The best part of FD schemes are that they are one of the safe investment avenues and there is very little chance of losing you money as banks are closely regulated and monitored by the Reserve Bank of India. In the current turbulent times, investors are increasingly banking on such age-old investment tools.
Another advantage of FD schemes are that they can get you loans of up to 75-90% of the amount deposited with the bank.
Here are some tips to get the most out of FD schemes:
Do your research well
Take a look at the interest rates offered by different banks before going in for a scheme. You also need to decide the tenure of your deposit. The interest rates offered by different banks could vary. Also, the interest rates for different tenures are different.
Interests offered by banks are either calculated quarterly, half-yearly, yearly or at maturity. So, calculate which bank is going to get you the highest interest.
Suppose there are two banks -- 'A' & 'B'. Bank 'A' gives an interest rate of 10% p.a on a fixed deposit of five years and the interest is calculated on a quarterly basis.
Bank 'B' gives the same interest rate for the same period, but the interest is calculated on a yearly basis. In this case, Bank 'A' will get you more interest than Bank 'B'. The more frequently interests are calculated, the more interest you will get.
Split your FD investments
TDS (tax deductable as source) at 10% is applicable on fixed deposits if the interest earned exceeds Rs 10,000 in a financial year. The tax liability of TDS is determined at the branch level.
To avoid TDS, you can split your fixed deposits, that is, open fixed deposits in different branches of the bank, so that the interest earned does not exceed Rs 10,000 in a particular branch. You could also open fixed deposits in different banks to avoid TDS.
Splitting you fixed deposits has another benefit as well. If you are in need of urgent cash and need to withdraw money, you won't have to break all your fixed deposits.
You could get the money by breaking either one or two FD accounts while the remaining accounts would continue to earn you the predetermined interest.
Re-investing the interest earned
You have the option of either withdrawing the interest earned or reinvesting the same. If you opt for the withdrawal option, the interest earned will be credited to the savings account specified by you on a regular basis.
The interest you earn every year will be higher compared to the previous year if you keep reinvesting the interest. On the other hand, if you withdraw the interest, you will earn the same interest every year until maturity.
Let’s assume that you are planning to invest Rs 50,000 in a FD scheme for 5 years at the rate of 9.5% p.a. and the interest is calculated on a quarterly basis. If you reinvest the interest, your total interest earned will amount to Rs 29,955.49 in 5 years.
If you withdraw the interest, your total interest earned will amount to Rs 24,609.55. That is a difference of Rs 5,345.94. The greater the fixed deposit, the greater the difference will be.
Tax-saver FDs for better returns
Tax saver fixed deposits give you dual benefits. Apart from giving you an assured return, they are also eligible for exemption under Section 80C of the Income Tax Act 1961. However, TDS is applicable.
These fixed deposits have a lock-in period of five years and premature withdrawal is not allowed. You can’t use this deposit as a means to secure loan from the bank and the maximum amount you can invest in this instrument is Rs 1 lakh.
HDFC Bank at present offers 9.50% interest (calculated quarterly) on tax-saving FDs as well as on regular FDs for 5 years. ICICI Bank, on the other hand, gives 8.5% interest (calculated quarterly) on tax-saving FDs and 9.5% (calculated quarterly) interest on regular FDs for 5 years.
If you fall in the higher tax-slab, investing in tax-saver FDs will fetch you more return than a regular FD as tax-saving FDs are exempted under Section 80C.
SOURCE: THE ECONOMIC TIMES
By- Roshan Kumar, ECONOMICTIMES.COM
High volatility in stock markets combined with the easing inflation has again made fixed deposits an attractive avenue for investors, particularly those seeking assured returns. For, FD schemes of banks not only give assured returns but risk-free returns as well, and all one has to do is park one’s money in such a scheme and forget about it till maturity.
The best part of FD schemes are that they are one of the safe investment avenues and there is very little chance of losing you money as banks are closely regulated and monitored by the Reserve Bank of India. In the current turbulent times, investors are increasingly banking on such age-old investment tools.
Another advantage of FD schemes are that they can get you loans of up to 75-90% of the amount deposited with the bank.
Here are some tips to get the most out of FD schemes:
Do your research well
Take a look at the interest rates offered by different banks before going in for a scheme. You also need to decide the tenure of your deposit. The interest rates offered by different banks could vary. Also, the interest rates for different tenures are different.
Interests offered by banks are either calculated quarterly, half-yearly, yearly or at maturity. So, calculate which bank is going to get you the highest interest.
Suppose there are two banks -- 'A' & 'B'. Bank 'A' gives an interest rate of 10% p.a on a fixed deposit of five years and the interest is calculated on a quarterly basis.
Bank 'B' gives the same interest rate for the same period, but the interest is calculated on a yearly basis. In this case, Bank 'A' will get you more interest than Bank 'B'. The more frequently interests are calculated, the more interest you will get.
Split your FD investments
TDS (tax deductable as source) at 10% is applicable on fixed deposits if the interest earned exceeds Rs 10,000 in a financial year. The tax liability of TDS is determined at the branch level.
To avoid TDS, you can split your fixed deposits, that is, open fixed deposits in different branches of the bank, so that the interest earned does not exceed Rs 10,000 in a particular branch. You could also open fixed deposits in different banks to avoid TDS.
Splitting you fixed deposits has another benefit as well. If you are in need of urgent cash and need to withdraw money, you won't have to break all your fixed deposits.
You could get the money by breaking either one or two FD accounts while the remaining accounts would continue to earn you the predetermined interest.
Re-investing the interest earned
You have the option of either withdrawing the interest earned or reinvesting the same. If you opt for the withdrawal option, the interest earned will be credited to the savings account specified by you on a regular basis.
The interest you earn every year will be higher compared to the previous year if you keep reinvesting the interest. On the other hand, if you withdraw the interest, you will earn the same interest every year until maturity.
Let’s assume that you are planning to invest Rs 50,000 in a FD scheme for 5 years at the rate of 9.5% p.a. and the interest is calculated on a quarterly basis. If you reinvest the interest, your total interest earned will amount to Rs 29,955.49 in 5 years.
If you withdraw the interest, your total interest earned will amount to Rs 24,609.55. That is a difference of Rs 5,345.94. The greater the fixed deposit, the greater the difference will be.
Tax-saver FDs for better returns
Tax saver fixed deposits give you dual benefits. Apart from giving you an assured return, they are also eligible for exemption under Section 80C of the Income Tax Act 1961. However, TDS is applicable.
These fixed deposits have a lock-in period of five years and premature withdrawal is not allowed. You can’t use this deposit as a means to secure loan from the bank and the maximum amount you can invest in this instrument is Rs 1 lakh.
HDFC Bank at present offers 9.50% interest (calculated quarterly) on tax-saving FDs as well as on regular FDs for 5 years. ICICI Bank, on the other hand, gives 8.5% interest (calculated quarterly) on tax-saving FDs and 9.5% (calculated quarterly) interest on regular FDs for 5 years.
If you fall in the higher tax-slab, investing in tax-saver FDs will fetch you more return than a regular FD as tax-saving FDs are exempted under Section 80C.
SOURCE: THE ECONOMIC TIMES
SBI extends 8% home loan scheme to March 2010
MUMBAI: India's largest lender State Bank of India has extended its special home loan scheme at 8 per cent interest rate by over four months to March 31, 2010, a move which would provide relief to small home loan borrowers.
The bank, which offers the special scheme under 'My Home Campaign', offers 8 per cent fixed interest rate for 5 years for loans up to Rs 5 lakh, with a maximum tenure of 10 years.
The scheme was originally slated to end tomorrow. For loans above Rs 5 lakh and up to Rs 50 lakh, interest rate has been fixed at 8% during the first year and 8.5% during second and third years, SBI said in a statement here.
The bank is also offering SBI MaxGain, under which it offers home loan as overdraft with possibility of saving interest.
Targeting customers buying high-end properties, the bank is offering SBI Advantage Home Loan, which would carry a fixed interest rate of 8% during the first year and 9 per cent during second and third years, SBI said.
These schemes help clients to know about their loan repayment obligations at low interest rates for 3 to 5 years, the bank said.
After the offer period, customers will have the option to opt for a fixed rate with a reset frequency of 5 years or floating interest rate linked to SBI's advance rate for the remaining loan term, SBI said.
SBI had launched these products in August this year for a limited period of three months.
Source: THE TIMES OF INDIA
The bank, which offers the special scheme under 'My Home Campaign', offers 8 per cent fixed interest rate for 5 years for loans up to Rs 5 lakh, with a maximum tenure of 10 years.
The scheme was originally slated to end tomorrow. For loans above Rs 5 lakh and up to Rs 50 lakh, interest rate has been fixed at 8% during the first year and 8.5% during second and third years, SBI said in a statement here.
The bank is also offering SBI MaxGain, under which it offers home loan as overdraft with possibility of saving interest.
Targeting customers buying high-end properties, the bank is offering SBI Advantage Home Loan, which would carry a fixed interest rate of 8% during the first year and 9 per cent during second and third years, SBI said.
These schemes help clients to know about their loan repayment obligations at low interest rates for 3 to 5 years, the bank said.
After the offer period, customers will have the option to opt for a fixed rate with a reset frequency of 5 years or floating interest rate linked to SBI's advance rate for the remaining loan term, SBI said.
SBI had launched these products in August this year for a limited period of three months.
Source: THE TIMES OF INDIA
Tuesday 3 November 2009
Friday 30 October 2009
Indian Postal Schemes - FAQ
The following are frequently asked questions by the investors, agents and others involved in mobilization of savings and answers to these FAQs are as under:-
1.Why a person should invest in National Savings Products ?
Ans: The investment in NS Products which are the products of Ministry of Finance, Government of India, has a sovereign guarantee and therefore NS products are fully secured and safe. The rate of interest offered on NS products are quite attractive as compared to other schemes in the financial market. The important aspect is that 100% of the collections made in the state is invested in the securities floated by the state govt. as a loan by the Govt. of India on long term basis which is used by the state govt. for their developmental activities in the state.
2. What products are under the fold of NSI ?
Ans : The Ministry of Finance, Govt. of India has structured 8 products to cater the needs of different segments of the investors as given below. All the products are need based and the investors can opt for the product as per their requirement.
1) Senior Citizen’s Savings Scheme
2) Post Office Monthly Income Account
3) 15 Year Public Provident Fund Account
4) National Savings Certificate (VIII Issue)
5) 5-year Post Office Recurring Deposit Account
6) Post Office Time Deposit Account
7) Post Office Savings Account
8) Kisan Vikas Patra
3. Who formulates and introduces the schemes of National Savings?
Ans. Ministry of Finance designs the product in consultation with experts committees /National Savings Institute.
4. From where the investor can buy the National Savings products?
Ans. All products are available at Post offices. PPF and Senior Citizen Savings Scheme are also available with designated Bank’s Branches.
5. Is post Office a member of clearing house to expedite Cheque clearance as banks?
Ans. Yes. All the HPO/GPOs are the members of clearing house for the purpose of Cheque clearance.
6. Is nomination facility available in National Savings Products?
Ans. Yes. The depositor can nominate one or more persons as the nominee and also mention the share of nominee in case of more than one nominee.
7. Whether NRI(s) can invest in the National Savings Products?
Ans. NRI(s) are not authorised to make investment in National Savings Products.
8. What is the mode of payment on maturity / premature closure of National Savings Products?
Ans: On Premature Closure or maturity, the deposits accepting authorities make payment in cash upto Rs. 20,000/- and by cheque in excess thereof.
9. Whether NS products enjoy the benefit of tax concession under Income Tax Act ?
Ans : The deposit in PPF, N.S.C. VIII Issue enjoy the benefit of tax concession under I.T.Act. The deposits in PPF qualify for deduction upto maximum of Rs.70,000/- and deposits in NSC VIII Issue upto Rs.1,00,000/- under Section 80 C of Income Tax Act. The interest accrued in NSC VIII Issue for 5 years also enjoy the benefit of Sec. 80 C of I.T.Act.
The interest on PPF and POSA is tax free as per the tax provisions under Sec.10 of I.T. Act.
PRODUCTS BASED FAQs
P.O.S.A.
1. Whether Cheque facility is available in P.O.S.A.?
Ans: Yes. Cheque facility is available in Post Office Savings Account like any other Bank.
2. Is there any maximum limit of deposit in the Post Office Savings Account?
Ans: Yes. In single account maximum deposit limit is Rs. 1,00,000 and in joint account it is Rs. 2,00,000 only.
3. Can a minor open a P.O.S.A. ?
Ans: Yes. A minor who has attained the age of 10 years can open POSA Account, More over a guardian can also open a account in the name of minor.
4. Can a person open a single as well as joint account separately?
Ans: Yes. A person can open a single and/or joint account separately even in the same post office.
P.O.R.D.
1. Can a Post Office Recurring Deposit Account (PORD) be continued / extended beyond maturity period?
Ans: Yes, for a further period of 5 years by depositor at his option with or without deposits.
2. Whether premature closure of the P.O.R.D. account is permissible?
Ans: Yes. The holder of the account may prematurely close the account after three years from the date of opening and in such a case interest @ of Post Office Savings Account shall be payable.
3. Is there any provision of interest on discontinued account after maturity?
Ans: Yes. If maturity value of a discontinued account is retained by a depositor after the date of maturity, post maturity interest is allowed at P.O.S.A. rate as applicable from time to time.
4. Is there any social security benefit in PORD account?
Ans: Yes. All accounts upto maximum deposit Rs. 50/- P.M. are eligible for social security benefit subject to certain terms and conditions and maturity amount is paid to the nominee/legal heir of the depositor.
Post Office Monthly Income Scheme
1. Can a depositor open more than one P.O.M.I.S. account?
Ans: Yes. A depositor may open more than one account subject to the condition that deposits in all accounts taken together shall not exceed the prescribed limit.
2. Can joint MIS account be opened by 3 persons?
Ans : A joint MIS account can be opened by 2 and 3 persons and in such case, the share of the individual account holder will be ½ or 1/3 of the total deposits as the case may be. The maximum amount that can be deposited in a joint account opened with 2 or 3 persons will however be Rs.9,00,000/- only.
3. Whether a depositor is entitled for bonus on MIS?
Ans : No bonus shall be paid on the deposits made in the POMIS account opened on or after 13th Feb. 2006. However, bonus will be paid on all the accounts already opened before 13th Feb. 2006, on their maturity.Government of India announced bonus @ 5% on M.I.S.accounts opened on or after 8th December 2007.
4. Can a MIS account be prematurely closed?
Ans : A MIS account can be prematurely closed at any time after the expiry of a period of one year from the date of opening of such account subject to the condition that –
i) If the account is closed on or before expiry of 3 years of opening of such account, an amount equal to 2% of the deposit shall be deducted and remainder paid to him.
ii) If the account is closed after expiry of 3 years from the date of opening of such account, an amount equal to 1% of the deposit shall be deducted and remainder paid to the depositor.
KISAN VIKAS PATRA
1. Whether replacement of lost or destroyed K.V.P. is permissible?
Ans: Yes. The holder should apply for the issue of duplicate certificate and comply with the prescribed procedure..
2. Whether the K.V.P. can be encashed through messenger?
Ans: Yes. If endorsement on the back of the certificate have been signed already by the holder and accompanied by a letter of authority containing specimen signature duly attested.
POST OFFICE TIME DEPOSIT ACCOUNT
1. Whether post maturity interest is paid on Time Deposit Accounts or not?
Ans: Yes. In case payment of a deposit becomes due and the same has not been made, interest shall be allowed on the amount at the post office savings account rate for a maximum period of two years only.
2. Whether Time Deposit Account can be pledged?
Ans: Yes. An application should be made in the prescribed form by the transferors and transferee as per rules.
3. Can the interest of Time Deposit Account be credited to the Post Office Savings Bank account standing in same post office?
Ans: Yes, on request in writing from the investor.
4. Can a POTD account be prematurely closed?
Ans: Yes. After six months. If premature closure is made after six months but before 1 year, no interest will be payable. In case the premature closer is after 1 year, the depositor will be paid 2% less than the rate of interest applicable for the period of deposit remaining with the Post Office.
5. Can a POTD account be prematurely closed ?
Ans : A POTD account can be closed prematurely after six months but before one year without interest. A POTD account for 2, 3, 5 years can be closed after one year and depositor will get 2% less than the rate of interest specified for a deposit of one year, two years, or three years as the case may be.
N.S.C. VIIIth Issue
1. Can Post Office issue certificate of annual interest in respect of N.S.C.s (VIII issue) for purpose of filling of income tax returns?
Ans: Yes. Post office issues the certificate on demand by the investors.
2. Can premature encashment be made in NSC VIII th issue?
Ans: No premature investment is allowed. However, the premature encashment can be made only in three conditions i.e. on death of the holder, on forfeiture by a pledgee & when ordered by Court of Law.
PUBLIC PROVIDENT FUND ACCOUNT
1. Can PPF account be extended after 15 years and is there any time limit?
Ans: Yes. The account can be extended for one or more blocks of five years by giving option in form ‘H’ within one year from the date of maturity of the account.
2. Whether the PPF Account can be continued without further deposits after maturity?
Ans: Yes. The depositor can continue the account without deposits after completion of maturity /extended block period.
3. Can a PPF account be opened by HUF ?
Ans : A PPF account is not allowed to be opened by HUF w.e.f. 13.5.2005. However, all the accounts which were opened earlier will continue to earn interest till their maturity.
4. A PPF account where no subscription has been made in a year is treated as discontinued?
Ans : A subscriber can deposit the minimum subscription of Rs.500/- + default fee of Rs.50/- for each year of default subject to the condition that the total deposit during the year in which defaulted subscription is deposited should not exceed the maximum deposit ceiling of Rs.70,000/- and it is not treated as discontinued.
5. Whether a person is entitled for interest on the deposits made in excess of the prescribed limit i.e. Rs.70,000/- in a PPF account ?
Ans : Accountholder is not entitled for interest on any amount deposited in excess of Rs.70,000/- in a financial year in the PPF account.
6. If a person opens PPF account in the name of individual and also in the name of a minor(s), how the limit of deposit is determined?
Ans : The maximum amount of Rs.70,000/- can be deposited by a person in a financial year in a PPF account opened in his name and in the name(s) of a minor(s) taken together.
7. Whether the investment in N.S.C., KVP, POMIS, POTD earns post maturity interest?
Ans : The post maturity interest on all the above schemes will be paid up to maximum period of two years from the date of maturity at the POSA rate applicable from time to time.
8. If the investment is made in NS products by cheque, what is the date of deposit ?
Ans : In case of deposit by cheque in the NS products, except PPF and R.D., the date of deposit will be the date of realization of cheque. However, in the case of PPF and R.D., the date of deposit will be treated as date of presentation of cheque.
SENIOR CITIZEN’S SAVINGS SCHEME
1. Can a joint account be opened with any person under the Senior Citizen’s Savings Scheme?
Ans : The account can be opened jointly with the spouse only.
2. What should be the age of the spouse in the case of Joint. Account?
Ans : In the case of Joint account, the age of first applicant /depositor is the only factor to decide the eligibility to invest under this scheme. There is no age bar/limit for the 2nd applicant/joint holder (i.e. spouse).
3. What is the share of the joint account holder in the deposit in SCSS ?
Ans : The share of the joint account holder under the scheme is attributed to the first applicant/depositor only. Question of any share of the 2nd applicant/ account holder (spouse) therefore does not arise.
4. In case, the depositor does not close the account on maturity and also not extend the account for a period of three years within a period of one year, how the interest is to be calculated/paid after the maturity period ?
Ans : The account shall be treated as matured and post maturity interest at the rate applicable to the deposits under POSA from time to time shall only be admissible for the period beyond maturity in accordance with the rules. The amount of excess interest paid (at higher rate applicable to deposits under SCSS) after the maturity shall be deducted.
5. Whether TDS will be deducted on the interest paid on SCSS ?
Ans : The tax will be deducted at source in respect of interest payable under SCSS. However, senior citizen can avail the facility of furnishing the form no. 15-H under income tax rules who is a resident in India and of the age of 65 years or more.
6. Can SCSS account be transferred from one deposit office to other?
Ans : A depositor may apply enclosing the pass book thereto for transfer of his account from one deposit office to another provided that where deposit is Rs.1 lakh or above transfer fee of Rs.5/- per lakh on deposit for the first transfer and Rs.10/- per lakh of the deposit for the 2nd and subsequent transfers shall be payable by the depositor.
7.What is the period up to which post maturity interest can be given?
Ans : In case, the account is not closed on completion of the five years, maturity period and also not extended under rule 4(3), post maturity interest at the POSA rate from time to time shall be paid till the end of the month preceding the month of closure. No time limit has been prescribed.
Agency System
1. Whether the services of National Savings Agent’s are available to the investors?
Ans. Yes. Except in case of Post office savings Bank account. However investors in their own interest should either tender Cheque drawn in favour of the deposit accepting agency i.e. post office or bank to the agents or obtain proper Agent’s Receipt as a token of receipt from the agent.
2. How an individual can become agent of NSI ?
Ans: There are three types of agents operative in the National Savings Agency system namely ,
1. Standardised Agency System(SAS)
2. Mahila Pradhan Agency System(MPKBY)
3. Public Provident Fund Agency System(PPF)
The work relating to appointment, renewal and servicing of the agents has been transferred by Govt. of India to the respective State Governments and in most of the cases District Collector/Dy. Commissioner is the appointing authority in their respective area of operation. The procedure regarding appointment also varies from State to State depending on their requirements of agents and any person interested to work as agent in National Savings can approach the concerned District Magistrate / Dy. Collector/Director Small Savings of the respective state, Regional Director, NSI, of the concerned area.
3. What is the procedure for payments of commission?
Ans: Agents under National Savings are paid commissions at the rate of 1% in SAS and PPF agency system & 4% in MPKBY Agency System which is applicable in case of ladies only and they are authorized to canvass only Recurring Deposit Scheme. The payment of commission is made by the deposit accepting authorities at source. However, in case of deposit canvassed under Senior Citizen Savings Scheme, the commission is payable only 0.5% to women/men agents working under SAS agency.
Sources: National Savings Institute
http://www.nsiindia.gov.in
1.Why a person should invest in National Savings Products ?
Ans: The investment in NS Products which are the products of Ministry of Finance, Government of India, has a sovereign guarantee and therefore NS products are fully secured and safe. The rate of interest offered on NS products are quite attractive as compared to other schemes in the financial market. The important aspect is that 100% of the collections made in the state is invested in the securities floated by the state govt. as a loan by the Govt. of India on long term basis which is used by the state govt. for their developmental activities in the state.
2. What products are under the fold of NSI ?
Ans : The Ministry of Finance, Govt. of India has structured 8 products to cater the needs of different segments of the investors as given below. All the products are need based and the investors can opt for the product as per their requirement.
1) Senior Citizen’s Savings Scheme
2) Post Office Monthly Income Account
3) 15 Year Public Provident Fund Account
4) National Savings Certificate (VIII Issue)
5) 5-year Post Office Recurring Deposit Account
6) Post Office Time Deposit Account
7) Post Office Savings Account
8) Kisan Vikas Patra
3. Who formulates and introduces the schemes of National Savings?
Ans. Ministry of Finance designs the product in consultation with experts committees /National Savings Institute.
4. From where the investor can buy the National Savings products?
Ans. All products are available at Post offices. PPF and Senior Citizen Savings Scheme are also available with designated Bank’s Branches.
5. Is post Office a member of clearing house to expedite Cheque clearance as banks?
Ans. Yes. All the HPO/GPOs are the members of clearing house for the purpose of Cheque clearance.
6. Is nomination facility available in National Savings Products?
Ans. Yes. The depositor can nominate one or more persons as the nominee and also mention the share of nominee in case of more than one nominee.
7. Whether NRI(s) can invest in the National Savings Products?
Ans. NRI(s) are not authorised to make investment in National Savings Products.
8. What is the mode of payment on maturity / premature closure of National Savings Products?
Ans: On Premature Closure or maturity, the deposits accepting authorities make payment in cash upto Rs. 20,000/- and by cheque in excess thereof.
9. Whether NS products enjoy the benefit of tax concession under Income Tax Act ?
Ans : The deposit in PPF, N.S.C. VIII Issue enjoy the benefit of tax concession under I.T.Act. The deposits in PPF qualify for deduction upto maximum of Rs.70,000/- and deposits in NSC VIII Issue upto Rs.1,00,000/- under Section 80 C of Income Tax Act. The interest accrued in NSC VIII Issue for 5 years also enjoy the benefit of Sec. 80 C of I.T.Act.
The interest on PPF and POSA is tax free as per the tax provisions under Sec.10 of I.T. Act.
PRODUCTS BASED FAQs
P.O.S.A.
1. Whether Cheque facility is available in P.O.S.A.?
Ans: Yes. Cheque facility is available in Post Office Savings Account like any other Bank.
2. Is there any maximum limit of deposit in the Post Office Savings Account?
Ans: Yes. In single account maximum deposit limit is Rs. 1,00,000 and in joint account it is Rs. 2,00,000 only.
3. Can a minor open a P.O.S.A. ?
Ans: Yes. A minor who has attained the age of 10 years can open POSA Account, More over a guardian can also open a account in the name of minor.
4. Can a person open a single as well as joint account separately?
Ans: Yes. A person can open a single and/or joint account separately even in the same post office.
P.O.R.D.
1. Can a Post Office Recurring Deposit Account (PORD) be continued / extended beyond maturity period?
Ans: Yes, for a further period of 5 years by depositor at his option with or without deposits.
2. Whether premature closure of the P.O.R.D. account is permissible?
Ans: Yes. The holder of the account may prematurely close the account after three years from the date of opening and in such a case interest @ of Post Office Savings Account shall be payable.
3. Is there any provision of interest on discontinued account after maturity?
Ans: Yes. If maturity value of a discontinued account is retained by a depositor after the date of maturity, post maturity interest is allowed at P.O.S.A. rate as applicable from time to time.
4. Is there any social security benefit in PORD account?
Ans: Yes. All accounts upto maximum deposit Rs. 50/- P.M. are eligible for social security benefit subject to certain terms and conditions and maturity amount is paid to the nominee/legal heir of the depositor.
Post Office Monthly Income Scheme
1. Can a depositor open more than one P.O.M.I.S. account?
Ans: Yes. A depositor may open more than one account subject to the condition that deposits in all accounts taken together shall not exceed the prescribed limit.
2. Can joint MIS account be opened by 3 persons?
Ans : A joint MIS account can be opened by 2 and 3 persons and in such case, the share of the individual account holder will be ½ or 1/3 of the total deposits as the case may be. The maximum amount that can be deposited in a joint account opened with 2 or 3 persons will however be Rs.9,00,000/- only.
3. Whether a depositor is entitled for bonus on MIS?
Ans : No bonus shall be paid on the deposits made in the POMIS account opened on or after 13th Feb. 2006. However, bonus will be paid on all the accounts already opened before 13th Feb. 2006, on their maturity.Government of India announced bonus @ 5% on M.I.S.accounts opened on or after 8th December 2007.
4. Can a MIS account be prematurely closed?
Ans : A MIS account can be prematurely closed at any time after the expiry of a period of one year from the date of opening of such account subject to the condition that –
i) If the account is closed on or before expiry of 3 years of opening of such account, an amount equal to 2% of the deposit shall be deducted and remainder paid to him.
ii) If the account is closed after expiry of 3 years from the date of opening of such account, an amount equal to 1% of the deposit shall be deducted and remainder paid to the depositor.
KISAN VIKAS PATRA
1. Whether replacement of lost or destroyed K.V.P. is permissible?
Ans: Yes. The holder should apply for the issue of duplicate certificate and comply with the prescribed procedure..
2. Whether the K.V.P. can be encashed through messenger?
Ans: Yes. If endorsement on the back of the certificate have been signed already by the holder and accompanied by a letter of authority containing specimen signature duly attested.
POST OFFICE TIME DEPOSIT ACCOUNT
1. Whether post maturity interest is paid on Time Deposit Accounts or not?
Ans: Yes. In case payment of a deposit becomes due and the same has not been made, interest shall be allowed on the amount at the post office savings account rate for a maximum period of two years only.
2. Whether Time Deposit Account can be pledged?
Ans: Yes. An application should be made in the prescribed form by the transferors and transferee as per rules.
3. Can the interest of Time Deposit Account be credited to the Post Office Savings Bank account standing in same post office?
Ans: Yes, on request in writing from the investor.
4. Can a POTD account be prematurely closed?
Ans: Yes. After six months. If premature closure is made after six months but before 1 year, no interest will be payable. In case the premature closer is after 1 year, the depositor will be paid 2% less than the rate of interest applicable for the period of deposit remaining with the Post Office.
5. Can a POTD account be prematurely closed ?
Ans : A POTD account can be closed prematurely after six months but before one year without interest. A POTD account for 2, 3, 5 years can be closed after one year and depositor will get 2% less than the rate of interest specified for a deposit of one year, two years, or three years as the case may be.
N.S.C. VIIIth Issue
1. Can Post Office issue certificate of annual interest in respect of N.S.C.s (VIII issue) for purpose of filling of income tax returns?
Ans: Yes. Post office issues the certificate on demand by the investors.
2. Can premature encashment be made in NSC VIII th issue?
Ans: No premature investment is allowed. However, the premature encashment can be made only in three conditions i.e. on death of the holder, on forfeiture by a pledgee & when ordered by Court of Law.
PUBLIC PROVIDENT FUND ACCOUNT
1. Can PPF account be extended after 15 years and is there any time limit?
Ans: Yes. The account can be extended for one or more blocks of five years by giving option in form ‘H’ within one year from the date of maturity of the account.
2. Whether the PPF Account can be continued without further deposits after maturity?
Ans: Yes. The depositor can continue the account without deposits after completion of maturity /extended block period.
3. Can a PPF account be opened by HUF ?
Ans : A PPF account is not allowed to be opened by HUF w.e.f. 13.5.2005. However, all the accounts which were opened earlier will continue to earn interest till their maturity.
4. A PPF account where no subscription has been made in a year is treated as discontinued?
Ans : A subscriber can deposit the minimum subscription of Rs.500/- + default fee of Rs.50/- for each year of default subject to the condition that the total deposit during the year in which defaulted subscription is deposited should not exceed the maximum deposit ceiling of Rs.70,000/- and it is not treated as discontinued.
5. Whether a person is entitled for interest on the deposits made in excess of the prescribed limit i.e. Rs.70,000/- in a PPF account ?
Ans : Accountholder is not entitled for interest on any amount deposited in excess of Rs.70,000/- in a financial year in the PPF account.
6. If a person opens PPF account in the name of individual and also in the name of a minor(s), how the limit of deposit is determined?
Ans : The maximum amount of Rs.70,000/- can be deposited by a person in a financial year in a PPF account opened in his name and in the name(s) of a minor(s) taken together.
7. Whether the investment in N.S.C., KVP, POMIS, POTD earns post maturity interest?
Ans : The post maturity interest on all the above schemes will be paid up to maximum period of two years from the date of maturity at the POSA rate applicable from time to time.
8. If the investment is made in NS products by cheque, what is the date of deposit ?
Ans : In case of deposit by cheque in the NS products, except PPF and R.D., the date of deposit will be the date of realization of cheque. However, in the case of PPF and R.D., the date of deposit will be treated as date of presentation of cheque.
SENIOR CITIZEN’S SAVINGS SCHEME
1. Can a joint account be opened with any person under the Senior Citizen’s Savings Scheme?
Ans : The account can be opened jointly with the spouse only.
2. What should be the age of the spouse in the case of Joint. Account?
Ans : In the case of Joint account, the age of first applicant /depositor is the only factor to decide the eligibility to invest under this scheme. There is no age bar/limit for the 2nd applicant/joint holder (i.e. spouse).
3. What is the share of the joint account holder in the deposit in SCSS ?
Ans : The share of the joint account holder under the scheme is attributed to the first applicant/depositor only. Question of any share of the 2nd applicant/ account holder (spouse) therefore does not arise.
4. In case, the depositor does not close the account on maturity and also not extend the account for a period of three years within a period of one year, how the interest is to be calculated/paid after the maturity period ?
Ans : The account shall be treated as matured and post maturity interest at the rate applicable to the deposits under POSA from time to time shall only be admissible for the period beyond maturity in accordance with the rules. The amount of excess interest paid (at higher rate applicable to deposits under SCSS) after the maturity shall be deducted.
5. Whether TDS will be deducted on the interest paid on SCSS ?
Ans : The tax will be deducted at source in respect of interest payable under SCSS. However, senior citizen can avail the facility of furnishing the form no. 15-H under income tax rules who is a resident in India and of the age of 65 years or more.
6. Can SCSS account be transferred from one deposit office to other?
Ans : A depositor may apply enclosing the pass book thereto for transfer of his account from one deposit office to another provided that where deposit is Rs.1 lakh or above transfer fee of Rs.5/- per lakh on deposit for the first transfer and Rs.10/- per lakh of the deposit for the 2nd and subsequent transfers shall be payable by the depositor.
7.What is the period up to which post maturity interest can be given?
Ans : In case, the account is not closed on completion of the five years, maturity period and also not extended under rule 4(3), post maturity interest at the POSA rate from time to time shall be paid till the end of the month preceding the month of closure. No time limit has been prescribed.
Agency System
1. Whether the services of National Savings Agent’s are available to the investors?
Ans. Yes. Except in case of Post office savings Bank account. However investors in their own interest should either tender Cheque drawn in favour of the deposit accepting agency i.e. post office or bank to the agents or obtain proper Agent’s Receipt as a token of receipt from the agent.
2. How an individual can become agent of NSI ?
Ans: There are three types of agents operative in the National Savings Agency system namely ,
1. Standardised Agency System(SAS)
2. Mahila Pradhan Agency System(MPKBY)
3. Public Provident Fund Agency System(PPF)
The work relating to appointment, renewal and servicing of the agents has been transferred by Govt. of India to the respective State Governments and in most of the cases District Collector/Dy. Commissioner is the appointing authority in their respective area of operation. The procedure regarding appointment also varies from State to State depending on their requirements of agents and any person interested to work as agent in National Savings can approach the concerned District Magistrate / Dy. Collector/Director Small Savings of the respective state, Regional Director, NSI, of the concerned area.
3. What is the procedure for payments of commission?
Ans: Agents under National Savings are paid commissions at the rate of 1% in SAS and PPF agency system & 4% in MPKBY Agency System which is applicable in case of ladies only and they are authorized to canvass only Recurring Deposit Scheme. The payment of commission is made by the deposit accepting authorities at source. However, in case of deposit canvassed under Senior Citizen Savings Scheme, the commission is payable only 0.5% to women/men agents working under SAS agency.
Sources: National Savings Institute
http://www.nsiindia.gov.in
Wednesday 28 October 2009
Interest rates set to rise
Interest rates set to rise, signals RBI
Prabhakar Sinha , TNN 28 October 2009, 01:52am IST
Interest rates are likely to start rising soon. This was clearly indicated by the second quarter review of the monetary policy, 2009-10, unveiled by RBI governor D Subbarao on Tuesday. Releasing the review, the governor said that in the light of mounting inflationary pressure, which is projected to touch 6.5% by March 2010, the monetary policy's first priority would be to contain the inflationary expectation.
The RBI left all major policy rates like repo and reverse repo rates — the rates at which it lends to and accepts money from banks respectively — and cash reserve ratio (CRR) — the percentage of deposits banks are supposed to keep with the central bank — unchanged. But it took the first step towards rolling back its easy money policies, pursued for the past year to counter the economic slowdown. It terminated special liquidity facilities like credit refinance limits extended to banks against the loans given to exporters and mutual fund companies ahead of the original March 31, 2010 expiry date.
The central bank also reversed its earlier decision to reduce the minimum required investment by banks in government securities from 25% to 24% of deposits. The statutory liquidity ratio is now once again 25%. As most banks have already invested more than 25% in government securities, this decision will not have an immediate impact on the availability of funds, but these measures clearly indicate the RBI's intent to discontinue the accommodative monetary policy.
Responding to the measures, finance minister Pranab Mukherjee said that the RBI's assessment, on the whole, is in conformity with the government's thinking on both fiscal policy and monetary policy. However, he said the government would continue with the stimulus packages till the economy is back on a firm recovery path. Mukherjee also disagreed with RBI's projection of 6% economic growth with an upward bias for 2009-10. He said he would prefer to go with the growth projection of 6.5% to 6.75% given by the prime minister's economic advisory council in its mid-year review.
In the light of inflation rising to 6.5% by March 2010, the central bank will be left with little choice but to raise the policy rates. With the rise in the inflation, the net interest rates of all the policy instruments will become negative. In that situation, Subbarao said, the central bank will use its monetary policy rates to anchor the inflationary expectations in the country. Keeping this in mind only, he said, the money supply target has been reduced by one percentage point to 17%. However, he was quick to add that exit of the easy money policy will be calibrated in such a fashion that while the recovery process is not hampered, inflation expectations remain anchored.
He further hoped that with the new prime lending benchmark system likely to be introduced soon, the lending rates would become more transparent and competitive. This would make the banks lend at lower rates with lesser margin over the cost of funds.
Global investment banker, Goldman Sachs, said that in its second quarter review statement the central bank, in fact, has reversed its priorities from the first quarter review statement made in July, when reviving the growth was the first priority.
The governor, however, maintained that inflationary pressure is mainly coming from the rise in prices of food articles due to supply constraints, which cannot be influenced much by monetary policy. But, in its policy statement, the central bank said, ``Even though the current inflationary pressure are driven by food prices, they can strengthen expectations of higher inflations and lead to generalized inflation.''
The governor also expressed his concern over rising asset prices, which could be because of surplus liquidity in the system. In the statement, he said, ``There is already some evidence of excess liquidity feeding through asset prices with potential financial stability concerns. In this background, bankers feel that the central bank will soon resort to tightening of liquidity condition. The Nomura securities said that the central bank might increase CRR to mop up surplus liquidity by December 2009.
Therefore, the second quarter review, bankers felt, is in the direction to build a ground to pursue tight money policy in time to come.
Sources: Times of India
Prabhakar Sinha , TNN 28 October 2009, 01:52am IST
Interest rates are likely to start rising soon. This was clearly indicated by the second quarter review of the monetary policy, 2009-10, unveiled by RBI governor D Subbarao on Tuesday. Releasing the review, the governor said that in the light of mounting inflationary pressure, which is projected to touch 6.5% by March 2010, the monetary policy's first priority would be to contain the inflationary expectation.
The RBI left all major policy rates like repo and reverse repo rates — the rates at which it lends to and accepts money from banks respectively — and cash reserve ratio (CRR) — the percentage of deposits banks are supposed to keep with the central bank — unchanged. But it took the first step towards rolling back its easy money policies, pursued for the past year to counter the economic slowdown. It terminated special liquidity facilities like credit refinance limits extended to banks against the loans given to exporters and mutual fund companies ahead of the original March 31, 2010 expiry date.
The central bank also reversed its earlier decision to reduce the minimum required investment by banks in government securities from 25% to 24% of deposits. The statutory liquidity ratio is now once again 25%. As most banks have already invested more than 25% in government securities, this decision will not have an immediate impact on the availability of funds, but these measures clearly indicate the RBI's intent to discontinue the accommodative monetary policy.
Responding to the measures, finance minister Pranab Mukherjee said that the RBI's assessment, on the whole, is in conformity with the government's thinking on both fiscal policy and monetary policy. However, he said the government would continue with the stimulus packages till the economy is back on a firm recovery path. Mukherjee also disagreed with RBI's projection of 6% economic growth with an upward bias for 2009-10. He said he would prefer to go with the growth projection of 6.5% to 6.75% given by the prime minister's economic advisory council in its mid-year review.
In the light of inflation rising to 6.5% by March 2010, the central bank will be left with little choice but to raise the policy rates. With the rise in the inflation, the net interest rates of all the policy instruments will become negative. In that situation, Subbarao said, the central bank will use its monetary policy rates to anchor the inflationary expectations in the country. Keeping this in mind only, he said, the money supply target has been reduced by one percentage point to 17%. However, he was quick to add that exit of the easy money policy will be calibrated in such a fashion that while the recovery process is not hampered, inflation expectations remain anchored.
He further hoped that with the new prime lending benchmark system likely to be introduced soon, the lending rates would become more transparent and competitive. This would make the banks lend at lower rates with lesser margin over the cost of funds.
Global investment banker, Goldman Sachs, said that in its second quarter review statement the central bank, in fact, has reversed its priorities from the first quarter review statement made in July, when reviving the growth was the first priority.
The governor, however, maintained that inflationary pressure is mainly coming from the rise in prices of food articles due to supply constraints, which cannot be influenced much by monetary policy. But, in its policy statement, the central bank said, ``Even though the current inflationary pressure are driven by food prices, they can strengthen expectations of higher inflations and lead to generalized inflation.''
The governor also expressed his concern over rising asset prices, which could be because of surplus liquidity in the system. In the statement, he said, ``There is already some evidence of excess liquidity feeding through asset prices with potential financial stability concerns. In this background, bankers feel that the central bank will soon resort to tightening of liquidity condition. The Nomura securities said that the central bank might increase CRR to mop up surplus liquidity by December 2009.
Therefore, the second quarter review, bankers felt, is in the direction to build a ground to pursue tight money policy in time to come.
Sources: Times of India
Monday 26 October 2009
Thursday 15 October 2009
Friday 9 October 2009
Plan for a steady source of income
Plan for a steady source of income
By: Neeti Trivedi, ET Bureau
The economy is showing signs of a turn around and the worst may be behind us, but it is not too distant in the past that we heard of pay cuts and pink slips every other day. The loss of active income source or reduction in the monthly take-home was coupled with burgeoning costs of daily necessities .
It is in such tough times that one realises the importance of having a passive source of regular income. Gone are the days when only retirees would need a steady source of passive income. Individuals today are increasingly looking for options to supplement their active income by passive incomes such as rent, interest and dividend income.
Debt investments or fixed income instruments are the key sources of generating a regular income. Coupled with the fact that debt offers diversification and safety of capital, it proves to be an excellent case for investments . There are also a couple of other options from the mutual funds stable which can provide a regular source of income.
Here are some of the options available for a steady passive income:
Post office monthly income plan (POMIS)
The post office monthly income plan (POMIS) offers a fixed monthly return in the form of interest and you can deposit a maximum of Rs 4.5 lakhs and Rs 9 lakhs for single and joint accounts respectively.
The POMIS earns interest at eight percent per annum and though there are no tax benefits and interest is taxable , no tax is deducted at source on the interest.
The tenure is fixed for six years and there is a five percent payout in the form of bonus on maturity.
The POMIS can act as a safe source of additional monthly cash flow which can be either used to meet expenses or ploughed back into investments, depending on the situation.
The post office monthly income plan (POMIS) offers a fixed monthly return in the form of interest and you can deposit a maximum of Rs 4.5 lakhs and Rs 9 lakhs for single and joint accounts respectively.
The POMIS earns interest at eight percent per annum and though there are no tax benefits and interest is taxable , no tax is deducted at source on the interest.
The tenure is fixed for six years and there is a five percent payout in the form of bonus on maturity.
The POMIS can act as a safe source of additional monthly cash flow which can be either used to meet expenses or ploughed back into investments, depending on the situation.
Bank fixed deposit
Instead of opting for a cumulative deposit, you can opt for the monthly or quarterly interest payment facility .
Bank deposits are extremely low risk and offer good flexibility in terms of tenure, but there are no tax benefits (except five year deposits that qualify under Section 80C).
The interest rates are governed by the ongoing interest rates in the economy.
Corporate fixed deposit
Companies offer fixed deposits which usually provide a higher rate than bank fixed deposits, the reason being that they are unsecured and hence the risk is higher.
There are different options for payment of interest (monthly, quarterly etc) which can provide a regular source of income.
It is prudent to invest only in deposits of reputed companies with a superior credit rating.
Debt mutual funds
There are a wide variety of debt mutual funds such as liquid funds, short-term debt funds, income funds, and gilt funds.
These are distinguished by type, credit quality, nature of securities they invest in and length of maturity of the securities. These funds come with a dividend payout option which can be weekly, monthly or quarterly.
A portion of the total debt in your overall asset allocation can be invested in these funds to serve the dual purpose of allocation to debt as well as earning regular income.
However, you should be diligent to select the right fund based on the credit quality, average maturity of the securities and interest rate environment .
Monthly income plans of mutual funds
The monthly income plans (MIPs) usually invest 15-30 percent of the corpus in equity and the remaining in debt.
These plans have an option of monthly or quarterly dividend payment, though not assured.
With the markets gaining some momentum, these plans are back on track with respect to dividend payments.
Systematic withdrawal plans of mutual funds
A lump sum investment in a fund entitles you to withdraw regular amounts monthly or quarterly.
The returns are not assured and there may a risk of withdrawing capital itself if withdrawals exceed the returns. But it is tax-efficient as the returns are treated as capital gains.
There are other incomegenerating options such as Senior Citizens' Savings Scheme and annuities from insurance companies but these are more relevant after retirement.
While one must opt for growth of capital in the early stages of life, building up a stream of income which is not dependant on job, profession or business is equally important to provide for a rainy day.
SOURCES: THE ECONOMIC TIMES
By: Neeti Trivedi, ET Bureau
The economy is showing signs of a turn around and the worst may be behind us, but it is not too distant in the past that we heard of pay cuts and pink slips every other day. The loss of active income source or reduction in the monthly take-home was coupled with burgeoning costs of daily necessities .
It is in such tough times that one realises the importance of having a passive source of regular income. Gone are the days when only retirees would need a steady source of passive income. Individuals today are increasingly looking for options to supplement their active income by passive incomes such as rent, interest and dividend income.
Debt investments or fixed income instruments are the key sources of generating a regular income. Coupled with the fact that debt offers diversification and safety of capital, it proves to be an excellent case for investments . There are also a couple of other options from the mutual funds stable which can provide a regular source of income.
Here are some of the options available for a steady passive income:
Post office monthly income plan (POMIS)
The post office monthly income plan (POMIS) offers a fixed monthly return in the form of interest and you can deposit a maximum of Rs 4.5 lakhs and Rs 9 lakhs for single and joint accounts respectively.
The POMIS earns interest at eight percent per annum and though there are no tax benefits and interest is taxable , no tax is deducted at source on the interest.
The tenure is fixed for six years and there is a five percent payout in the form of bonus on maturity.
The POMIS can act as a safe source of additional monthly cash flow which can be either used to meet expenses or ploughed back into investments, depending on the situation.
The post office monthly income plan (POMIS) offers a fixed monthly return in the form of interest and you can deposit a maximum of Rs 4.5 lakhs and Rs 9 lakhs for single and joint accounts respectively.
The POMIS earns interest at eight percent per annum and though there are no tax benefits and interest is taxable , no tax is deducted at source on the interest.
The tenure is fixed for six years and there is a five percent payout in the form of bonus on maturity.
The POMIS can act as a safe source of additional monthly cash flow which can be either used to meet expenses or ploughed back into investments, depending on the situation.
Bank fixed deposit
Instead of opting for a cumulative deposit, you can opt for the monthly or quarterly interest payment facility .
Bank deposits are extremely low risk and offer good flexibility in terms of tenure, but there are no tax benefits (except five year deposits that qualify under Section 80C).
The interest rates are governed by the ongoing interest rates in the economy.
Corporate fixed deposit
Companies offer fixed deposits which usually provide a higher rate than bank fixed deposits, the reason being that they are unsecured and hence the risk is higher.
There are different options for payment of interest (monthly, quarterly etc) which can provide a regular source of income.
It is prudent to invest only in deposits of reputed companies with a superior credit rating.
Debt mutual funds
There are a wide variety of debt mutual funds such as liquid funds, short-term debt funds, income funds, and gilt funds.
These are distinguished by type, credit quality, nature of securities they invest in and length of maturity of the securities. These funds come with a dividend payout option which can be weekly, monthly or quarterly.
A portion of the total debt in your overall asset allocation can be invested in these funds to serve the dual purpose of allocation to debt as well as earning regular income.
However, you should be diligent to select the right fund based on the credit quality, average maturity of the securities and interest rate environment .
Monthly income plans of mutual funds
The monthly income plans (MIPs) usually invest 15-30 percent of the corpus in equity and the remaining in debt.
These plans have an option of monthly or quarterly dividend payment, though not assured.
With the markets gaining some momentum, these plans are back on track with respect to dividend payments.
Systematic withdrawal plans of mutual funds
A lump sum investment in a fund entitles you to withdraw regular amounts monthly or quarterly.
The returns are not assured and there may a risk of withdrawing capital itself if withdrawals exceed the returns. But it is tax-efficient as the returns are treated as capital gains.
There are other incomegenerating options such as Senior Citizens' Savings Scheme and annuities from insurance companies but these are more relevant after retirement.
While one must opt for growth of capital in the early stages of life, building up a stream of income which is not dependant on job, profession or business is equally important to provide for a rainy day.
SOURCES: THE ECONOMIC TIMES
Tuesday 6 October 2009
Some investment avenues for the NRI in India
Some investment avenues for the NRI in India
Citizens of India who have the NRI status (Non-Resident Indian) can invest in India in almost all avenues that are open to a citizen with
Resident Status. However, there may be some limitations or requirement for approval when investing in certain avenues. This article will analyse the options for NRI investments in brief.
Basic Requirements
As an NRI there are a few additional requirements in the form of documentation that a citizen has to comply with while investing in India. As any other citizen, documents such as a PAN card, ID Proof and Address Proof (the passport will suffice to be the single document for both), a KYC certificate (Know-Your-Client Certificate) for Mutual Fund investment above Rs.50,000/- and Passport size Photographs are required.
Apart from this an NRE (Non-Resident External Account - Dollar Account), and / or an NRO (Non-Resident Ordinary Account - Rupee Account) is/are required. The difference between these accounts is that the investments made and the returns got from those investments, using the NRE account can be repatriated to other countries.
Investment in Mutual Funds
NRIs can directly invest in any mutual fund from their NRE/NRO account. For investment above Rs.50,000/- the KYC documentation is required. Investment can be in any mode - only once, regular (monthly (SIP), quarterly, etc). The NRI investment returns in Mutual funds can fully be repatriated.
To make the investment the KYC forms given at any of the "Service Points" listed on the AMFI website. This will take about 4 days. A letter is sent back to the address for communication stating that the investor is verified. A copy of this letter has to be attached will all the mutual fund investment / withdrawals above Rs.50,000/-.
The investments will require forms to be signed but can be downloaded from any of the respective Asset Management Company (Mutual Fund) websites. So the NRI could sign, fill and have the forms sent directly to the Mutual Fund Company or to a relative / friend / financial advisor who could then give it to the Fund Office.
Investment in Shares
NRIs can invest in shares using a Demat (Dematerialised Format) account. However RBI approval has to be got for each transaction. This is a cumbersome process unless the investment is large (>Rs.1 crore) and/or to acquire significant stock holding in a company. The better way is thus to use the mutual fund route for exposure to the stock market.
Investment in Real Estate
Investment in land and buildings (housing and commercial) can be done by NRIs with the same rules as for the Resident Indians. However since buying land is a long drawn process, giving a Power of Attorney to a close relative (normally the parents) for executing the purchase / sale process may be advisable.
One limitation to the investment in real estate is that only the original money invested in the land can be repatriated even if invested from the NRE account. For example if Rs.50,00,000/- was invested in a house and it was sold after 4 years for Rs.1 crore, the capital gain of Rs.50 lakhs will need to be taxed and reinvested in India itself. Only the initial investment of Rs.50 lakhs can be taken back out of the country by the NRI (if the investment was made from the NRE account).
Investment in Gold and Jewellery
Here again the investment is as per the norms for normal resident Indians. A point to note for even the resident Indians is that gains made from buying and selling gold and gold jewellery is subject to capital gains tax. So keep the receipts safely while making gold purchases.
Becoming a Partner in a Business
Here again approval from RBI has to be sought as becoming a partner is akin to buying shares in the business.
Bank Fixed Deposits
An NRI can invest in all the bank deposits. The interest is taxable and is generally subject to TDS unless a request from for not deducting tax at source is submitted.
Postal Deposits
Most or all of the postal deposits are out of bounds for the NRI. They cannot invest in the National Savings scheme, Kisan Vikas Patra, Monthly Income Scheme nor the Public Provident Fund. Typically these schemes are coming under the Small Savings Schemes and the NRIs are expected to save BIG!!!!.
However schemes that were started before one becomes an NRI can be continued till the end of the scheme. They cannot be renewed at the end of the term if the NRI status continues at that time.
Summary
This article is a primer which covers most of the common investment avenues and their investability for NRIs. All avenues but for direct investment in shares and being a business partner (which require approval for each investment); and the postal deposits (which clearly does not permit) are open for an NRI to invest based on their needs.
Source: BankBazaar.com - An online marketplace for your personal loan and home loan needs.
SOURCE: THE ECONOMIC TIMES
Citizens of India who have the NRI status (Non-Resident Indian) can invest in India in almost all avenues that are open to a citizen with
Resident Status. However, there may be some limitations or requirement for approval when investing in certain avenues. This article will analyse the options for NRI investments in brief.
Basic Requirements
As an NRI there are a few additional requirements in the form of documentation that a citizen has to comply with while investing in India. As any other citizen, documents such as a PAN card, ID Proof and Address Proof (the passport will suffice to be the single document for both), a KYC certificate (Know-Your-Client Certificate) for Mutual Fund investment above Rs.50,000/- and Passport size Photographs are required.
Apart from this an NRE (Non-Resident External Account - Dollar Account), and / or an NRO (Non-Resident Ordinary Account - Rupee Account) is/are required. The difference between these accounts is that the investments made and the returns got from those investments, using the NRE account can be repatriated to other countries.
Investment in Mutual Funds
NRIs can directly invest in any mutual fund from their NRE/NRO account. For investment above Rs.50,000/- the KYC documentation is required. Investment can be in any mode - only once, regular (monthly (SIP), quarterly, etc). The NRI investment returns in Mutual funds can fully be repatriated.
To make the investment the KYC forms given at any of the "Service Points" listed on the AMFI website. This will take about 4 days. A letter is sent back to the address for communication stating that the investor is verified. A copy of this letter has to be attached will all the mutual fund investment / withdrawals above Rs.50,000/-.
The investments will require forms to be signed but can be downloaded from any of the respective Asset Management Company (Mutual Fund) websites. So the NRI could sign, fill and have the forms sent directly to the Mutual Fund Company or to a relative / friend / financial advisor who could then give it to the Fund Office.
Investment in Shares
NRIs can invest in shares using a Demat (Dematerialised Format) account. However RBI approval has to be got for each transaction. This is a cumbersome process unless the investment is large (>Rs.1 crore) and/or to acquire significant stock holding in a company. The better way is thus to use the mutual fund route for exposure to the stock market.
Investment in Real Estate
Investment in land and buildings (housing and commercial) can be done by NRIs with the same rules as for the Resident Indians. However since buying land is a long drawn process, giving a Power of Attorney to a close relative (normally the parents) for executing the purchase / sale process may be advisable.
One limitation to the investment in real estate is that only the original money invested in the land can be repatriated even if invested from the NRE account. For example if Rs.50,00,000/- was invested in a house and it was sold after 4 years for Rs.1 crore, the capital gain of Rs.50 lakhs will need to be taxed and reinvested in India itself. Only the initial investment of Rs.50 lakhs can be taken back out of the country by the NRI (if the investment was made from the NRE account).
Investment in Gold and Jewellery
Here again the investment is as per the norms for normal resident Indians. A point to note for even the resident Indians is that gains made from buying and selling gold and gold jewellery is subject to capital gains tax. So keep the receipts safely while making gold purchases.
Becoming a Partner in a Business
Here again approval from RBI has to be sought as becoming a partner is akin to buying shares in the business.
Bank Fixed Deposits
An NRI can invest in all the bank deposits. The interest is taxable and is generally subject to TDS unless a request from for not deducting tax at source is submitted.
Postal Deposits
Most or all of the postal deposits are out of bounds for the NRI. They cannot invest in the National Savings scheme, Kisan Vikas Patra, Monthly Income Scheme nor the Public Provident Fund. Typically these schemes are coming under the Small Savings Schemes and the NRIs are expected to save BIG!!!!.
However schemes that were started before one becomes an NRI can be continued till the end of the scheme. They cannot be renewed at the end of the term if the NRI status continues at that time.
Summary
This article is a primer which covers most of the common investment avenues and their investability for NRIs. All avenues but for direct investment in shares and being a business partner (which require approval for each investment); and the postal deposits (which clearly does not permit) are open for an NRI to invest based on their needs.
Source: BankBazaar.com - An online marketplace for your personal loan and home loan needs.
SOURCE: THE ECONOMIC TIMES
Get Term Insurance at best terms
Get Term Insurance at best terms
Investor's Guide has always advised to readers to buy at least one insurance policy. Life is full of uncertainties and risks. So an insurance
policy is a must.
The primary objective of an insurance policy is to secure the needs of one's family in an unfortunate event of death of the policyholder. So the amount received has to be big enough to enable the dependents to maintain their lifestyle.
WHY TERM PLANS?
The rule of thumb in financial planning says that life cover should be worth 6-7 times of your current annual income. If your current annual income is 5 lakh then the insurance policy should provide a cover of Rs 30 lakh. This calls for a pure-risk policy, which offers an extensive cover at minimal cost. Hybrid investment products, with moiney back option cost several times more for the same amount of risk cover. A term plan is the best option when the purpose is life cover.
WHICH TERM PLAN?
The next question is which policy. The first name that comes to mind is LIC. The state-run Life Insurance Corporation of India is the oldest and largest insurer in the country and all its liabilities carry an implicit government backing. But then, there are equally credible players in the private sector. There's no harm in shopping around for the best plan available in the market.
While selecting a term policy, one should consider the cost (the amount of premium), the maximum term offered, the additional benefit in terms of different riders and the additional cost to avail these riders.
ETIG's analysis of policies offered by LIC and major private players suggests the policies offered by LIC are costlier. LIC loses against its private counterparts on account of high premium, no discount on premium paid and lack of riders. LIC's Anmol Jeevan and Amulya Jeevan are just plain vanilla traditional term insurance policies.
As it is commonly known, term plans simply cover the life of the policyholder and do not provide any maturity or survival benefits. The amount of life cover (sum assured) is payable only to the nominee in case of unfortunate demise of the insured during the policy term. Where the insurer survives the policy term, he/she is not entitled to any benefits from the insurance company. The premiums paid throughout the policy term may thus be treated as a cost to cover one's life. So it is better to minimise the cost.
LIC charges an annual premium of Rs 9,500 for Rs 25 lakh policy from a 30-year-old person while private players like SBI life, HDFC Standard Life etc, offer similar cover for an annual premium in the range of Rs 6,200-7,500. (See the table.)
Private players also offer rebate on premium for female policyholders or for high sum assured. LIC do not discriminate on this count. It has a single premium for all of age groups.
The pure term plan in its traditional form offers the benefits only in cases of natural death; the policy is considered null and void if the death is accidental or due to some critical illness, etc. This is one of the major reasons for it being unpopular amongst people.
Private insurers address this limitation by offering riders, or additional benefit, along with the policy for an additional fee.
The common riders available are accidental death benefit, critical illness benefit, accidental disability/dismemberment benefit, hospital cash benefit, etc. LIC in contrast only offers traditional products without any rider.
Despite these better offers from private insurance companies, there is higher demand for LIC's products. It is largely because hassle-free settlement of claims after the unfortunate event of death of the insured, which is very important. It is a fact that LIC has the highest claim ratio over 95% (that is 95 out of 100 claims are settled successfully) for the year ended March 08, which is very much in line with its historical record. Nevertheless, major private players have the claim ratio higher than the industry average, which is noteworthy.
CONCLUSION
The moral of the story is that one needs to do a cost benefit analysis before buying life insurance policies and not to go with the tag as the 'market leader' or the 'oldest player'.
SOURCE: THE ECONOMIC TIMES
Investor's Guide has always advised to readers to buy at least one insurance policy. Life is full of uncertainties and risks. So an insurance
policy is a must.
The primary objective of an insurance policy is to secure the needs of one's family in an unfortunate event of death of the policyholder. So the amount received has to be big enough to enable the dependents to maintain their lifestyle.
WHY TERM PLANS?
The rule of thumb in financial planning says that life cover should be worth 6-7 times of your current annual income. If your current annual income is 5 lakh then the insurance policy should provide a cover of Rs 30 lakh. This calls for a pure-risk policy, which offers an extensive cover at minimal cost. Hybrid investment products, with moiney back option cost several times more for the same amount of risk cover. A term plan is the best option when the purpose is life cover.
WHICH TERM PLAN?
The next question is which policy. The first name that comes to mind is LIC. The state-run Life Insurance Corporation of India is the oldest and largest insurer in the country and all its liabilities carry an implicit government backing. But then, there are equally credible players in the private sector. There's no harm in shopping around for the best plan available in the market.
While selecting a term policy, one should consider the cost (the amount of premium), the maximum term offered, the additional benefit in terms of different riders and the additional cost to avail these riders.
ETIG's analysis of policies offered by LIC and major private players suggests the policies offered by LIC are costlier. LIC loses against its private counterparts on account of high premium, no discount on premium paid and lack of riders. LIC's Anmol Jeevan and Amulya Jeevan are just plain vanilla traditional term insurance policies.
As it is commonly known, term plans simply cover the life of the policyholder and do not provide any maturity or survival benefits. The amount of life cover (sum assured) is payable only to the nominee in case of unfortunate demise of the insured during the policy term. Where the insurer survives the policy term, he/she is not entitled to any benefits from the insurance company. The premiums paid throughout the policy term may thus be treated as a cost to cover one's life. So it is better to minimise the cost.
LIC charges an annual premium of Rs 9,500 for Rs 25 lakh policy from a 30-year-old person while private players like SBI life, HDFC Standard Life etc, offer similar cover for an annual premium in the range of Rs 6,200-7,500. (See the table.)
Private players also offer rebate on premium for female policyholders or for high sum assured. LIC do not discriminate on this count. It has a single premium for all of age groups.
The pure term plan in its traditional form offers the benefits only in cases of natural death; the policy is considered null and void if the death is accidental or due to some critical illness, etc. This is one of the major reasons for it being unpopular amongst people.
Private insurers address this limitation by offering riders, or additional benefit, along with the policy for an additional fee.
The common riders available are accidental death benefit, critical illness benefit, accidental disability/dismemberment benefit, hospital cash benefit, etc. LIC in contrast only offers traditional products without any rider.
Despite these better offers from private insurance companies, there is higher demand for LIC's products. It is largely because hassle-free settlement of claims after the unfortunate event of death of the insured, which is very important. It is a fact that LIC has the highest claim ratio over 95% (that is 95 out of 100 claims are settled successfully) for the year ended March 08, which is very much in line with its historical record. Nevertheless, major private players have the claim ratio higher than the industry average, which is noteworthy.
CONCLUSION
The moral of the story is that one needs to do a cost benefit analysis before buying life insurance policies and not to go with the tag as the 'market leader' or the 'oldest player'.
SOURCE: THE ECONOMIC TIMES
Monday 5 October 2009
Sunday 4 October 2009
Saturday 3 October 2009
2nd October-Gandhi Jayanti, International Non-Violence Day 1,460 STUDENTS TOOK THE PLEDGE TO WORK FOR NON-VIOLENCE
2nd October-Gandhi Jayanti, International Non-Violence Day
1,460 STUDENTS TOOK THE PLEDGE TO WORK FOR NON-VIOLENCE
About 1,460 NSS Students from 76 colleges of University of took the pledge to work for peace and non-violence on the occasion of International Non-Violence Day
“I shall endeavor to resolve all differences through dialogue and constitutional means and I shall strive to establish WORLD-PEACE…”, about 1,460 students of N.S.S. Unit, from 76 colleges of University of Mumbai joined hands with the millions of people all over the world and took the PLEDGE on 2nd October - International Non-Violence Day.
To commemorate 140th Birth Anniversary of Mahatma Gandhi and the International Non-Violence Day as declared by United Nations, Bombay Sarvodaya Mandal, N.S.S. Unit of University of Mumbai and World March for Peace and Non-Violence had jointly organized the mega event at Convocation Hall, University of Mumbai, Fort Campus.
The main theme of this programme was to raise awareness of non-violence, tolerance, full respect for all human rights and fundamental freedoms for all, democracy, development, mutual understanding and respect of diversity among the young generation.
Students carrying play-cards and banners depicting slogans like ‘No More Violence, Peace is our Mission’ marched from Churchgate & CST stations and gathered at the Convocation Hall, University of Mumbai, Fort Campus.
The Programme started with Gandhi bhajans & peace songs followed by the speeches of Dr. Chandra Krishnamurthy, Hon. Ag. Vice Chancellor & Prin. K. Venkatramani, Registrar of University of Mumbai. All the invitees emphasized students for promoting peace, truth and non-violence which is the need of the hour. The programme ends with the Pledge to work for peace & non-violence taken by the entire gathering which was administrated by Dr. P. N. Pabrekar, SLO, NSS Cell, Government of Maharashtra and with National Anthem.
Friday 2 October 2009
Celebrating 140th birth anniversary of Mahatma Gandhi & International Non-Violence Day
Celebrating 140th birth anniversary of
Mahatma Gandhi &
International Non-Violence Day
Mahatma Gandhi &
International Non-Violence Day
Sunday 20 September 2009
Saturday 19 September 2009
Plenty of entertainment; What’s on, what’s off during Eid
Entertainment
Entertainment City: The Kuwait Entertain-ment City — offering exciting and entertainment games and activities — will be a dream land to celebrate the Eid Al-Fitr holidays. The city will be open from 4:00 pm until 12 midnight during Eid holidays. The entry fee is KD 3.
Don’t miss to visit the different ‘world’s’ at the city. The Arab world includes the Gulf Sailing Boats, Sinbad the sailor and others. International world includes The African Boat Ride, The Australian Gondola, The European Cars, The Cowboys Arena, etc. The Future world offers thrilling rides that portray scientific advancements and the civilizations of the future.
For more information contact: 24879455.
The Khairan Resort: Children along with their families will love every moment in this fascinating resort that is full of fun activities. From video games, play grounds, fancy bicycles for hire, restaurants, tennis courts to a whole lot of other entertaining activities for children. For more information contact: 25742664.
Kuwait Zoo: Enjoy the amazing collection of rare and exotic animals from all over the world at the Kuwait Zoo. For children it is a matter of both education and fun to visit the new dapper zoo. Don’t go for a visit too late because the animals section of the zoo will be closed by 6:00 pm. For more information contact: 24733389.
Ice Skating Rink: For children and adults it is time to put on your skating shoes and set the ice on fire at the Ice Skating Rink. However remember not to go too early on Eid days, as the rink will open only at 10:30 am. On other days the rink will open on schedule — 8:30 am to 10:00 pm. For more details contact: 22411151.
Green Island: When you go for sightseeing in Kuwait, the place that you must visit for your relaxation is the Green Island in Kuwait. However during Eid Holidays the Island will become live with loads of concerts and theater shows. Children’s programs include joyrides and boat rides to satisfy the young children along with live musicals by a variety of bands for maximum fun and joy. The island is open from 8:30 am to midnight. Call 22526153 for more information.
The Scientific Center: On the First Day of Eid Al Fitr, the largest IMAX screen in Kuwait at The Scientific Center will premiere its latest 3D film ‘Under the Sea’. The film is directed by Award-winning documentary filmmaker Howard Hall and the production team behind IMAX® film favorites ‘Deep Sea 3D’ and ‘Into the Deep 3D’.
Unlike any other, this new film will transport audiences to some of the most exotic and isolated undersea locations on Earth, including Southern Australia and the Great Barrier Reef, as well as Papua New Guinea and Indonesia in the famed Coral Triangle, for face-to-face encounters with some of the most mysterious and stunning creatures of the sea.
Narrated by Jim Carrey, ‘Under the Sea 3D’ offers an inspirational and entertaining way to explore the unique beauty of this rarely seen realm, and an awareness of the impact that global climate change is having on the oceanic wilderness.
In addition to that the Scientific Center will host the “Hope you are a winner” show on Kuwait Radio 5:40 am during all three days of Eid from 6:00 to 8:00 pm. They will have contests and give away prizes.
Opening hours for Eid are from 2:00 pm to 12:00 midnight on first day of Eid, 9:00 am to midnight on second day of Eid and until Sept 25, 2009. For more information contact: 22240025.
All the cinemas over the country will open again from the first day of Eid with shows both in the morning and evening.
Failaka Island: The ferry to Failaka Island will operate on all days of the week departing from Salmiya in the morning. The return trip from Failaka Island will begin in the afternoon, arriving at mainland latest by 6:00 pm. The duration of the trip one way is one-and-half hours. The duration stay at the Island is three hours during Eid.
Bookings are open up to half an hour prior to the departure time at KPTC office in Ras Salmiya (behind Showbiz), where the dock is also situated. For more information call 25742664.
Hotels
Courtyard by Marriott: Eid at Marriott will be unique as usual with its lavish buffets and brunches that take place throughout the year. However Eid here is special at three of Courtyard’s exceptional restaurants.
The Atrium will see a rich lunch and dinner buffet featuring live cooking stations, international and Arabic specialties and succulent desserts. Il Forno, the Italian restaurant, will be having a fantastic menu that will certainly delight the most demanding appetite. For more information contact: 22997000.
Hilton Resort Kuwait: Hilton will be having special lunch and dinner buffets at Teatro and Blue Elephant, the Thai restaurant. The dinner will start at 7 pm and go past midnight. For more information contact: 23725500.
Crowne Plaza: The hotel has decided to go the gastronomic route all the way: Special open buffets at Al Ahmadi restaurant for KD 12.950 per person along with three days of live Arabic band along with and Egyptian singer will be playing at the restaurant from the first day of Eid.
Noukhaza, sea-food restaurant, will have lunch and dinner buffets, costing KD 13.950 per person.
Ayam Zaman, Lebanese restaurant KD 9.950.
Fauchon, the French restaurant, has set menu costing KD 8.
At the Iranian restaurant, Shabistan, the a-la-carte menu is KD 10.950 per person, where you can order as much as you want. All prices include 15 per cent service charge. For more information contact: 24742000.
Radisson SAS: The hotel will run a special Eid dinner buffet at Al Bustan costing KD 15 per head. Timings are from 9 pm to 2 am. Special prices are available for children. For more information contact: 25756000.
JW Marriott: The hotel has much to offer with its oriental and international buffets along with its mouthwatering desserts. There is La Brasserie fro international specialties and Terrace Grill restaurant for some of the best Angus beef in town in its well refined environment. Japanese food lovers will enjoy Kei’s traditional Sushi, Tepenyaki and Sashimi. For more information contact: 22455550.
Shopping Centers: Shopping centers such as Sultan Center, City Center, Marina Mall, and Avenues Mall among others will be open throughout the holidays in addition to all cooperatives.
Embassies: The Eid holiday schedules of various foreign embassies in Kuwait are as follows. The embassies of Spain and Pakistan will be closed starting from Sept 20, Sunday, through Sept 22, Tuesday. The American and British Embassy will be closed on Sunday, Sept 20 and Monday Sept 21. The Indian embassy will be closed on Monday while the Bangladesh embassy will remain closed from Friday, Sept 18 to Saturday, Sept 26.
Post Offices: There will be no telegram facilities at the General Post Office at Salmiya, Hawalli, Shuwaikh, Jleeb, Jahra, Ahmadi and Fahaheel post offices on the first two days of Eid.
Banks: Banks will be closed throughout the following week starting Sunday, 20th. Work will start back on Sunday, Sept 27.
Weather Forecast on Eid day: Saturday will see Easterly wind with a speed around 21-25 km/h. Saturday will record the highest temperature of 40 degrees Celsius, and the lowest of 28 degrees C. Sunday will see mercury peaking at 42 degrees C, and lowest temperature of 27 degrees C with Westerly wind at 10 km/h and Easterly wind in the evening at 14 km/h. Monday will see the temperature peak 41 degrees C, with lowest reading of 29 degrees C with North Easterly wind of 21 km/h.
Sources: ARAB TIMES
By Rena Sadeghi
Arab Times Staff
All about Bhavishya Nirman bonds
Looking for an investment option that offers the safety and liquidity of fixed deposits but attractive rates of interest? Want an investment option that offers you a constant rate of interest? If that is what you are looking for, then answer to your prayers is Bhavishya Nirman Bonds.
Welcome to BNBs: BNBs are bonds issued by NABARD. They are basically zero coupon bonds, meaning you don't get any interest on them. Why BNBs? BNBs offer you far higher safety than any bank FD. Besides unlike FD, whose rate of interest varies as per the market situation, BNBs have managed to offer lucrative returns. This despite the low interest rates prevailing in the market.
Working of BNB: A BNB is actually a zero coupon bond, with a holding period of 10 years. As it is zero coupon, you don't earn any interest on it. However the bonds are sold at a discount to the face value. So the difference between the selling price and face value is the return you get.
E.g. if the bond's selling price is Rs 8,500 and the face value is Rs 20,000, it means, by making a nominal investment of Rs 8,500, you get a sum of Rs 20,000 at the end of 10 years. So the face value here is the maturity value of the bond.
Here your return is Rs 11,500 (Rs 20,000 - Rs 8,500). As the period of 10 years acts like a lock-in period, these bonds are listed on BSE in order to make them liquid.
Purchasing BNBs: BNBs can be purchased directly from NABARD or through the financial agencies that act as intermediaries for NABARD.
Holding BNBs: You can hold BNBs either in physical or in dematerialized form. In physical form, they are treated as negotiable instruments that can be transferred by endorsement and delivered by the holder. So in order to safeguard your bonds, it is always advisable to hold them in dematerialized form. Besides to sell the bonds, you must always hold the bonds in demat form.
Tax treatment: The disparity between the selling price and face value would attract capital gains tax. You have the choice of paying capital gains tax at 10 per cent on the disparity between the face value and the selling price or at 20 per cent on the disparity between the face value and the indexed issue price. TDS is not applicable here.
Rate of return: The rate of return on BNB is 8.93 per cent and is taxable. Post-tax yield is 8.29 per cent. It is a good investment option for those falling in higher tax brackets. But for those in lower tax brackets, bank FD is a better bet.
Warning: In the NABARD advertisements, you are given a simple interest rate of 12.18 per cent pa on these bonds. But this is highly misleading, as the effective yield is always compounded. It is 8.29 per cent, making it very attractive to long-term investors.
Bhavishya Nirman Bonds are zero coupon bonds with a period of 10 years. They are traded on BSE and are sold at the price that is lesser than the face value. They don't earn any interest, but as they are sold at discount to the maturity value, the difference between the two prices is your return. This return is taxable, and so is advisable for investors in higher tax bracket.
Sunday 16 August 2009
Monday 10 August 2009
PRAISE … DOUBTS ON RESIDENCE TRANSFERS; 3 years voids sponsor grip
KUWAIT CITY, Aug 9: A large number of expatriate workers and ‘mandoubs’ (representatives of companies) visited labor offices in the six governorates early morning Sunday — the first day of implementing the decision of Social Affairs and Labor Minister Mohammad Al-Afasi to allow expatriate workers to transfer their residence permits to another sponsor without approval of the current sponsors. Such transfers will, however, be allowed once the expatriates have completed three years with their current sponsors. With a cheerful demeanor, most of the expatriate workers, who visited the labor offices, could not believe that the decision has finally been implemented, so they sought clarifications from the concerned officials and employees at the labor offices. For these workers, the decision marks their victory in the seemingly unending fight for their rights, hoping it would solve some of their financial, social and psychological problems, especially the victims of visa trading and abusive acts of some ‘mandoubs’.
Speaking to the Arab Times, some ‘mandoubs’, who were at the Labor Office in the Capital Governorate, expressed their reservations on the decision which, they opined, is a temporary solution and will only lead to many other problems in the future. Others regard the decision as an insult to the rights of employers, who hired workers from abroad and trained these workers only for the benefit of another employer. On the other hand, some citizens expressed their full support to the decision, asserting it will improve the image of Kuwait and dispel accusations on the country’s alleged involvement in labor malpractices and human trafficking.Meanwhile, expatriate workers, who visited the Labor Office in Farwaniya, stated the decision is courageous and historical. They look forward to the cancellation of the ‘kafil’ (sponsorship) system, which is important in organizing the labor market, enhancing the skills of workers, and releasing them from the claws of abusive ‘mandoufs’. They think the decision will protect them as the employers could no longer threat to fire them every time they air their grievances or demand privileges, such as salary increment. Moreover, Ministry of Undersecretary Mohammad Al-Kandari expects full support from major companies as the decision is aimed at protecting the rights of both the employers and workers. He said the decision will also provide job security to expatriate workers and protect them from visa traders. He pointed out the main beneficiaries of the decision are the victims of visa traders.In the meantime, Assistant Undersecretary for Labor Affairs Mansour Al-Mansour explained expatriate laborers will only be permitted to transfer to other sponsors after they have completed three years with the current sponsors , reports Al-Dar daily. Confirming the decision protects the rights of both sponsors and the laborers under their sponsorship, Al-Mansour added laborers will be allowed to transfer to other sponsors after one year, but they have to obtain approval from their current sponsors. The Kuwait Trade Union Federation (KTUF) has praised the move of the Minister of Social Affairs and Labor Dr Mohamed Al-Afasi to permit expatriates working at the private sector to transfer their residence to other employers without approval of the existing employers, reports Al-Rai daily.
A number of MPs support the decision but warn of the possible adverse impact on employers. The MPs also expressed desire to work on eliminating human trafficking in the country, and cancellation of the sponsorship system. n other developments, Chairperson of the Human Rights Defense Committee at the Parliament Dr Waleed Al-Tabtabaei has called for regulations to control the transfers, to respect the rights of both employers and employees. e also urged the ministry to cancel the sponsorship system as a first step to eliminating trafficking in persons, which has mortified the image of Kuwait. He added the new move is very promising, but there should also be regulations which will control both sponsors and employees to protect the rights of both sides.
However, he stressed this quick decision adopted by the ministry can harm the interests of employers since employees will be limited to work for their employees for a limited period after which they will gain the right to transfer to other sponsors. Meanwhile, he supported government’s decision to cancel the sponsorship system, saying it is the right step to end human trafficking in the country. He predicted the sponsor ship system will be canceled, but only after careful studies and regulations which can control the market. In her view, MP Dr Rola Dashti underlined the decision of the Ministry of Social Affairs and Labor to allow the expatriate laborers to change sponsors without their existing sponsors’ permission will have a negative impact on the economy of the country, and government should lay down root level solutions toward the issue.
By Sayed Al-Qasas and Abdullah DubiaSpecial to the Arab Times
Speaking to the Arab Times, some ‘mandoubs’, who were at the Labor Office in the Capital Governorate, expressed their reservations on the decision which, they opined, is a temporary solution and will only lead to many other problems in the future. Others regard the decision as an insult to the rights of employers, who hired workers from abroad and trained these workers only for the benefit of another employer. On the other hand, some citizens expressed their full support to the decision, asserting it will improve the image of Kuwait and dispel accusations on the country’s alleged involvement in labor malpractices and human trafficking.Meanwhile, expatriate workers, who visited the Labor Office in Farwaniya, stated the decision is courageous and historical. They look forward to the cancellation of the ‘kafil’ (sponsorship) system, which is important in organizing the labor market, enhancing the skills of workers, and releasing them from the claws of abusive ‘mandoufs’. They think the decision will protect them as the employers could no longer threat to fire them every time they air their grievances or demand privileges, such as salary increment. Moreover, Ministry of Undersecretary Mohammad Al-Kandari expects full support from major companies as the decision is aimed at protecting the rights of both the employers and workers. He said the decision will also provide job security to expatriate workers and protect them from visa traders. He pointed out the main beneficiaries of the decision are the victims of visa traders.In the meantime, Assistant Undersecretary for Labor Affairs Mansour Al-Mansour explained expatriate laborers will only be permitted to transfer to other sponsors after they have completed three years with the current sponsors , reports Al-Dar daily. Confirming the decision protects the rights of both sponsors and the laborers under their sponsorship, Al-Mansour added laborers will be allowed to transfer to other sponsors after one year, but they have to obtain approval from their current sponsors. The Kuwait Trade Union Federation (KTUF) has praised the move of the Minister of Social Affairs and Labor Dr Mohamed Al-Afasi to permit expatriates working at the private sector to transfer their residence to other employers without approval of the existing employers, reports Al-Rai daily.
A number of MPs support the decision but warn of the possible adverse impact on employers. The MPs also expressed desire to work on eliminating human trafficking in the country, and cancellation of the sponsorship system. n other developments, Chairperson of the Human Rights Defense Committee at the Parliament Dr Waleed Al-Tabtabaei has called for regulations to control the transfers, to respect the rights of both employers and employees. e also urged the ministry to cancel the sponsorship system as a first step to eliminating trafficking in persons, which has mortified the image of Kuwait. He added the new move is very promising, but there should also be regulations which will control both sponsors and employees to protect the rights of both sides.
However, he stressed this quick decision adopted by the ministry can harm the interests of employers since employees will be limited to work for their employees for a limited period after which they will gain the right to transfer to other sponsors. Meanwhile, he supported government’s decision to cancel the sponsorship system, saying it is the right step to end human trafficking in the country. He predicted the sponsor ship system will be canceled, but only after careful studies and regulations which can control the market. In her view, MP Dr Rola Dashti underlined the decision of the Ministry of Social Affairs and Labor to allow the expatriate laborers to change sponsors without their existing sponsors’ permission will have a negative impact on the economy of the country, and government should lay down root level solutions toward the issue.
By Sayed Al-Qasas and Abdullah DubiaSpecial to the Arab Times
Saturday 25 July 2009
State Bank of India Life Insurance,SBI Life,Indian Mutual Funds,Bharti AXA,Birla Sunlife,SBI,Reliance,Mutual Fund,Insurance,Mediclaim,Free Advise from experts
Saturday 11 July 2009
Guidelines for Making a Legally Valid Will in India
it is very important to make the will of your assets during your life time only so as to ensure the proper distribution of your assets after your death. I have compiled some useful tips on making a will in India.
http://www.associatedcontent.comarticle/490185/guidelines_for_making_a_legally_valid.html
Guidelines for Making a Legally Valid Will in Indiait is very important to make the will of your assets during your life time only so as to ensure the proper distribution of your assets after your death. I have compiled some useful tips on making a will in India.
http://www.associatedcontent.comarticle/490185/guidelines_for_making_a_legally_valid.html
Thursday 9 July 2009
Monthly Income Scheme (MIS) From Post Office India - Safe Investment Plan
The Post Office’s Monthly Income Scheme (MIS) is a blessing for investors in times of falling deposit rates. A higher interest rate of 8% and an effective yield of 10.5% make it an attractive proposition. Let's checkout how..TOUGH times stare at investors looking for fixed income instruments. The deposit rates offered by banks have fallen to five-year lows. Bank FDs were the favourites till some months back as public and private sector banks offered upto 9% interest on deposits with maturity of 3 years and above. This has now declined to around 7%. The future looks bleaker, with the deposit rates expected to decline further by 50-100 basis points. What should the fixed income lovers do in such a scenario? Is there an alternative to bank FDs?The Post Office Monthly Income Scheme, commonly known as MIS, is the answer. MIS was quite popular some years back. Its appeal, however, declined in the face of a rise in interest rates on FDs and aggressive marketing strategies unleashed by banks to woo new depositors. MIS could come into limelight once again in the backdrop of declining interest rates. Moreover, the post office deposits come with unique features such as a government guarantee on the deposit amount and fixed rate of interest.Like any fixed deposit, a lump sum amount deposited with the post office under the aegis of MIS will earn an interest at a fixed rate of 8% per annum. And, unlike bank FDs, the interest is paid out every month. The tenure is fixed at 6 years. Apart from monthly interest-payout, MIS offers 5% bonus on maturity. The effective annual yield therefore works out to 8.9%, which is much higher than the bank deposit. The value add-on is that the monthly MIS proceeds could be invested directly in Post Office’s Recurring deposit (RD), which gives annual returns of almost 10.5% per annum.HOW DOES IT WORK?Suppose Mr A invests Rs 90,000 in Bank FD for six years. With the rate of deposit hovering around 7%, Mr A will receive almost Rs 46,500 as interest at maturity and an option of compounded interest. On the other hand, if Mr B put Rs 90,000 into MIS today, he will receive Rs 600 every month for 72 months. He is entitled to Rs 43,200 in the form of monthly interest till maturity and Rs 4500 as bonus at the time of maturity. Mr B’s returns total Rs 47,700 in six years, which is higher than interest earned on the bank FD of the same tenure.Suppose that Mr B did not require the monthly interest. So he opts for automatic transfer of MIS interest to Recurring Deposit. A sum of Rs 600 is deposited in his RD account every month, offering 7.5% per annum compounded quarterly. At the end of the sixth year, Mr B will receive almost Rs 51,400 from his RD account. The receivables from RD and the bonus on MIS total Rs 56,000 in six years. As a result, Mr B, who invested in MIS and monthly proceeds in RD, will accumulate Rs 9500 more than Mr A, who opted to invest in Bank FD of the same tenure.The same features of MIS make it unattractive. The interest income is fully taxable as in the case of bank FDs. MIS do have an edge over bank FDs as there is no tax deduction at source (TDS). However, the bank FDs maturing above 5 years are subject to tax benefits under Sec 80C.It will be definitely a better bet if one neglects the tax implications of the scheme. The rate of return is not interest rate sensitive. Though the general interest rates may fall further, the scheme will continue to fetch 8% fixed rate of interest. Further, a combination with RD will even earn an effective yield of 10.5%, which is attractive in times of uncertainty and falling interest rates.Source: EconomicTimes
Saturday 4 July 2009
SBI Life Launches ULIP Maha Anand
SBI life launches Ulip product Maha Anand
Mumbai: SBI Life Insurance, today launched a new unit linked insurance plan--SBI Life Maha Anand for middle and low-income segments.The product would be available at a premium starting from Rs 500 per month, the company said in a statement here."Available at a low premium entry level, Maha Anand offers an opportunity to large sections of society to participate in the entry markets and benefit by systematically investing over a long-term horizon," SBI Life Managing Director and CEO, U S Roy, said.The product is available upto 55 years of age. The maturity age is upto 65 years.It has three fund options-equity, equity optimizer and bond fund.
Mumbai: SBI Life Insurance, today launched a new unit linked insurance plan--SBI Life Maha Anand for middle and low-income segments.The product would be available at a premium starting from Rs 500 per month, the company said in a statement here."Available at a low premium entry level, Maha Anand offers an opportunity to large sections of society to participate in the entry markets and benefit by systematically investing over a long-term horizon," SBI Life Managing Director and CEO, U S Roy, said.The product is available upto 55 years of age. The maturity age is upto 65 years.It has three fund options-equity, equity optimizer and bond fund.
Friday 26 June 2009
Wednesday 3 June 2009
RBI plans to introduce plastic notes
RBI plans to introduce plastic notes
With an aim to provide notes with a longer life, the Reserve Bank of India [ Get Quote ] intends to introduce polymer notes in the country. As a measure in this direction, RBI is mulling to implement a pilot project for the new type of notes.
The advantage of polymer notes is that these notes are cleaner than paper notes, easily recyclable, provide greater security against counterfeiting and will last four times as long as conventional paper notes.
"Polymer notes have been introduced in Australia [ Images ] and the RBI is examining a proposal to start a pilot project for introduction of such notes in the country," said H R Khan, executive director, RBI.
It may be noted, Australia was the first country in the world to have a complete system of bank notes made from plastic (polymer) in 1988.
Khan, who was in Bhubaneswar to release the Rs 10 bi-metallic coins on the theme of connectivity and information technology said, "The timing of the pilot project has not been decided and it is likely to be announced soon."
He said the average life of a currency note is about six to nine months compared to more than 10 years for the coins. Since coins are the mainstay of various economic activities, the Central bank is promoting the use of coins. The design of the new coin has been prepared by National Institute of Design, Ahmedabad [ Images ], and is minted at Noida.
Stating that the proportion of currency in the broad money is about 14 to 15 per cent, Khan said, it accounts for about 11 to 12 per cent of the gross domestic product.
RBI has taken a series of measures for supplying good quality notes and to improve the security features of the currencies. Besides, Reserve Bank of India (Note Refund) Rules, 1975 is also proposed to be amended to make the system simple for the people, he added.
Khan said the lead bank scheme is being revived and the central bank is talking to various state governments to make the system more effective.
As part of the celebration of the platinum jubilee, the central bank has arranged a series of events culminating in April 2010. It plans to show a film on forged notes and supply comics to school children for promoting financial literacy and education among the people.
BS Reporter in Bhubaneswar
Source: Business Standard
With an aim to provide notes with a longer life, the Reserve Bank of India [ Get Quote ] intends to introduce polymer notes in the country. As a measure in this direction, RBI is mulling to implement a pilot project for the new type of notes.
The advantage of polymer notes is that these notes are cleaner than paper notes, easily recyclable, provide greater security against counterfeiting and will last four times as long as conventional paper notes.
"Polymer notes have been introduced in Australia [ Images ] and the RBI is examining a proposal to start a pilot project for introduction of such notes in the country," said H R Khan, executive director, RBI.
It may be noted, Australia was the first country in the world to have a complete system of bank notes made from plastic (polymer) in 1988.
Khan, who was in Bhubaneswar to release the Rs 10 bi-metallic coins on the theme of connectivity and information technology said, "The timing of the pilot project has not been decided and it is likely to be announced soon."
He said the average life of a currency note is about six to nine months compared to more than 10 years for the coins. Since coins are the mainstay of various economic activities, the Central bank is promoting the use of coins. The design of the new coin has been prepared by National Institute of Design, Ahmedabad [ Images ], and is minted at Noida.
Stating that the proportion of currency in the broad money is about 14 to 15 per cent, Khan said, it accounts for about 11 to 12 per cent of the gross domestic product.
RBI has taken a series of measures for supplying good quality notes and to improve the security features of the currencies. Besides, Reserve Bank of India (Note Refund) Rules, 1975 is also proposed to be amended to make the system simple for the people, he added.
Khan said the lead bank scheme is being revived and the central bank is talking to various state governments to make the system more effective.
As part of the celebration of the platinum jubilee, the central bank has arranged a series of events culminating in April 2010. It plans to show a film on forged notes and supply comics to school children for promoting financial literacy and education among the people.
BS Reporter in Bhubaneswar
Source: Business Standard
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