Share everything with your family especially on specific terms

You should make sure that your family - definitely all adults but also older children - are on the same page when it comes to the family’s finances. This could come in handy if you fall ill or suffer an accident. While you take care of your family, there are situations where someone else may need to step in and you should make their life as easy as possible.

Moneymindz made a list you can get started with. You may have more depending on your specific situations.

1. Bank accounts bank deposits: Ideally, you should only have one bank account per family member. Maintain a list of all bank account numbers, balances (you can update them once in 6 months) and nomination details. Keep your Net Banking credentials (passwords and Customer ID) in an Excel Sheet, accessible to your family members only.

2. Investment accounts: Make a list of all your investment accounts and brokerage, Demat accounts along with nomination details.

3. Financial Physical Assets: You should keep details of home ownership, bank lockers, large refundable deposits with institutions other than banks, as well as your provident funds' details.

4. Loans: If you have pending loans, the details of loans (car or home, etc.), such as EMI amount to be paid, time remaining to repay the loan etc.

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5. Credit cards and debit cards: A list of all credit and debit cards, with their respective numbers (on the card), contact details of the card company. Suppose a case, a fraudulent event is reported, your family members can block the cards immediately.

6. Health Insurance Policy: Make a list of your health insurance policies – personal as well as provided by your employer and any top ups. Check out the list of network hospitals, co-pay amount, the process of informing the insurance company etc.

7. Life Insurance Policy: Make a list of your life insurance policies, amount, type of policy, beneficiary, nominee, riders, date of premium payment, date of maturity. Will: Keep your will in a safe place and let your family know where it is.

Why fixed deposit is as important as Debt Fund?

If you are worrying about falling interest rates leaving you with no fixed income options, you are right – if you’re only fixed income option is bank Fixed Deposits (FDs). But did you know that falling interest rates can actually be a great opportunity in the debt market? Read on.

You may have often heard analysts say that there is an inverse correlation between bond prices and interest rates movement. Yes, that is where the opportunity lies.

Consult a Financial Planner before Investing in any financial product.

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Safety First

Bank Deposits are one of the safest avenues for savers in India with an almost negligible chance of default (although there have been instances of co-operative and local banks defaulting). As with all mutual funds, there are no guarantees in debt funds. Returns are market-linked and the investor is fully exposed to defaults or any other credit problems in the entities whose bonds are being invested in. However, that's a legalistic interpretation of the safety of your investments in mutual funds.

Your investment comes to a total of less than Rs. 1.2 Lakh.

If you don’t plan to invest more than Rs. 1.2 Lakh (lump sum or in installments), then the interest earned per year (@7.5% or 8%) is less than Rs. 10,000. In this case, you won’t incur any TDS on your FD and thus your interest earned is not eaten away by taxes.

Taxation

The other big difference is that of taxation. Returns from bank fixed deposits are interest income and as such have to be added to your normal income. Since many investors are in the top (30 per cent) tax bracket, this takes away a large chunk of their returns. Banks also deduct TDS on interest income from fixed deposits. The tax rates are similar for debt funds held for less than 36 months (though TDS will not generally be deducted). However for debt funds held longer than 36 months, returns are classified as long term capital gains and are taxed at 20 per cent with indexation.

Liquidity

Turning to liquidity, open ended debt funds proceeds are credited within a period of 2-3 working days depending on factors such as whether an ECS mandate is registered. Fixed Deposits are also typically available at 1-2 days’ notice, but usually carry a penalty if they are redeemed before the maturity date. Debt funds also have exit loads or charges that are usually levied for redemptions, typically upto 3 years. These exit loads are not applied to liquid funds with just a few exceptions for very short periods of time.

Things To keep in mind before opting for personal Loan balance transfer.

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Having a rough time managing your finances? Are those Personal Loan installments causing trouble? Well, you can’t go back in time to choose a better loan offer, but you sure can explore other options. Have you ever considered a balance transfer? Maybe, it’s time you did!

Life doesn’t often give you a second chance. But, with the option to opt for a balance transfer, you actually do get a second chance. A chance to move to a lower interest rate on your on your Personal Loan from the current high rate that you’re at.

But, hold on a second! We know you’re excited about it, but you can’t just opt for a balance transfer at the drop of a hat. You need to think about a lot of other stuff.

Read on to know about the entire process and then decide whether it’s the right choice for you or not.

What Is A Balance Transfer?

A Personal Loan balance transfer works exactly like a Credit Card balance transfer. You get to avail a better rate of interest and a better loan offer by transferring your loan balance.

It could mean transferring it to another bank or switching to another loan offered by the same bank. It all depends on the availability, rules of the banks involved and, of course, your luck.

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Calculate the total outflow

Although the new bank tries to attract you by reducing your monthly EMI and giving you a longer span to repay (increasing your tenure), you should be clear that such facilities increase the total amount you pay to the bank because the interest keeps on adding to the outstanding loan amount. If you are paying higher EMIs with your current bank, compare the total outgo for both banks and then take a decision. If you are not hard-pressed for cash, you should prefer staying with your bank, pay a larger EMI and finish off your loan as soon as possible to save all the money you would overpay, by opting for a longer tenure.

Study the processing fees and other allied charges

Take into consideration the processing fee, stamp duty, legal charges, valuation fee, technical charges and other allied charges that your new bank would charge and compare it with the benefit in terms of reduced interest rates. Is there a net benefit or a net loss?

For some banks, processing fee is a percentage of the total loan amount, while for others, it depends upon whether you are salaried or run a business. Still others have a fixed amount, uniform for all. If the bank calculates it on the basis of the outstanding amount, calculate it in rupee terms to find the cost. Also, your existing bank may jack up the costs of closure of accounts if it finds out that yours is a case of takeover. One of the complainants in an online complaint forum talks about how the bank officials refused his request to charge the interest rate on floating basis and insisted for recovery on a fixed rate of interest if the customer opted for takeover. They wanted the customer to pay at fixed interest rates, much higher than the floating rates applicable.

Collateral to outstanding ratio

If you have already repaid a huge chunk of your loan, do not offer the complete original collateral to your new bank. Why would you want to give a security which is double the amount of your loan outstanding? You would use it to take a separate #loan instead, if the need arises. Offer your new bank a lesser amount of collateral. And if the bank still insists on the same, negotiate for lessening the interest rate further.

Charges and benefits of allied account requirements

When you take a loan, banks generally require you to open a savings account and route your money through that account. In case it does so, find out the charges applied and the facilities provided to you.

You should consider such provisions and your requirements before taking the final decision. Also, if your current bank is the one where you do all your banking, you become a premium customer for them; know a lot of their staff, are well-versed with their processes and may also be given services faster than others in queue. These softer aspects go a long way for ease of use and comfort banking, and should be thought about before foregoing them.

Terms and conditions governing loans

Before signing on the dotted line, you MUST read all terms and conditions of both banks. Some banks include buying insurance from specific company or depositing a certain amount in fixed deposits or opening a number of saving accounts for self as well as family, etc. Read the “terms and conditions” part of the sanction letter and understand the pros and cons of such conditions.

Other attached frills on offer

Attracting customers by offering them frills with loans is a fad. Free credit card and personal accident insurance tops the list of offers. Before falling for these, analyse whether you really need them and ask for more information about terms and conditions governing them. A well-known friend was sold a ‘free’ credit card. He woke up the next year only to realise that the card was free only for one year. That is the extent of mis-selling being done.

Final take

Do not fall for an interest rate, or benefit, that is only marginally better. After all banks are into the business of lending. Why would one want to give you loans at a lower interest rate and lose profits when others in the market are earning a higher rate of interest? In your best interest, it is good to be suspicious and ask and consider all the issues mentioned above.

Credit card or debit card! What is better?

Your probably have at least one debit card and credit card in your wallet. The convenience and protection they offer to us are hard to beat any instances.

Debit cards are extremely useful and convenient as it relieves us from the stress of carrying a cash heavy wallet, a chequebook, and yet gives us the freedom to have free access to your money through ATMs and swiping the card at merchant outlets instead of paying by cash. Linked to the cardholder’s bank account, debit cards are ideal for quick and hassle-free usage.

But they have important differences that could substantially impact your pocketbook. Here's how to choose which one to use when you need to swipe the plastic.

They Look alike but they are differenent

Credit and debit cards typically look almost identical, with 16-digit card numbers, expiration dates and PIN codes. But that's where the similarity ends. Debit cards allow bank customers to spend money by drawing on funds that they deposited with the card provider. Credit cards allow consumers to borrow money from the card issuer up to a certain limit in order to purchase items or withdraw cash.

Credit cards are issued as either standard cards, which simply extend a line of credit to their users; rewards cards, which offer cash back, travel points or other benefits to customers; secured credit cards, which require an initial cash deposit that is held by the issuer as collateral; and charge cards, which have no preset spending limit but often do not allow unpaid balances to carry over from month to month.

You probably have at least one credit card and one debit card in your wallet. The convenience and protection that they offer are hard to beat in many instances, but they have important differences that could substantially impact your pocketbook. Here's how to choose which one to use when you need to swipe the plastic.

Advantage: Credit Cards

Rewards. Credit card users can reap cash, discounts, travel points and many other perks unavailable to debit card holders by using rewards cards. Smart consumers who can pay off their cards in full and on time every month can profit substantially by running their monthly purchases and bills through them.

Credit scores. Credit card use is also reflected on the customer’s credit report, which allows responsible spenders to raise their scores with a history of timely payments.

Warranties. Credit cards can also provide additional warranties or insurance for items purchased that may exceed those of the retailer. If an item bought with a credit card becomes defective after the manufacturer’s warranty has expired, for example, it's worth checking with the card company to see if it will provide coverage.

Legal protection. These are also notably different, with credit cards offering more security.

Liability for lost or stolen cards. Credit cards still offer much greater protection in most cases for those whose cards are lost or stolen. As long as the customer reports the loss or theft in a timely manner, his/her maximum liability for purchases made after the card disappeared is $50. The Electronic Funds Transfer Act gives debit card customers the same protection from loss or theft – but only if the customer reports it within 48 hours of discovery. After 48 hours, the customer’s liability rises to $500; after 60 days there is no limit.

Disputing transactions. The Fair Credit Billing Act allows credit card users to dispute unauthorized purchases or purchases of goods that are damaged or lost during shipping. But if the item was bought with a debit card, it cannot be reversed unless the merchant is willing to do so. What's more, debit card victims don't get their refund until due process has been completed. Credit card holders, on the other hand, are not assessed the fraudulent charges made in their names. While some credit and debit card providers offer zero-liability protection to their customers, the law is much more forgiving for credit card holders.

Car rentals. If you need to rent a car, most credit cards provide some sort of waiver for collisions. Even if you want to use a debit card, many car rental agencies require customers to provide credit card information as a backup. The only way out for a customer may be allowing the rental agency to put a hold of perhaps a few hundred dollars on his or her bank-account debit card as a form of surety deposit.

The Bottom Line

Smart shoppers who can control their spending are probably wise to reap the benefits offered by credit cards for the majority of their purchases. Debit cards protect the frugal from fees and ensure that less disciplined spenders stay within their means. For more information on the proper use of credit and debit cards, consult your bank or financial advisor.

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Where to Invest Insurance or Mutual Fund?

First of all both life insurance (term insurance only) and investments (mutual funds, ppf, etc) are both important and necessary. They are like idli and chutney, you need both in right proportions.

To your specific question - is investment in insurance a good idea?

It is best to keep your life insurance and your investments separate. One product that can do everything is myth and does not happen in most cases.

Keeping these decisions separate you ensure that:

· You get appropriate amount of life cover through Term Insurance

· Your expenses are contained, that means higher growth and accumalation

· You have a better control, as you know which part of your portfolio is supposed to do which function

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Human Psychology at Play while buying Insurance:

Term Insurance: If I buy a policy and pay a premium of Rs. 25K per year, after 10 years if nothing happens to me I would feel a loss of Rs. 2.5L since a term insurance policy will not return anything.

To overcome this behavior, where we do not want to take up a loss like this insurance companies lure us into buying savings product.

Now the fact of the matter is, no insurance company will pay you from your their pocket. Rather to give you a cover with savings, they will charge you a higher premium and invest that on your behalf.

You will just feel that you have not lost your premium money, as that gets hidden by the returns generated by the additional investment you are doing with them.

Very high cost of ULIPs and insurance policies erodes your capital

When a company offers insurance coverage along with returns on capital ( such as ULIPs or other plans from LICs) they charge very heavy commissions and management fees.

These commission fees are in the range of 10-25% hence the investor capital gets eroded because of the commissions and returns get affected a lot. Whereas direct mutual funds are zero commission mutual funds and the total expenses for fund management are 1-1.5% only. Hence your wealth does not get eroded in payment of commissions and mutual funds are better suited for investments. And specially for young people who can have a long term horizon of 5-10 years mutual funds can definitely provide better returns.

Mutual fund + Term plan - better option to get insurance coverage and long term returns

Having said that getting insurance coverage is also important hence a smart investor should go for 'Term plans' for insurance and investment in Mutual funds for wealth creation over long term.

'Term plans' are pure insurance plans which secure your family financially, by offering a high life insurance cover amount for a relatively low premium payment.

Here the management costs, commissions etc. are lower and you can get higher risk cover with very low premium.

Understanding GST in simple way.

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Goods and Services Tax (GST) is an indirect tax reform which aims to remove tax barriers between states and create a single market. For that to happen the constitution first needs to be amended to remove different layers of governments’ exclusive powers to levy taxes. Once this step is taken, the tax barriers between states, and centre and states will disappear.

Current Scenario –

a) Central Taxes:- Central Excise/Custom Duty, Central Sales Tax on Goods and Service Tax charged on Services, Surcharge & Cess

b) State Taxes:- State Vat, Sales Tax Deducted at Source, WCT, Luxury Tax, Entertainment Tax, Tax on Lottery, Surcharge & Cess

GST Scenario

A dual layered tax system with both Central and State GST levied on same base on all the goods and services except Petroleum ,High Speed Diesel, Motor spirit and Natural Gas to be brought at a later date, subject to recommendation of GST Council.

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Dual system of GST includes :

1.SGST or State GST - collected by State Government.

2.CGST or Central GST - collected by Central Government.

3.IGST or Integrated GST - collected by Central Government.

Will the new GST allow tax cascading benefits?

Many of us are aware that service tax and VAT have cascading benefits, which means you can avail credit of tax paid by you on inputs. For example in case of service tax – you levy service tax on services you sell and while depositing this tax you can take credit of service tax paid by you on services used as inputs.

This cascading benefit shall also be available in case of GST.

One Nation, One Tax?

Though perceived to be a single tax mechanism across the country, India is actually implementing dual GST. In dual GST, all intra-state transactions of goods and services made for a consideration will attract two levies i.e. CGST (Central GST) and SGST (State GST); while an inter-state supply transaction will attract IGST.

For e.g. If you are a trader from Mumbai supplying goods to your customer in Pune, then you will charge CGST and Maharashtra SGST. But if you supply goods to your customer in Ahmedabad (Gujarat), you will charge IGST.

GST should be able to resolve most of the issues in the current tax structure such as classification, valuation, double taxation disputes etc. One key thing to note is that most tax credits that are not available in the current tax regime with VAT, Luxury tax, Entertainment Tax etc. will be available with GST.

Claiming Tax Credit:

To enable the buyer to claim input tax credit, the GST law inter-alia prescribes that the supplier should deposit the GST and file GST returns. Effectively, through this provision, the buyer of goods/ services will have to in turn ensure that all his vendors pay GST and file returns.

Likely rates for GST:

The rate of GST has not been specified in the draft GST law. However, various news reports suggest that the rates will be 0%, 5%, 12%, 18% and 28% (plus cess).

Positive Impact of GST on the Common man:

•A unified tax system removing a bundle of indirect taxes.

•Less tax compliance.

•Removes cascading effect of taxes.

•Manufacturing costs will be reduced, hence prices of consumer goods likely to come down.

•Due to reduced costs some products like cars, FMCG etc. will become cheaper.

•Lower prices will increase demand/consumption. Increased demand will lead to increase supply.Hence, rise in production of goods.

•The increased production will lead to more job opportunities in the long run .But, this can happen only if consumers actually get cheaper goods.

•A unified tax regime will lead to less corruption which will indirectly affect the common man.

Tips To solve financial Problem by changing attitude towards your money.

One of the most common financial pitfalls out there is having a poor money attitude. And among the worst money attitudes is the idea that all you need is more money, and that once you have it, your financial problems will be solved.

The harsh reality is that, while making more money can help your situation, chances are that it’s not truly a money earning problem you have; it’s a money management problem.

It’s a management issue. Before you can solve your financial problems, you need to look at your attitude towards your money habits, and the way you manage your financial resources. Until you start employing sound financial management principles, you’ll always have money problems — no matter how much you make.

1: Overcome the “If only I had more money” attitude. Although it’s natural to want more money when you’re experiencing financial problems, it’s important to keep in mind that simply getting more money won’t solve your problems. You could have a lot more money fall into your life (from a large tax refund to a generous Christmas gift) and yet still get into financial trouble if you don’t change the way you manage money. What’s important isn’t how much money you make, but what you choose to do with the money (of any amount) that you have. So shift your focus from changing your income to changing yourself. Ask God to show you what unhealthy behaviors you need to change (such as over-spending, under-planning, over-borrowing, and under-saving) and to help you change those behaviors by changing their underlying attitudes. Take personal responsibility for the financial mistakes you’ve made in the past, and learn from them. Choose to forgive yourself for your mistakes, and to forgive other people who have made financial mistakes that have impacted your life. Look forward to a healthier financial future.

2: Overcome the “I deserve a treat” attitude. This attitude drives you to make impulsive purchases to reward yourself for hard work or give yourself some other emotional gratification, such as comfort or stress relief. Realize, though, that habitually buying things on impulse wastes lots of money as your small expenditures add up to large amounts. The money that you currently spend impulsively to splurge on little treats (from candy bars or cups of coffee to new outfits or gadgets) can help you save up toward more meaningful purchases that would add much more value to your life. Spend some time reflecting on what you’d most like to spend your money on, and why. Clarify the dreams and goals you’d like to pursue once you’ve saved enough money for them – and then remind yourself of those dreams and goals, to motivate yourself to refrain from impulsive spending and allocate the money you would have previously spent frivolously to savings instead.

Consult a Certified Financial Planner near you before taking any investment plan because it’s important to first judge your requirement & then select best suitable investment.

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3: Overcome the “It won’t happen to me” attitude. It’s tempting not to think about emergency expenses until you must deal with them, but since life is unpredictable, you’ll inevitably have to deal with expenses that you didn’t expect – from car or home repairs to hospital bills for emergency room visits. Rather than go into debt when emergency expenses hit, you can manage such expenses well if you’ve saved for them in advance. Work to set aside at least three to six months of income in an emergency savings fund. As you do, keep in mind four different financial priorities: regular bills (which are both urgent and important), goals (expenditures you want to plan for within the next year that are important but not urgent, such as vacations), leaks (impulse purchases that seem urgent but aren’t important), and wastes (expenditures that aren’t either urgent or important, such as money spent on alcohol or gambling). Anticipate the approximate financial cost of important purchases you want to save money for, and then set specific savings goals for each of them.

4: Overcome the “I’ll fake it ‘til I make it” attitude. This attitude leads you to buy things simply because they’ll make you appear wealthy, rather than for their intrinsic value. Pray for the ability to overcome the psychological needs that may be fueling this behavior in your life (from wanting a personal sense of accomplishment through what you buy, to trying to impress other people socially through an image of wealth). Practice developing a contented attitude by regularly focusing on the good aspects of what you already have and diverting your thoughts away from what you don’t have. Ignore advertising as much as possible; instead, discern what you want for yourself, based on your own values

Coolest way of money management!

To be honest with you, spending the money is a very easy task. However, saving the money is a very tough task. You are working hard in a company to deliver the given target for the company. Furthermore, you are getting salary at the end of the month for all your hard work. 

Now, the major thing is you must also learn to save your money in a logical fashion. We have got some exciting tips to undertake some cool savings in a systematic and satisfactory manner. They are given below as follows:

Select A Good Bank:

You must be judicious in selecting a good bank and open a bank account. Check for the facilities and benefits. 

Take Insurance And Pay Annually: One of the best aspects of the finest savings is that select a good insurance plan and make premium payment in an annual manner. This prevents that extra pressure on your salary and helps you to enjoy benefits.

Do Not Spend Money, When You Are Emotional: Various problems can take place, and at this juncture, you must be careful in spending money in a logical manner. During emotions, being upset, you can spend without any control. This can be disastrous at times.

Consult a Certified Financial Planner near you before taking any investment plan because it’s important to first judge your requirement & then select best suitable investment.

Moneymindz.com will make it easy for you. Just give us a missed call on 022-62116588 to explore our India’s best Free Advisory Service.

Avoid Usage Of ATM: 

You must be careful in going to ATM, because you incur the withdrawal fees. For example: If you have ATM Card of Axis Bank, then you can use it 5 times in the Axis Bank ATM. If you use ATM card of Axis bank in other ATM, then you are charged INR 20 + Service taxes. Have an effective plan, and withdraw amount accordingly.

Check Bank Statements: 

Please make sure that you check your bank statements in a regular manner. Understanding how much you have spent, help in managing the finances in a logical manner. 

Follow 30 day Rule: You received your salary and wanted to purchase groceries for month. Purchase groceries for the month and then make sure you do not purchase any product. This is a golden rule to save the money.

Spectacular Negotiation Skills: 

Please make sure that you are negotiating rates well, while making purchase of any goods/services. Go to shops/supermarkets offering good discount on products. Check out the coolest offers and purchase products. Having a coupon booklet can do wonders at this juncture.

So, I would say that above mentioned skills plays a yeoman role in saving lot of money.

Fixed Deposit -“Variety is a spice of life”.

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Banks are called custodians of public money and mobilization of the deposits from the public is the most important function of the commercial banks. When money is deposited with a “tenure” , it cannot be withdrawn before its maturity fixed at a particular time. Such deposits are called “Time deposits” or “term deposits”. The most common example of Time deposits is “Fixed Deposit”. All time deposits are eligible for interest payments. Interest rate depends upon the tenure and amount of deposit. This rate varies from bank to bank. The interest rate is generally higher for time deposits of longer tenure.

Fixed deposits generally have a lock in period and an investor cannot withdraw money from his fixed deposit before the lock in period is over. If in any unforeseen circumstances, the investor needs to withdraw money from his fixed deposit, he will need to break his fixed deposit. On breaking the fixed deposit, investor becomes liable for a fine of 0.5-1% on interest rates.

Safety has always been a consideration while investing. Investors need security on their capital and the assurance of returns. From this point of view, bank and NBFC Fixed Deposit schemes have always been attractive options as they are regulated by the rules laid down by the Reserve Bank of India.

There is a famous saying “Variety is a spice of life”. So fixed deposit can be of different types.

Tax Saver Fixed Deposits

These are long-term FDs. Generally, your investment is completely locked down for a period of five years. But, you still get the benefit of tax deduction through these FDs. The principal amount you invest in tax saver FDs are exempt from taxation, with an upper limit of Rs.1.5 lakhs per FD.

Callable Fixed Deposits (FDs)

The FDs currently offered by banks are known as callable fixed deposits. Here you can withdraw the FD amount anytime before maturity and banks charge some penalty for this. But there is no lock-in period for such FDs and you can get your amount deposited immediately (in most cases). The term 'calling an FD' means withdrawing the FD, or in other words, callable FD means the depositor is calling his FD for withdrawal.

Non-callable Fixed Deposits (FDs)?

In this case non-callable fixed deposits are similar to callable FDs but the major difference is that non-callable FDs cannot be withdrawn or closed before maturity. These are hence completely locked and the depositor has no authority to close it prematurely.

Flexi Fixed Deposits

These are FDs linked to your savings account. You can create an FD with an initial deposit and link it to your savings account. You can also set a cap on your savings account and any excess will be transferred to the FD.

Standard Fixed Deposits

These are offered for tenures ranging from 7 days to 10 years. The longer the tenure, the higher the interest earned. The rate of interest is unaffected by market fluctuations because it’s set at the time of creation of the FD.

Cumulative fixed deposit

In a cumulative fixed deposit scheme, there is no fixed interest that is payable over a quarter, half year or every year. For example, the interest rate is compounded every year or every quarter and paid at the end of the tenure.

Say, you place a fixed deposit for Rs 1 lakh per year. Every year you should get an interest rate of Rs 10,000 annually on a simple rate of interest. Therefore, if the deposit is placed for one year, you should get back Rs 1.10 lakhs.

Non - Cumulative fixed deposit

In this case of non cumulative scheme the interest is paid every quarterly, annually or every month as the firm may decide. Thus if its is paid every quarter the individual would get an interest rate of Rs 2500 every quarter.

You can opt for Differetmt types Bank FD if your financial goals are:

• To earn returns between 8.5–9.5% p.a (differs from bank to bank, period of deposit and with individual’s age)

• Not willing to take much risk for aforesaid return (Guaranteed returns every year that get compounded until maturity)

• Need liquidity in investment for general purpose (Bank FDs can be withdrawn prematurely with payment of some penalty charges.)

• Can need collateral loans anytime (A person with a bank FD is lowed collateral loans up to 90%)

• Have no other regular source of income (Interest can be deposited back to be compounded or can be withdrawn monthly/quarterly)

If you can relate to the above goals FD is your cup of tea. If you are a person whose income is beyond the taxable limit and probably much higher, investing in Bank FDs will not be recommended as the entire income earned from FDs is taxable.

I will suggest you to invest in FD, only if you want to take less risk and fixed return. If you can take more risk than there are many investment avenues with higher returns

Financial lessons from Bollywood Movies.

Films are often a reflection of our society but they also hold a mirror to us. It is no wonder then that the good ones go on to show the tragedy and triumph of the human life, thereby influencing all of us in some way. Being a movie buff, I end up watching almost every Hindi movie that hits the theatre. Bollywood films always leave a great impact on me. They make me feel happy, sad, emotional and excited all at the same time. No matter in which genre it fits, Hindi films also give valuable lessons. While some offer ideas on fashion and styling, others give proposal ideas to youngsters. But what if I say some Bollywood movies give valuable financial lessons, would you believe me?

Here is a list of films that you may have watched multiple times but missed their valuable financial lessons. Get a class of cook and some popcorn before you start reading!

Chak De India:

Shah Rukh Khan starrer Chak De India is a sports based movie. The movie deals with various management principles such as team building, team work, leadership and goals. However, the most important financial lesson that can be gained from this movie is that one should do proper homework before strategizing. In the movie, the hockey coach does accurate planning and prepares well before every game of his team. Similarly, before you invest in any avenue, you must do thorough research and homework on the investment. If you plan to invest in a mutual fund or a debt product, it is important to understand the features, benefits and risks of the product before investing. Only then is it possible to maximize returns and minimize risks, keeping in mind your individual goals and needs.

Baghban

This film is a perfect example of miscalculated retirement planning. The lead actor Raj Malhotra (Amitabh Bachchan) spent everything, including provident fund and gratuity, on education and other needs of his four sons. But when he retired, he had nothing to back him up, and none of the sons was ready to look after him and his wife. Taking a lesson from the film, we should always do an early retirement planning instead of relying on our children. With longevity increasing in the country and rising medical inflation, the need to do retirement planning has increased. Further, the amount received from the employee’s provident fund may not be sufficient to sustain a longer life.

In the past few decades, there has been a cultural shift in the country with the emergence of nuclear family culture. Many retirees don’t prefer to depend on their children for expenses. Many times, children also refuse to support their retired parents financially. Maintaining an independent and relaxed lifestyle is sustainable only if it is carefully backed with a financial cushion.

Are You Finding difficulty in your retirement planning

Consult a Certified Financial Planner near you before taking any investment plan because it’s important to first judge your requirement & then select best suitable investment.

Moneymindz.com will make it easy for you. Just give us a missed call on 022-62116588 to explore our India’s best Free Advisory portal,Free Financial Advisory.

MONEYMINDZ DO NOT SELL ANY FINANCIAL PRODUCTS, WE ONLY PROVIDE UNBIASED, FREE, ON PHONE FINANCIAL ASSISTANCE

3 idiots

3 Idiots, one of the biggest blockbusters of all times and starring Aamir Khan has one underlying message – keep things in life simple and uncomplicated. This can lead you to achieve great results, if you are hard working and committed. The same applies to our investments and financial life. Nowadays, there are several complicated investment products, details of which the sales person himself does not understand in most times. Raju Rastogi, (Sharman Joshi) came from a low-income family. His father was a postman but in an accident, his limbs got completely paralyzed and as a result, he lost his job. The family was dependent on the meager income of his mother which was not enough to fund household and medical expenses. Raju wanted to take the responsibility of his family and therefore, he was working hard to become an engineer and land a lucrative job. However, his miserable financial state made him emotionally weak and at one point of time, he even attempted to commit suicide.

The destiny of Raju’s family would have been different if his father had bought a term plan, offering complete coverage against disability and critical illness. But due to his poor state, Raju’s father never thought to buy a term insurance.

For example, the Unit Linked Insurance Plan is a combination of insurance and mutual funds, and turns out to be very expensive for the investor. The agent who sells you the ULIP is himself unaware of these details or is so overwhelmed by the complexity of the product that he chooses to keep quiet when he sells it. Keep your investments simple – take a pure term insurance for insurance cover and an equity mutual fund for investment. This is what 3 Idiots teaches us.

Deewar

Vijay and his brother endured a lot after the demise of their father. Even due to the shortage of funds, Vijay had to stop his education in the mid-way and in the process of fighting for the family’s rights, he became a smuggler.

No matters how much you have saved over the years, unforeseen circumstances, such as death, affect the family both financially and emotionally. Vijay’s father was not financially strong, and hence, he did not buy a term plan, however since you are working and drawing a decent salary, you must not repeat the same mistake of ignoring a term policy. A term policy ensures that your family continues to enjoy a life without any financial worries even in your absence. After your death, the insurer will pay death benefits which can be utilized by your family for child’s education and other household expenses.

As a hero protects his loved ones from a villain, we should also buy insurance to safeguard our family from life’s adversaries. Further, like movie tickets, it is possible to buy insurance and investment products with a click of the mouse. " Be the real hero of the family "

Understanding Employee Stock Option Plans

An employee stock ownership plan (ESOP) is a qualified defined-contribution employee benefit (ERISA) plan designed to invest primarily in the stock of the sponsoring employer. ESOPs are "qualified" in the sense that the ESOP's sponsoring company, the selling shareholder and participants receive various tax benefits. ESOPs are often used as a corporate finance strategy and are also used to align the interests of a company's employees with those of the company's shareholders.

BREAKING DOWN 'Employee Stock Ownership Plan - ESOP'

Since ESOP shares are part of employees' remuneration for work provided for the company, ESOPs can be used to keep plan participants focused on company performance and share price appreciation. By giving plan participants an interest in seeing that the company's stock performs well, these plans are believed to encourage participants to do what's best for shareholders, since the participants themselves are shareholders. Employees are provided with such ownership often with no upfront costs. The provided shares may be held in a trust for safety and growth until the employee retires or resigns from the company. Once an employee retires or resigns, the shares are given back to the company for further redistribution or are completely voided.

Employee-owned corporations are companies with majority holdings by their own employees. As such, these organizers are like cooperatives, except that the company's capital is not equally distributed. Many of these companies only provide voting rights to particular shareholders. Senior employees may also be given the benefit of getting more shares compared to new employees.

Stock ownership plans provide packages that act as additional benefits for employees in order to prevent hostility and keep a specific corporate culture that company managements want to maintain. The plans also stop company employees from taking too much company stock.

Are You Finding difficulty in investment ? 

Consult a Certified Financial Planner near you before taking any investment plan because it’s important to first judge your requirement & then select best suitable investment.

Moneymindz.com will make it easy for you. Just give us a missed call on 022-62116588 to explore our India’s best Free Advisory Service.

MONEYMINDZ DO NOT SELL ANY FINANCIAL PRODUCTS, WE ONLY PROVIDE UNBIASED, FREE, ON PHONE FINANCIAL ASSISTANCE

The major benefits of awarding Employee Stock Options are mentioned below:

Lock-in Period:

ESOP’s come with a lock-in period known as vesting period and employees can exercise the options only after this period. If the employee leaves the organisation before completing the specified period – these ESOP’s get lapsed and the employee will not get any benefit.

A ‘Sense of Ownerhip’ for the employees:

When the employees are given shares of the same company in which they are working, it gives them a sense of feeling that now they are not employees of this organisation but are the owners. As they are now they owners, they also have a share in the profits of the company. In fact, since employees directly benefit from the increase in the share price, they focus on overall value creation for the company.

Kind instead of Cash

ESOP’s are a way of awarding the employees in kind instead of cash. In the initial days of ESOP’s in India, small organisations who were cash strapped used to give ESOP’s to their employees to increase the overall pay package. In this manner, they were able to compensate the employees in kind without affecting their cash reserves (if a organization issues ESOP’s- its cash reserves are not affected )

Do you have lakh to spare?

Money makes money. If you want to make more money then you should know how to invest your money for maximum returns. You just could not spend money and expect to raise your savings. In order to raise your savings you need to know ways investing your money.Every penny that you earn needs to be saved for your future. In this article, I tell you how to invest your 1 lakh rupees for better returns. It does not matter if the amount is more than Rs 100,000, like Rs 500,000 or Rs 1000,000. All the points are very simple and you don’t have to be a financial expert to understand them.

1 Mid-cap, Multi-cap Mutual Fund.

The first best way to invest 1 Lakh for the good returns is Midcap or Multi-cap Mutual Funds. Investment in these type of mutual funds is a risky affair and may not be suitable for everyone. If your risk appetite permits you, you can plan to invest in these funds via SIP route.

You can expect 12-18% return from these type of Mutual Funds.

Consult a Certified Financial Planner near you before taking any investment plan because it’s important to first judge your requirement & then select best suitable investment.

Moneymindz.com will make it easy for you. Just give us a missed call on 022-62116588 to explore our India’s best Free Advisory Service.

MONEYMINDZ DO NOT SELL ANY FINANCIAL PRODUCTS, WE ONLY PROVIDE UNBIASED, FREE, ON PHONE FINANCIAL ASSISTANCE

2 ELSS.

If you have not exhausted your 80 C limit, the best way to invest 1 Lakh rupees for you is ELSS. ELSS is one of the most popular tax-saving investment options. ELSS gives dual benefits you can enjoy capital appreciation along with tax saving. However, ELSS comes with 3 years lock in period. You will not able to redeem ELSS fund till 3 years.

ELSS can give returns in the range of 10-12%.

3 Balance Fund.

Balance Fund is next investment option where you can plan to invest 1 Lakh rupee. Balance mutual fund is the best investment option for the investor who is looking for safety and moderate returns. Balance fund follows the principal of balancing they divide the funds and invest in equity and debt both. So, you can enjoy best of both worlds by investing in balance mutual funds.

Balance Mutual Funds can generate a return in the range of 10-13%.

4 Equity.

Equity investment is one of the best ways to invest 1 lakh rupees. Investment in equity can bring ultra-high returns. However, investment in equity is very risky and you may end up losing money also. So it is high risk, high return game.

This investment option is best suited for the aggressive investor. Stock selection and timing are most important creation for investment. Stock market investment requires extreme care and enough knowledge.

5 Public Provident Funds.

Public Provident Fund (PPF) is one of the best tax saving investment options for the long-term perspective. PPF provide slow steady and secure return. You can open PPF account at any bank. Tenure of PPF account is 15 years and that can be extended for 5 years more. The current Interest rate applicable to PPF account is 8.1% (From 1st April 2016 to 30th June 2016).

6 Sukanaya Samriddhi Scheme.

Sukanya Samriddhi Scheme is saving scheme for the girl child by the government. You can open Sukanya Samriddhi Account at any bank or post office. Tenure of SSA account is 21 years from the date of opening. You need to deposit money in this account for 14 years. This account can be open on girl child name. Age of girl child should be less than 10 years. The current Interest rate applicable on SSA account is 8.6%.