The government's borrowing programme will adversely impact returns from debt funds. Choose your funds carefully.
With the Securities and Exchange Board of India abolishing the entry load on mutual funds, sector experts believe distributors are likely to aggressively push high-commission insurance products. The quashing, applicable from August 1, will bring down their commission to less than half of what they earn right now. The result is likely to be aggressive selling of, for one, unit-linked insurance plans (Ulips).
The trend has attracted the attention of fund managers who have resumed launching products targeted at HNIs.
Reliance Mutual Fund and UTI Mutual Fund have applied to Sebi to start schemes that will collect money directly from investors and buy units in Gold Exchange Traded Funds. Though at a slightly high cost, these schemes take away the hassle of maintaining demat and trading accounts with brokers. "These two factors were the biggest hindrance for gold ETFs," said Devendra Nevgi, ex-CIO, Quantum Asset Management. Nevgi started the gold ETF at the fund house.
Institutions that are supposed to promote and sell the product are more or less clueless about it even though it has been a month since the scheme was launched on May 1. Only few of the institutions that have been nominated to help investors enrol are aware of the procedures. There were no designated help desks. At best, one could only get the form.
Buying a cover at a late age is expensive; the benefits, too, are limited.
The market-linked health plans have advantages, but can hurt during downturns. This one is for the indisciplined investor.
Two leading banks, State Bank of India and HDFC Bank, have sought permission from the Reserve Bank of India (RBI) to buy gold from retail investors.
Card protection through insurance is a good idea, but stringent guidelines make it quite unattractive.
Rising delinquencies and non-performing assets in the credit card business are forcing banks to reorient their outlook, from an aggressive sales strategy to inducting people who will focus on recovery and cleaning up the portfolio.
"Cards that are not active have a cost attached to them," said the head of the cards business with a foreign bank. The cost of each statement generated and posted is around Rs 10. In isolation, this cost may look negligible. But a bank with two million customers spends Rs 2 crore (Rs 20 million) a month on this communication and Rs 24 crore (Rs 240 million) annually. Then, there are card replacement charges that a bank has to bear when the validity expires.
Within 15 days of opening the registration process for Nano, its Rs 1 lakh car, Tata Motors has sold nearly 5,00,000 application forms, raking in Rs 15 crore (at Rs 300 each). Distributors associated with the Nano bookings said most of the forms were likely to translate into bookings.
Based on the current scenario, he classifies real estate as the highest in the risk grade, followed by infrastructure companies involved in construction, hotels, commodities and auto.
Deposit a minimum 500 grams of gold to a selected SBI branch, specify the tenure and deposit the metal. The interest rate for a 3-year deposit is 1 per cent, for four years it is 1.25 per cent and for a five-year tenure it is 1.5 per cent. And, on top of it, the income from this deposit is tax-free. "This is possible because when you deposit the gold, SBI gives you a gold bond. And there is no wealth tax on gold held in paper or electronic form," said CA Kanu Doshi.
ICICI Bank, the biggest credit card issuer, has made it conditional for some of the credit card applicants, who do not meet the bank's eligibility criteria, to open FDs under a scheme called Fixed Deposit Instant Credit Card.
Investment advisers believe that it makes little sense to swap assets (shares) accumulated over time for an expense (holiday). "Selling shares of a blue-chip company only reflects that you don't believe in it," said Gaurav Mashruwala, a certified financial planner.
Over the past few quarters, the auto industry's sales had been badly hit due to the recession. As a result, auto companies, distributors as well as direct selling agents are doing their best now to sweeten the deal for prospective customers.
Ensure maximum payout from the insurer when opting for a non-network hospital.
Chances are that some so-called investment consultant will confuse you with so many permutations and combinations that you will resign yourself to buying something that is not needed.
With fixed deposit rates coming down, bonds are once again proving to be an attractive investment.
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