Be Wise Penny Wise

Mutual Funds are of two types Open Ended and Close ended

Open ended funds can be redeemed, bought or sold any time
the gains are subject to tax laws.

the close ended funds generally have a lock in they cant be bought or sold like open ended funds. they can only be redeemed after the time specified in the offer document.

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What are Mutual Funds?
Mutual funds are in the form of Trust (usually called Asset Management Company) that manages the pool of money collected from various investors for investment in various classes of assets to achieve certain financial goals.

Where does Mutual Funds usually invest their funds ?
The Mutual Funds usually invest their funds in equities, bonds, debentures, call money etc., depending on the objectives and terms of scheme floated by MF. Now a days there are MF which even invest in gold or other asset classes.

WHAT ARE VARIOUS TYPES OF MUTUAL FUNDS ?

1) EQUITY FUNDS / SCHEMES
2) DEBT FUNDS / SCHEMES (also called Income Funds)
3) BALANCE FUNDS / SCHEMES
4) LIQUID FUNDS /MONEY MARKET FUNDS / SCHEMES
5) SECTOR SPECIFIC FUNDS
6) INDEX FUNDS
7) TAX SAVINGS ELSS FUNDS.

VARIOUS OPTIONS
1) DIVIDEND PAYOUT ( dividend is declared and given to the investors)
2) DIVIDEND RE INVEST( dividend declared is re invested)
3) GROWTH.( there is no dividend declared but profits are accumlated)

More info on mutual funds follows in next post...

Insight 5 #

BEFORE SWIPING YOUR CREDIT CARD ...KEEP THE FOLLOWING IN MIND....& .. AVOID THE DEBT TRAP

During the vacation period or moving out with family Visiting Shopping areas has started items are bought even if not required immediately or even if we are short of money we go ahead & just swipe it. ALL THANKS TO PLASTIC MONEY.

In CREDIT CARD the credit period ranging from 30-45 days affords a sense of comfort which can often lead to
overspending.Many People just Swipe & forget it leading to a Debt Trap.

BEAR IN MIND THE FOLLOWING WHILST YOU SWIPE YOUR CARD.

Never Settle Your Payment Due on Your Card with MINIMUM AMOUNT DUE that is a Trap where in you will pay The Minimum Amount & The Bank will start Charging Interest On The Balance Due. You Can Pay The Minimum 5 %, & the rest will attract interest on the balance amount being a hefty 39-45% per annum. THEREFORE CLEAR YOUR OUTSTANDING ON THE CREDIT CARD AT THE EARLIEST & AVOID FALLING IN THE TRAP.
WITHDRAW FROM THE ATM USING THE CREDIT CARD ONLY IF THERE IS AN EMERGENCY ELSE NOT BECAUSE YOU WILL HAVE TO PAY CHARGES, & INTEREST MINIMUM 2.5% PER MONTH OF THE WITHDRAWN AMOUNT. THIS INTEREST STARTS IMMEDIATELY ON WITHDRAWL & NOT AT THE END OF FREE CREDIT PERIOD ON THE CREDIT CARD.
CO BRANDED OR LOYALTY CARDS :-

If you have ever visited malls and supermarkets, chances are that you have been offered a ‘membership’ or ‘loyalty’ cards a number of times. The store staff often cajole you into signing up for one – after all, there’s nothing to lose, and scores of points to be gained on every purchase made that will entitle you to discounts. Most of them score high on utility, no doubt, particularly if you shop there often. However, you need to be wary of cards that insist on you using them for spending – these could be co-branded credit cards that carry at least an annual maintenance charge, if not an enrollment fee.


Importance Of A No-Due Certificate:
ONCE YOU REPAY YOUR OUTSTANDING KINDLY ASK FOR NO DUE CERTIFICATE.
One of the most common pieces of advice doled out to borrowers, especially to those who close their loans under a compromise settlement with lenders, is to insist on a no-due certificate. It holds the key to the approval of your loan applications in the future. While the settlement may spare you reminder or follow-up calls from bank, it is only the no-dues certificate that will back your claim of having a clean slate.
Along with this, make sure your bank gives you an assurance that the settlement will be intimated to the credit information companies so that your credit record is updated accordingly. If, anytime in the future, your loan request is turned down because of an unfavourable credit history,youcanpro-ducethedocumentsasproofsofcomplete repayment.
SO KINLDY BEAR IN MIND BEFORE SWIPING YOUR CREDIT CARD.

PPF (PUBLIC PROVIDENT FUND ACCOUNT)

it is a good way to save for the sunset years.
ppf scheme one of the tax savings schemes preferred by many.

The sailent points of this scheme are as follows.

1) The Interest paid under this scheme is fully tax free.The contributions are eligible for deductions under section 80 C of the income tax act.

2) The Account can be opened in most of the Post Offices or Designated Banks in India.

3)The account has to be opened in single name.Nomination is a must. Nomination can be done in single name or two names specifying the shares.

4) The Rate Of Interest as for current financial year is 8.70% per annum which may change in future.

5) The Minimum amount which a person can deposit is Rs 500 per annum and the maximum one can deposit is Rs.150,000/-

6) The deposit can be in lumpsum or in 12 installments.

7) The Maturity/ Tenure of this account is 15 years. the 15 years are calculated based taking in to account financial years not calendar years.

8) There is not pre mature closure of account before 15 years.

9) Loan Facility is available after 3 years subject to the conditions governing the account.

10) Partial Withdrawls are permissible after the 7 years,subject to the conditions governing the account.

11) The Account can be extended for a block of 5 years after completion of 15 years.

Important News in times of India.

Insight 3 #

TO EARN MORE OPEN A SWEEPIN / SWEEP OUT ACCOUNT..

This account combines your savings bank account alongwith an Fixed or Time deposit at a bank or a financial institution, moving funds between them in a predetermined manner.
Sweep accounts are useful in managing a steady cash flow between a savings account used to make scheduled payments, and an investment account /fixed deposit / time deposit where the balance amount is able to accrue a higher return.

Many banks and financial institutions offer a sweep account service for personal customers and small business owners.

HOW IT WORKS?
given an example in a savings account you ask your bank to have say Rs. 10000/ for your regular expenses and transfer the rest to the fixed deposit. Take for example you have Rs. 100000 keeping Rs. 10000 the rest Rs. 90000 will be transferred to Fixed Deposit account. where in you will earn higher rate than the normal savings account.
now suppose you issue a cheque for Rs.15000. then Rs. 5000 will be taken over from the Fixed deposit account and the balance of Rs.85000 will earn the Fixed deposit interest.
many banks open zero balance savings accounts. also their fixed deposits are in the multiple of Rs. 1000/- so that it is easier to calculate and maintain the fixed deposit and balance in the savings account.
to know further it is much advised to visit your relevant bank and go through the terms and conditions as each bank has it own set of rules.

Insight 2 #

Keep a Reminder to RENEW YOUR FIXED DEPOSITS AT BANK At least 3 days before the F.D Maturity date.

Inquire with the Bank of the Interest Rates before submitting the FD for Renewal.

keep informed the bank of changes if any in regards to your contact details.

Insight 1 #

DIFFERENT TYPES OF OPERATIONS OR MODE OF HOLDING OF SAVING'S BANK ACCOUNT.

Most of us hold account in banks but are we aware of the different types of operating instructions or holding we need to give to the bank.In all cases the information in regards to operation of bank account are to be given at the opening of the account.

First and foremost only one type of instruction can be given to the bank of the many given below.

1) Single :- In a single mode there is only person holding the account and only that individual can operate the account.

2) Either or Survivor : to be opted when there are two individuals so that either of them can operate the bank account. In case of death of any individual the surivor can operate the bank account.

3) Anyone or Survivor :- to be opted when there are more than two individual so that anyone can operate the bank account. In case of demise of any one individual others can operate the same account.

4) Former or survivor :-In this type of joint account, only the first account holder can operate the account. The second depositor gets the right only on the death of the first after undergoing some basic formalities like submission of proof of death etc.

PLEASE NOTE IT IS IMPORTANT & MUCH ADVISED TO HAVE NOMINATION DONE IN ALL THE CASES. IRRESPECTIVE OF MODE OF OPERATION.

FURTHER THE ARTICLE WRITTEN ABOVE IS JUST FOR YOUR INFORMATION.

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