Category Archives: General

India Economic Growth Review & Trends of last 8 years

India Economic Growth Review & Trends of last 8 years

India Economic Growth Review & Trends of last 8 years

INDIA GDP Q2 of 2013-14 Quarter ended July to September 2013 growth rates latest and last released on 29th November 2013

Next #IndiaGDP Q3 of 2013-14 for Quarter ended October to December 2013 to be released on 28th February 2014

Comparison of last 2 Quarters , Details of last 6 Quarters and Annual growth of last 8 years

#IndiaEconomicGrowth #IndiaGrossDomesticProduct

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Private Banking V/S Investment Banking:

Private banking (PB) encompasses an array of services for high net-worth individuals. That might mean personal banking, but might also entail sophisticated services: currency hedging, asset disposition, tax advice, portfolio management, and mergers and acquisitions on a smaller scale.

Investment banking/corporate banking (IB) provides services, advice and products to large corporations around the world. That, too, might mean basic corporate banking, but might entail complex debt or equity financings, takeover defense, project finance, convertible-bond offerings, or equity share repurchases.

But sometimes the two intersect. The owner of a thriving, growing private company decides to go public. Private bankers and investment bankers will be involved–to advise the company on its IPO and to advise the owner and other shareholders how to manage its ownership of new public shares or new found wealth.

Courtesy: CFN

Compounding Interest Simplified

Compounding Interest

One Idiot – An IDFC Foundation Initiative to educate the youth of India to be financially independent.

This Short movie will definitely blow your mind, your way of looking at “Money” and “Wealth”. It teaches how One can become Wealthier with some simple rules !! It’s simply awesome!

Financial Investment Options for Beginners

Summarized below are the short-term and long-term financial investment options available for Indian investors.

 

SHORT TERM INVESTMENTS

1. Savings Bank Account

This is the primary savings product that anyone would have; however it provides low returns of 5 to 6 per cent. Any funds in this account makes sense only if the balance is sufficient to cover needs that are supposed to arise within a month as it offers highest liquidity.

 

2. Money Market Funds (also known as Liquid Funds)

Offer better returns than savings account without compromising liquidity 

Money market funds are a specialized form of mutual funds that invest in extremely short-term fixed income instruments. Unlike most mutual funds, money market funds are primarily oriented towards protecting your capital and then, aim to maximize returns. 

Money market funds usually yield better returns than savings accounts, but lower than bank fixed deposits. With the flexibility to issue cheques from a money market fund account now available, explore this option before putting your money in a savings account.

 

3. Bank Fixed Deposit (Bank FDs)

For investors with low risk appetite, best for 6-12 months investment period 

Also referred to as term deposits, this product would be offered by all banks. Minimum investment period for bank FDs is 30 days. 

The ideal investment time for bank FDs is 6 to 12 months as normally interest on bank less than 6 months bank FDs is likely to be lower than money market fund returns. 

It is important to plan your investment time frame while investing in this instrument because early withdrawals typically carry a penalty. 

 

LONG TERM INVESTMENTS

1. Post Office Savings Schemes (POSS)

Low risk and no TDS 

POSS are popular because they typically yield a higher return than bank FDs. The monthly income plan could suit you if you are a retired individual or have regular income needs. 

Besides the low (Government) risk, the fact that there is no tax deducted at source (TDS) in a POSS is amongst the key attractive features. 

The Post Office offers various schemes that include National Savings Certificates (NSC), National Savings Scheme(NSS), Kisan Vikas Patra, Monthly Income Scheme and Recurring Deposit Scheme.

 

2. Public Provident Fund (PPF)

Best fixed-income investment for high tax payers 

PPF is a very attractive fixed income investment option for small investors primarily because of – 

1. An 11% post-tax return – effective pre-tax rate of 15.7% assuming a 30% tax rate
2. A tax-rebate – deduction of 20% of the amount invested from your tax liability for the year, subject to a maximum Rs60,000 for a tax rebate
3. Low risk – risk attached is Government risk 

So, what’s the catch? Lack of liquidity is a big negative. You can withdraw your investment made in Year 1 only in Year 7 (although there are some loan options that begin earlier). 

If you are willing to live with poor liquidity, you should invest as much as you can in this scheme before looking for other fixed income investment options.

 

3. Company Fixed Deposits (FDs)

Option to maximise returns within a fixed-income portfolio 

FDs are instruments used by companies to borrow from small investors. Typically FDs are open throughout the year. Invest in FDs only if you have surplus funds for more than 12 months. Select your investment period carefully as most FDs are not encashable prior to their maturity. 

Just as in any other instrument, risk is an embedded feature of FDs, more so because it is not mandatory for non-finance companies to get a credit rating for this instrument. 

Investors should consciously (either though a credit rating or through an expert) select the companies they invest in. Quite a few small investors have lost their life’s savings by investing in FDs issued by companies that have run into financial problems.

 

4. Bonds and Debentures

Option for large investments or to avail of some capital gains tax rebates 

Besides company FDs, bonds and debentures are the other fixed-income instruments issued by companies. As a result of an illiquid secondary market and a lack-lustre primary market, investment in these instruments is largely skewed towards issues from financial institutions. 

While you might find some high-yielding options in the secondary market, if you do not want the problems associated with bad deliveries and the transfer process or you want to invest a large sum of money, the primary market is the better option.

 

5. Mutual Funds

Have you ever made an investment in partnership with someone else? Well, mutual funds work on more or less the same principles. Investors pool together their money to buy stocks, bonds, or any other investments. 

Investing through mutual funds allows an investor to – 

1. Avail the services of a professional money manager (who manages the mutual fund)
2. Access a diversified portfolio despite making a limited investment

 

6. Life Insurance Policies

Don’t buy life insurance solely as an investment 

Life insurance premiums, depending upon the policy selected, include the costs of – 

1) death-benefit coverage 
2) built-in investment returns (average 8.0% to 9.5% post-tax)
3) significant overheads, including commissions. 

This implies that if you buy insurance solely as an investment, you are incurring costs that you would not incur in alternate investment options. 

It is, however, important to insure your life if your financial needs and profile so require.

 

7. Equity Shares

Maximum returns over the long-term, invest funds you do not need for short-term requirements.

There are two ways in which you can invest in equities- 

1. Through the secondary market (by buying shares that are listed on the stock exchanges) 
2. Through the primary market (by applying for shares that are offered to the public) 

Over the long term, equity shares have offered the maximum return to investors. As an investment option, investing in equity shares is also perceived to carry a high level of risk. 

Grow Your money by “Disciplined Investments”..

Grow Your money by "Disciplined Investments"..

1. Set your financial objectives: Following an in-depth consultation, your Financial Advisor can help you develop an investment policy based on your goals, time horizon and risk tolerance.
2. Define an investment strategy: Based on your investment policy, your Financial Advisor can recommend an investment strategy or an asset allocation model designed to provide proper diversification.
3. Evaluate and select investments: Your Financial Advisor works with you to help identify the investments and investment program that may be most appropriate given your asset allocation strategy.
4. Review your portfolio: Your Financial Advisor consults with you over time to determine whether short-term or long-term changes are needed in the asset allocation strategy or investments in your portfolio.

Never Spend your money . . .

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