The low interest rate period is basically a bad news for the conservative investors. At the same time, it is good news for borrowers. The concept of assured or fixed interest rate is a thing of past (taken for granted). In past, the investors posed their faith in small savings scheme with an assumption to earn relatively higher and assured interest rate. In other words, the interest rates were immune to fluctuations of interest rate cycle. The Small Savings Scheme interest rates remained untouched in past due to populist measures. But with the focus on economic growth, it is imperative to ... Read More
Tax Savings – Check the diff between Pre and Post Tax Return
Tax Savings is a magical word in India. It is easy to sell a financial product with a tag of "Tax Savings". Sometimes i fail to understand whether we invest to save tax or save tax by investing. I think it is former. It will not be an extrapolation to state that we are over obsessed to save tax. Here i am not suggesting that we should not save income tax. The pain point is when we select products for tax savings without financial calculations. In other words, most of the times we compromise on returns to save tax. Because of this reason, the traditional insurance plans like Money Back / ... Read More
Small Savings Schemes – Why Govt should cut interest rates
Small Savings Schemes are more of social welfare schemes. Recently govt mooted idea to cut interest rate of small savings schemes. Any revision in the interest rates of such schemes faces opposition from various quarters. The worst part is that this protest is without any logic and reasoning. As a citizen of India, we should understand the mathematics behind the decision. After thorough understanding, we can debate and discuss the merits or shortcomings. Also, we should review each and every decision 360 degrees. Any myopic view of the same will give biased approach. This post is not a ... Read More
Risk Free Equity Investment – Whether it is Possible or Not
Risk Free Equity Investment must be sounding bizarre statement. You must be thinking Risk Free Equity Investment is not possible at all. After recent turmoil in the stock market, i was wondering whether it is possible to invest in equity with ZERO risk. The answer is YES. Next thought in your mind is what's the big deal; i can invest in Capital Protection Funds. I agree, but here we are discussing direct equity exposure. As i shared in my post on capital protection funds that approach of a fund manager is bit conservative. Secondly, after recent developments debt mutual funds can deliver ... Read More
How To Destroy Your Wealth?
Wealth is an abundance of valuable Assets, Possessions or Money. To become rich, you have to build a wealth at a rate higher than the rate of depletion. The risk reward of building a wealth is equally balanced. Higher the probability of wealth creation more is the risk of losing it. As an investor, you have to adopt the method to build a wealth in which risk reward is more favorable for investors. For example, currently any investment in Real Estate is not favorable to build a Wealth. Investors who bought property in 2013 or 2014 are in loss. The loss will increase manifold if we consider the ... Read More
How the changes in TDS Rules will impact you?
There is a change in TDS Rules for RD (Recurring Deposit) and FD (Fixed Deposit) from 1st June, 2015. Not many people are aware of the change in TDS rules. It's a biggest misconception in India that if the TDS (Tax Deducted at Source) is not deducted then the tax liability is NIL. It's a huge tax leakage for Income Tax Department. The second misconception is contrary to 1st i.e. if the TDS is deducted then there is no further tax liability. This is true for taxpayers in 10% income tax bracket but not for taxpayers in 20% and 30% tax bracket. The third misconception is that interest from Fixed ... Read More