My client retired last year from a PSU. He is eligible for inflation adjusted pension. This is more than enough to take care of his monthly expenses. But he is not happy after retirement. He is not feeling that he crossed 60, because he is very active and is bubbling with energy. But in the last 35 years of his service with an oil marketing firm, he was living within the organisation, rising in ranks to the position of executive director at the time of retirement. All his contacts are within the organisation, and he was isolated from the outside world. Once he is out of the job and the office quarters, he does not know how to spend his time to make him active.

My uncle is in a dilemma. He is aged 75 and is running a small shop next to his house. Daughter is married and settled nearby. Son is in Canada. Uncle can stay with his daughter, or they will take care of him. But he and his wife are concerned about how they will spend time without doing anything. Even at 75, he is not ready to retire.

Another client knows that he needs 3.6 Crores for his retired life. He is already having 5 Crores at 58; yet, he is worried as he is nearing his retirement.

Nikhil retired from his IT job last year. He is having lot of time but does not know how to spend it. Someone introduced him to day trading. He has already lost 20 Lakhs in his portfolio and is in an unbelievably bad mood now.

Dr. Senthil is an NRI doctor in Dubai aged 59 and is planning to return to India next year after retirement. Though he is having more than enough liquid assets to take care of his retirement, he is worried about the income tax issues in India.

My neighbour is retiring next year. He is very much worried about what he will do when the monthly salary stops. Though he knows that he is having enough money, he is confused how to ensure regular income flow after retirement.

My cousin retired from a bank 5 years ago. After retirement, he is associated with the local church where he is a trustee. Everyday morning, he will be in the church at 7 am. He returns home for breakfast and lunch but will be active in the church till 7pm. He is happy with this active life.

If your monthly expenses are 50,000, you need 1.8 Crores at 60 to live till age 90. Assuming that there is no further liability towards children, you need not worry about finances if you have 1.8 Crores with you. It will ensure inflation adjusted monthly withdrawal of 50,000 per month for the next 30 years. I have assumed 6% inflation and 6% return from the retirement corpus of 1.8 Crores.

Yet, I see many retired people who are worried. So, there is something more to retirement than just financial adequacy.

Let me explain 5 ways to have an active and satisfying retired life.  You can add more to it.

Try to find out a stream of work which you can continue till you are active. Identify activities that appeal to you from age 40 – 45 and nurture them.

 Suman started practicing Yoga from age 40. From age 50, he started Yoga training sessions for his friends and colleagues, and now at 58, he is a Yoga Guru teaching more than 400 students online and offline. He is now earning more than his last drawn salary and is physically active.

Satish was working with ISRO as an engineer. At age 45, he found an opportunity to coach BTech students trying to get admission for MS course abroad. He started it in a small scale and gradually scaled up through online mode. He is now earning much more than his government job and is highly active after retirement.

Ajit started private tuition for school students in the evenings, along with his wife from age 45. Now both are managing it even after retirement. They are regularly active, and it is very remunerative also.

Renu started online sale of several types of Tea Dust along with her Software job. She is now planning to scale it up after retirement.

Keeping yourself physically and mentally active is important after retirement.  Try to identify an area that appeals to your taste and try to create a business out of it in small scale. Think of something from your hobbies, passion or likes, which you enjoy doing. This will ensure that you are active and generate income even after retirement. There are many part time assignments which you can try during your working life and then scale up after retirement. Avoid capital intensive business and business with long gestation period. It is better to do it solo instead of doing with partners. Anything which can be scaled up online is better in the long term.

Try to create friends in the age group -10 and +10.

Rajesh is always happy with his friends whether he is in office or at home. He developed a friend circle both in his office and near to his house. Good friends always surround him.

This is extremely important for a happy retired life. We need friends to share our concerns/ ideas at all ages especially after retirement. Once we stop going to office daily, we need someone to spend time, share the concerns. Getting good and trustworthy friends is not easy. You cannot create friends overnight. Like Rajesh, you must plan it earlier. It is better to have friends in your age group, some of them senior to you and some junior to you in age. If you are aged forty, try to have friends in the age group 30-50. You can learn many things from both seniors and juniors.

Try to associate with any organisation as per your taste

Raghu is active with the local Kerala Samajam in Mumbai after his office hours and weekends. He is associated with it actively. I am sure, he will be fully occupied with it after retirement.

Man is a social animal. He needs socialization. Associating with any organisation, where you can contribute even in a limited way, can keep you active. This helps you in getting likeminded friends which is difficult otherwise. You can select local associations as per your taste. There are many choices like Yoga Club, Laughter Club, Science Club other than the big names like Rotary etc.

Find a way for giving back to society

Krishnan is aged seventy-five now, He is my client and is a sponsor of two needy kids in my program – Kid’s Education and You (KEY). He is supporting education of two kids who are in the first standard now. More than his monthly support of 2000/- to both these kids, he finds time to talk to those two kids and their parents regularly to see their progress.  He told me that he is keen on seeing both these kids settle in their life. It will keep him active and optimistic for the next 12 years!

Once you are settled in life with your job and finances, try to develop the habit of giving back to society. Start in a small way and increase it gradually as your income increases. It can be in cash or through volunteering your time and efforts. Everybody can do it in one way or other. You need not be rich to do it. It is your standard of giving, which matters. When you do this, the satisfaction you get is amazing and it can really help you in finding your real purpose in life. While looking back during retired life, you will enjoy your efforts and results.

Develop healthy habits, routines to take care of yourself – Nutrition/ Yoga/ meditation/ Exercise

My friend Suresh developed some blood pressure issues at age 30. Doctor advised him to go for 30 minutes brisk walk in the morning. He is continuing it for the last 25 years.

Developing good habits at an early age is good for your physical and mental health. Walking daily for 30-40 minutes, practicing Yoga and meditation for 10 minutes etc can really help. At least from age 45, develop a healthy eating pattern. It is worth consulting a dietitian in most cases to reduce the intake of carbohydrates and adjust the food pattern which suits you.

Retired life can be golden years in your life if you plan for it carefully. Do not miss to enjoy the sunset years in your life.

To be disciplined, we need perseverance; and to be perseverant, we need discipline too! Perseverance is the highest discipline!

How often we have heard our parents/grandparents talking about saving small amounts from their income into RDs/FDs over 35-40 years of their work life and accumulating a corpus for our education needs or their retirement! It is astonishing to think of how a big corpus is built out of the Employee PF through these minor deductions from income deposited and compounded over years!

In times gone by, perseverance & discipline were seen to be virtues – to be cultivated & inculcated in life. But today it’s a different trend – “Reduce body weight by 10Kg in a week” or “Get rich in a month” are words that attract. As the famous saying goes “Rome was not built in a day”. Anything of real value & worth takes discipline & perseverance to build. Quick-fix does exactly what it says – quickly puts you in a fix!

The anti-thesis to above virtues is the need for instant gratification – for example the urge to indulge in a high calorie treat instead of a healthy snack or the desire to hit “snooze” button rather than get up early to exercise! Lasting success is built on pillars of regular healthy habits, routines and avoiding temptations – it works although it appears boring.

Personal Finance calls for us to start early, get into regular investing routine, form habit of reviewing where you stand vis-à-vis your goals and most of all keep investing & stay invested – in short, the only virtues that matter are Discipline & Perseverance! Stick to it and stay the course – there is no other sure-shot way of getting there.

Don’t fall for the tales narrated by some of how they got rich overnight. For every such story shared, there are hundreds of actual stories of how they lost even what they had – the difference being that such stories are never shared nor is anyone interested in hearing them.

Words of the famous Indian cricketer Rahul Dravid:

“My wife and I have built a new home with a lovely garden which houses lovely bamboo trees. I got reading on the Chinese bamboo and learned that the tree takes 5 years, 3 months to grow to its whole height of 80 feet. Yet, for the first 5 years, you can only see a tiny green shoot, but in the next 90 days, it grows into a full-fledged tree. But in those first 60 months, it is growing its strong network of roots underground, to support the tree. In an era of instant gratification, we settle for shorter trees, but remember patience has its reward. These are your years of growing that strong network of roots but be sure when you finally achieve your success, people will call it ‘overnight success’. If only they knew of the Chinese bamboo!”

SEBI has initiated many awareness campaigns in this regard.

 As a part of this campaign, we wish to inform our valued customers, that the digital era is a double-edged weapon, and we as users have to stay vigilant and adhere to several precautions while using the Internet and transacting online.

The link covers the important aspects you must know to avoid fraud/theft etc while transacting online.

Cyber Security Awareness – Download

Complexity bias – our tendency to look at something that is easy to understand, or look at it when we are in a state of confusion, and view it as having many aspects that are difficult to understand. When faced with two competing options, we are likely to choose the more complex one.

Myth of Quality – That anything complex is well thought out by intelligent people & therefore better! This is exploited by smart people in deliberately converting simple concepts into complex structures that are hard to comprehend and therefore create a myth of superiority.

Simple does not mean Easy – it just means having a clear view after cutting away the insignificant things, distractions or pointless problems which are just energy wasters.

In personal finance, people look to invest their hard-earned money in multiple options including complex ones like AIF, Portfolio Management Scheme (PMS), F & O, Commodities, Forex and so on without proper understanding. In other words – FOMO – Fear of Missing Out! In the process, they end up burning their fingers badly.   What they really need to do is to understand some simple governing principles of Personal Finance that can make all the difference.

Regular or systematic investments in the simple basic instruments like PF, PPF, FDs, RDs, MFs etc over a long period of time are much more critical than generating the “highest returns” possible.

The power of Compounding – returns generate more returns thereby building required corpus. Again, the amount invested, and time are crucial – not the highest returns.

Keep it Simple

Open a Public Provident Fund (PPF) account at the start of your career and invest any amount between 500 -1.5 Lakhs per year in it. Keep extending the PPF after 15 years and even beyond retirement.  This is the only investment which offers tax free withdrawal, which you can continue to hold till you live.

Start Systematic Investment Plan (SIPs) in couple of equity mutual funds for the long-term goals. Review the fund performance yearly and increase the investments as your income increases.

You can consider Recurring Deposit (RD), Fixed Deposits, Debt Mutual Funds etc for the short-term goals.

Backup plan

You need Term Insurance as a backup plan – This will come to the support of the family in case of unfortunate and untimely death of the earning member/s of the family. Here also there are complex options like term policy with return of premium, limited premium payment options, term insurance till age 100 etc which are not good for you.  Purchase online term policy as per the expense replacement method of calculation.

You also need a family floater health insurance policy beyond your corporate health insurance. This is the only way to ensure health cover beyond retirement till you live. Opt for a combination of base policy & super Top up policy to reduce the premium outgo.

Personal accident policy & critical illness policies can offer additional layer of protection.

You can also purchase insurance for your property including the contents.

Beyond this, avoid all forms of insurances including ULIPs, which are not good. Don’t purchase endowment, money back, child policy, pension policy etc.  They are not flexible and offer poor returns.

 Simplify further

Ensure that you are making proper nomination in all investments and insurances. Nominate the right person to avoid confusion later.  If you have multiple real estate assets, it is better to go for a will to ensure smooth transition in your absence.

Involve your spouse and grown-up children in the personal financial discussion in the family.

Just keep 1-2 bank accounts only – one with SBI and another with a leading private sector bank. Avoid too many bank accounts.

File the income tax returns every year much before the due date of filing the returns. It is better to use the services of a local Chartered Accountant for this to avoid any mistakes. It will not cost you more than 2000-3000 and it is worth.

Proper asset allocation and review of portfolio once in a year is very important.  There should be a mix of equity & debt in your portfolio. Allocation to equity must be gradually reduced as you near the goals through rebalancing.

If you cannot do it yourself, get professional support of a SEBI registered Fee Only Financial Planner.  You can get details of such planners from www.feeonlyindia.com

As Albert Einstein said “Any intelligent fool can make things bigger and more complex- It takes a touch of genius and a lot of courage to move in the opposite direction”

His granddaughter just joined her first job with a consulting firm. He wants her to avail our services now so that she will not make any financial mistakes like her father & grandfather. Mr. Sharma told me “Melvin, since our family has placed total trust in you over the last 10 years, I have asked her to learn personal finance basics from you”.

Yes – Trust or lack of trust is an issue now a days.

1. Can you trust your family doctor?
2. Can you trust your neighbour?
3. Can you trust your boss?
4. Can you trust your partner?

Everyone has their vested interest and priorities, which in most cases is not in your interest. Dealing with them, we must be careful!

In this age of fast paced life, with fast travel & faster connectivity leading to tumultuous changes in every sphere, especially so in geo-political and economic scenario, the financial and financial services industry has also transformed massively & irreversibly. Technological advances and lifestyle changes have led to immense changes in the manner business is done, in a way that wasn’t imaginable a decade or two ago.

In India, the game had always been of catch-up with the developed world; but of late in many spheres our country is becoming the pioneer leading to overall improvement in standard of living – the shift from needs to wants and now to luxury.

In parallel, with long-term trend of drop-in interest rates as also inflation, the practice of previous generations working till age 60, saving up in fixed return instruments and then living off the bank interest in the twilight years – is no longer viable. This realization, that savings must make way for investment, along with coming of age of the Indian economy, as also reflected in the stock markets and superior investment avenues like Mutual Funds, has led to increasing participation of substantial population in equity.

However, change is always difficult to comprehend and accept – and TRUSTING hard earned savings/ income into avenues without guaranteed returns (as we conservative-minded Indians were used to), is easier said than done.

Finvin Financial Planners started operations on 15^th August 2010 purely with ONE NOTION, ONE PRINCIPLE – to breach that trust deficit, and provide genuine unbiased financial advice at affordable fee – with ZERO vested interest! Hence our tag line – Your Trusted Partner for all financial needs!

Having rich experience of more than 3 decades in the Financial Services industry, I have been part of this evolution, impacted both personally and professionally by the transformation. The changed scenario of investment vs saving, criticality of goal-based investing, proper asset allocation and rebalancing, all require a disciplined & focused approach to financial planning and execution. Due importance needs to be accorded to long term goals like child higher education/marriage, retirement, as also shorter-term needs such as purchase of car/house or vacation – and each need calls for differentiated approach and planning.

In this age of increased longevity, higher standard of living, decreasing work years and increasing retirement tenures, coupled with galloping education & medical costs, professional financial advice for each aspect is no longer a matter of choice; it’s a must! Having witnessed at close hand, the short-term outlook of immediate gains rather than customer benefits, employed by the distribution agents of various financial instruments, Finvin Financial Planners has strived to offer a professional no-conflict approach to planning for all financial needs.

To ensure 100% conflict free advice, we are not involved in distribution of any financial products. We suggest online insurances and direct plan in mutual funds etc which clients can purchase online without any agents.  Finvin is a SEBI registered Investment Advisor with SEBI registration number INA000015534.

On our 12^th year, we feel honoured to have featured along with other 5 leading financial planners in India in the recently launched book “The Wisest Owl” by Mr. Anupam Gupta.  This book is useful for those who want to become their own financial Planner.

We conduct a detailed analysis of each customer’s age, family, occupation, income, expenses, risk appetite, insurance requirements, passion, aspirations for child education/marriage, home, vehicle, vacation and of course the all-important goal of peaceful retirement – and thereafter offer a detailed plan to achieve these goals within the timeframes. Our annual reviews help the client understand where s/he stands with reference to the original plan, any changes in the circumstances as also rebalancing to ensure proper asset allocation.

In their busy work & life schedule, most are not able to devote required time and energy to perform the above activities, which we perfectly understand. Our expectations from our clients are: (a) frank sharing of actual information regarding above facts and (b) Discipline in sticking to the plan laid out once they understand and agree.

Over these 12 years, Finvin has grown to a 4 -member team now.  With this highly qualified and experienced team, it is our pleasure to serve hundreds of clients across the globe who have benefited from our conflict-free advice. The process is 100% online and we are having clients in all cities in India and most countries where there are NRIs.

On our 12^th anniversary, I take this opportunity to thank all our clients and well-wishers for their faith in us. Let’s try our best to serve you. We have always had the clients’ best interests in mind – and we will always be Your trusted partner for all financial needs!

There are many reasons for this correction. High inflation, increasing interest rate, war between Ukraine and Russia are the main reasons.

If you have invested in equity mutual funds, you are seeing its impact on daily Net Asset Values of the funds.

Is it better to stop investing in mutual funds? Can I withdraw my investments even at a loss?  Can I stop my SIPs and start later? Many new investors are worried.

Is it a reason to worry? Who should worry about this market crash?

Let’s understand it from the perspective of different type of investors.

Senior Citizen, retiring now at age 60

In his case, the only financial goal is Retirement Planning. Let’s assume he is looking for an inflation adjusted monthly withdrawal of 50,000 for the next 25 years.   He needs 1.5 Crores for this.  If he is having a saving of just 1.5 Crore, he should invest it safely for his monthly expenses. I don’t suggest more than 10 -15% of this portfolio in equity. In this case, expect the portfolio return equal to the rate of inflation (zero real rate of return). I am assuming both at 6%.

He need not worry about this market crash. Why?

Let’s assume he has invested 85% of the portfolio in debt and 15% in equity mutual funds. He will be withdrawing 50,000 per month from this debt portfolio.  Every year, he can increase the monthly withdrawal by 6% to offset inflation. This 85%will be invested in Senior Citizens Savings Scheme, Prime Ministers Vaya Vandana Yojana, Post Office Monthly Income Scheme, RBI Floating Rate bonds, Debt Mutual funds and Fixed Deposits.  They are not impacted by this equity market volatility.   He will not be withdrawing anything from the 15% of the equity portfolio for the next 15 years.  During these 15 years, he will be gradually moving this equity also into debt. By age 75, he will be having a 100% debt portfolio.

Is there any reason for him to worry about this market crash now? No, because he is not going to withdraw from equity in the next 15 years. If the investment period is 15 years, I don’t see any reason why he should worry about this volatility. In the next 15 years, there will be many bad years, many excellent years and many average years. This will give him enough room to shift from equity to debt in a phased manner.

If he is having savings of 2.5 Crore at retirement, he can be aggressive with the excess 1 Crore as per his risk-taking ability. He is not going to consume this amount in his lifetime, and it is going to be for the benefit of his children.

If he is not having 1.5 Crore, he can take the risk of keeping around 20% of the portfolio in equity in the initial years, provided he is an experienced equity investor for many years and is comfortable with the volatility.

If he is not having any exposure in equity till age 60, I don’t suggest equity to him at age 60. He cannot digest the volatility with equity. This can make him panic when there is a market correction like this.

Middle aged investor aged 45

Let’s assume that he is having a child aged 15 and is in 10^th Class.  He needs big money for the higher education of the child in 2 years. The required amount for this goal should be in debt by this time. If he is keeping the required amount in equity now, he must worry about this market crash. Ideally, he should have rebalanced the portfolio for this goal gradually in the last 10 years and the amount should be in 100% debt 3 years before the goal. You cannot switch everything into debt exactly 3 years before the goal, it should be gradual.

He is planning to retire at age 55. This goal is 10 years away now.  He is having PF & PPF which is debt portion of the retirement portfolio. As per his risk profile, he is planning to keep 25% of the retirement portfolio in equity after age 55 and reduce it gradually.  He should plan to reach this ideal asset allocation in a phased manner in the next 10 years. He cannot do it altogether at 53 or 54, because market movement cannot be predicted.

If he is following this gradual rebalancing strategy, he need not worry about this market crash.

Young Investor aged 30

Let’s assume he is having a child aged 2 years. Higher education goal (graduation) is 15 years away. He can be aggressive with this goal if he understands equity volatility and is having the capacity to take risk.  He can start with a 60% equity portfolio and gradually reduce in the next 12 years. By the time child is aged 14, allocation to equity should be zero and the entire amount should be in debt. In this case, why he should be worried about the recent market crash?

He is planning early retirement at age 55.  This goal is 25 years away.  He is having compulsory PF contribution and is having a PPF where he invests 1.5 Lakhs per year. Other than this, entire monthly investment can be in equity to start with.  In the next 25 years, he can gradually reduce the exposure to equity through rebalancing.  But don’t wait till age 53 to shift to debt. This will backfire if there is a market crash like this closer to his retirement.

Gradual rebalancing from equity to debt will help you like a parachute for a safe landing. This is the essence of equity investing.

Who should worry about this market crash?

In the first example, if the senior citizen is keeping more than 30-35% of the retirement portfolio of 1.5 Crore in equity, he should worry.  If the bearish phase continues for couple of years, he will find it difficult to sustain the planned monthly withdrawal.

In the second example, if he is keeping the amount for higher education in equity, he will face problem. Chances for recovering this loss in the next 2 years is remote. He may think of education loan for the shortage.

In the 3^rd example of young investor, he need not worry even if he is bit higher on equity than he can digest. This is because, he is having time on his side to recover the loss.

Greed is the root cause of this issue

Equity can give decent return in the long term if you are a disciplined investor.  Investing in equity mutual funds regularly irrespective of the market level is the best option for a salaried person to create wealth in the long term.

Many investors started investing in direct stocks after the 2020 market correction. The period after this crash created many self-styled fund managers!  They are thinking that they can make higher return regularly if they invest in stocks!  If you think you can make higher return than mutual funds year after year, you are now in a wrong job!

Please note that stock selection is not an easy job. Everybody cannot master it along with their full-time job. Why not outsource this to an expert at a nominal fee? This is what mutual funds offer. I am a happy mutual fund investor for the last 22 years and is satisfied with the return from it.  I feel paying 1% annual fund management charge to an experienced fund manager is better than I directly investing in stocks!

If you maintain a well-diversified portfolio with both equity & debt as per your risk profile, risk taking ability and duration to the financial goals, there is no reason to worry about the market crash.  You can continue with your monthly investments without any worries. In such case, there is no need to check the fund value daily only to increase your blood pleasure during bearish phases like this.  An yearly review of funds and gradual rebalancing is the only job to do.

Pandemic has created lot of awareness .

There are many important points to analyse before purchasing these policies.

You cannot purchase these policies like any items on Amazon or Flipkart.

Unless you analyse & purchase, you may end up in purchasing a wrong policy.

I am attaching videos on both – Term Insurance , Health Insurance.

I have covered Dos and Don’ts while purchasing these policies.

You can watch these videos when you are free so that you can purchase the right policy.

Watch it by clicking on below Links

Term Insurance Simplified Video

Health Insurance Simplified Video

1. You can sign up through Facebook/Google or email Id and Password
2. Complete your KYC by adding your PAN number.
3. Fill your details like address, Nominee, Bank account details etc. (You can complete it in the beginning, or it will ask for the same while investing.

For investment in SIPs (Screenshots below)

1. Click on invest (Right to Home)
2. Click on MF (below explore)
3. Enter the name of fund in search funds. You can use category & subcategory for easy selection.
4. Click on fund name
5. Add SIP amount (as suggested in the plan). (Lumpsum means one time investment)
6. Add to Cart
7. Repeat the process for all mutual funds where you want to register SIP.
8. Once the process is complete for all mutual funds scheme, click on Cart button
9. Select folio number on the left and SIP date for all mutual funds schemes
10. Place order
11. It will redirect to your bank account
12. First instalment is deducted immediately, the next instalment will deducted as per the SIP date (Please note it takes around 30 days for deduction of next instalment)

Mandate for SIP – It will ask for a mandate of 1 Lakh per month for deduction of SIPs, you can approve that. Mandate is approved by your bank for next instalments of SIPs, and it takes around 3-4 days for mandate approval. Even if you are giving mandate of 1 Lakh, the amount will be deducted only as per your SIP instructions. If you have registered for 30,000 only through SIP, it will deduct 30,000 only.

In case, you have monthly SIPs of more than 1 Lakh, you can increase the mandate limit.

For Systematic Transfer Plan STP (Screenshots below)

1. Invest lump sum amount in liquid mutual funds as suggest in the plan (the process would be same as above- You would have to add lump sum amount here). After 7 days, you can register for STP (to avoid exit load from liquid fund)
2. Click on SIP, STP, SWP (on left hand side – below Manage Folio)
3. Click on STP and then add STP
4. Choose mutual fund scheme from which you want to start STP i.e., liquid mutual fund (Transfer from)
5. Choose mutual fund scheme to transfer i.e., equity mutual fund (Transfer to)
6. Select Folio Number (Folio number of Transfer from)
7. Select Start date, amount, and frequency (Monthly frequency)
8. Select number of instalments
9. Click on Continue

For Systematic Withdrawal Plan (SWP)

1. Once the amounts start showing in your mutual funds scheme, click on SIP, STP, SWP (on left hand side – below Manage Folio)
2. Click on SWP and then add SWP
3. Choose mutual fund scheme from which you want to withdraw i.e. liquid/debt mutual fund (Withdraw from)
4. Select Folio Number (Folio number of Transfer from)
5. Select Start date, amount, and frequency (Monthly frequency)
6. Select number of withdrawals
7. Click on Continue

Import Portfolio (This will help you in seeing all your existing investments in mutual funds in a single platform)

1. For importing portfolio to Kuvera- Follow the process as mentioned in website
2. Click on import portfolio
3. Click on import now
4. Follow the instruction
5. The link for CAS statement is – https://new.camsonline.com/Investors/Statements/Consolidated-Account-Statement

For Switching to Direct Plans

1. Go to portfolio (Home Page – below dashboard)
2. Select the mutual fund scheme
3. Click on mutual funds scheme
4. Click on Redeem/Switch (depending on mutual fund scheme)
5. If it is same AMC – opt for switch option. If it is different AMC- opt for redeem option
6. While redeeming/switching- It will show trade smart option
7. Trade smart option calculates the exit load and capital gains (Long term and short term)
8. It is advisable to opt for the option as it helps in calculating exit load and capital gains (The option is chargeable – Rs. 300 one time)
9. There is no exit load in equity mutual funds after 1 year. It is advisable to redeem/switch only after 1 year.

Account statement from the respective fund houses.

Please ensure that you are receiving the account statement for each investment from the respective fund houses within 3-4 working days. This is the proof that your money is invested. Please check the details and confirm they are correct.

 Disclaimer

Arevuk Advisory Services Pvt Ltd (tradename: Kuvera) is a SEBI Registered Investment Advisor (INA200005166).

Finvin Financial Planners is not associated with Kuvera in any form. We suggest Kuvera as the User Interface is good and there are no hassles to invest, switch or redeem. If you are not comfortable with Kuvera, you can use other platforms like Groww, Zerodha, Paytm money, MF Utility etc.

You can choose any platform which allows you to invest in direct Plan of mutual funds.

It is a long term debt investment which can help the girl child for her higher education and marriage.

Sukanya Samridhi Yojana – Features

Under this scheme, the account can be opened for a girl child in the age group of 0 -10. The account can be opened by parents or legal guardian. The yearly investment is flexible and you can pay any amount between 250 – 1, 50,000 as you like in lump sum or in installments. If you don’t invest the minimum amount of 250 in a year, there will be a penalty of Rs. 50/- to continue the account. You can invest money for 15 years from the date of opening. The account will mature after 21 years from the date of opening of the account. In case of early marriage, the account will be closed on marriage after age 18.

Is there any early withdrawal option in Sukanya Samridhi Account?

Yes, 50% of the accumulation can be withdrawn after age 18.  This can help funding the child’s higher education.

What is the interest rate in Sukanya Samridhi Account – Is it fixed?

The interest rate for this scheme will be declared by government every quarter. The interest rate is 7.6% as on date.  Interest will be compounded annually.

What are the tax benefits under Sukanya Samridhi Account?

The investment upto 1.5 lakhs in a year will qualify for tax deduction under Section 80C of the Income Tax Act. But what is more attractive is the taxation of this scheme on maturity. The maturity amount including interest is totally tax free on withdrawal like PPF.

Can NRIs invest in Sukanya Samriddhi Yojana?

No, NRIs cannot invest in Sukanya Samriddhi Yojana. However, if the girl child is an Indian Resident, parents can open Sukanya Samriddhi Account for her.

If you already have Sukanya Samriddhi account the residential status of the girl child changes to NRI in future, you need to close the account.

Is it worth investing in Sukanya Samridhi account for your daughter?

This depends on your risk profile. If you are very particular about debt investments and don’t want to invest in equity you can think of this because, it will be better than other bank deposits and insurance schemes. The tax free withdrawal is an attraction here. But don’t think that the interest rate will continue to be in this range for such a long term. As per the interest rate in the country, it will also come down in the long term.

What you can do?

It is not advisable to create the entire amount for your daughter’s needs by investing in this scheme. If your daughter’s higher education is 15 years away, you can earn better returns by investing in equities through mutual funds. But you should not invest the entire amount in equities. For the debt portion, you can consider this scheme. When you are nearing the goals like higher education and marriage, you can reduce your allocation towards equity and can increase it towards debt. This account can be useful for this. You can withdraw 50% accumulation after age 18 for her higher education and the balance amount can be withdrawn for her marriage.

Along with an SIP in equity funds, this can be a suitable investment scheme for your daughter.

If you are looking for answer to a particular questions regarding Sukanya Samriddhi Scheme, here is the list of FAQs for your ready reference.

Who is eligible for Sukanya Samriddhi Yojana?

A girl child (Indian Resident) between the age of 0-10 years is eligible for Sukanya Samriddhi Yojana.

What is the minimum amount for Sukanya Samriddhi Yojana?

An account can be opened by depositing Rs 250 with the required documents (Note: earlier, the minimum amount was Rs. 1000). The minimum amount that can be deposited in a Sukanya Samriddhi Scheme is Rs. 250 per annum. The maximum limit is Rs. 1.5 Lakhs per annum for an account.

What is the maturity period of Sukanya Samriddhi Yojana?

The maturity period of Sukanya Samriddhi Yojana is 21 years. For example: If you open an account when the girl child is 8 years old, the account will mature when she will turn 29.

When can we withdraw money from Sukanya Samriddhi account?

 You can withdraw money from Sukanya Samriddhi account when the girl child turns 18 years old. There are 2 rules for withdrawal:

• Partial Withdrawal – Maximum 50% of the balance (of the preceding year) can be withdrawn for the higher education of girl child.
• Complete Withdrawal – After the completion of 21 years from date of opening the account or on marriage of the girl child, whichever is earlier. However, the account holder needs to provide an affidavit stating that she is not below the age of 18 at the time of closing the account.

How can we close Sukanya Samriddhi account?

 In the unfortunate event of death of the account holder, the scheme can be closed immediately by producing the death certificate.

Yes, the Sukanya Samriddhi account can be closed after 5 years. The pre-closure request can be made after 5 years of opening the account. This request is only considered under extreme compassionate grounds like life threatening disease.

Is Sukanya Samriddhi Account allowed under Section 80C?

Yes, Sukanya Samriddhi Yojana is part of 80C. However, the maximum limit for exemption is 1.5 Lakhs under Section 80C.

Is interest on Sukanya Samriddhi account taxable?

No, the interest on Sukanya Samriddhi account is not taxable. The scheme comes under EEE category

• Exempt at the time of investment
• Also Exempt at the time of accumulation
• Exempt at the time of withdrawal.

How many accounts can be opened?

Maximum 2 accounts can be opened for two girl children. You cannot open 2 accounts for one girl child.

You can open third account in the event of birth of twin girls as second birth or if the first birth itself results into three girl children, on production of a certificate to this effect from competent medical authorities where the birth of such twin or triplets occurred.

Can I deposit more than 1.5 lakh in Sukanya Samriddhi Yojana?

No, the maximum limit is 1.5 Lakhs per account. You cannot deposit more than 1.5 Lakhs in a single account. But if you have 2 accounts, you can deposit 1.5 Lakhs in each account, however, the tax benefits would be available only for a maximum amount of 1.5 Lakhs under section 80C.

How can I open account in Sukanya Samriddhi Yojana?

You can open Sukanya Samriddhi Account either through post office or from the list of 28 authorized banks.

Which banks offer Sukanya Samriddhi account?

You can check the list of authorized banks here:

Also Read: List of Authorized Banks for Sukanya Samriddhi

What are the documents required for Sukanya Samriddhi account?

The following document are required to open the scheme

• Account Opening Form
• Birth Certificate of Girl Child
• Address Proof of Parents/Guardian
• ID proof of guardian/parents

How can I check my Sukanya Samriddhi account?

You can check Sukanya Samriddhi Account online if your bank/post office has core banking facility. Otherwise, you can update your passbook by visiting nearest branch of your bank/post office.

Can we open Sukanya Samriddhi Yojana account online?

No, you cannot open Sukanya Samriddhi account online. Currently, authorized banks and post offices are not allowed to open the account online.

Can I transfer money online to Sukanya Samriddhi account?

Yes, you can pay your future installments online by giving standing instructions to the bank.

Can I open Sukanya Samriddhi account online in ICICI Bank? /HDFC Bank?

No, you cannot open Sukanya Samriddhi account online in ICICI Bank/HDFC Bank.

Which bank is best for Sukanya Samriddhi Yojana?

Since, the Government of India decides the interest rates of the scheme, it makes no difference in which bank you would want to open an account. Choose a bank that you are comfortable with.

Sukanya Samriddhi Yojana Penalty

An irregular account where a minimum amount of Rs. 250 has not been deposited may be regularized on payment of a penalty of fifty rupees per year.

Can Sukanya Samriddhi account be transferred from post office to bank?

Yes, you can transfer the account anywhere in India if the girl child in whose name the account stands shifts to a place other than the city or locality where the account stands.

Also, you can transfer Sukanya Samriddhi Account from post office to bank. You can go through the process by clicking on the link

Also Read: Process to transfer from Post Office to Bank

What is the benefit of Sukanya Samriddhi scheme?

Following are the benefits of Sukanya Samriddhi scheme –

• Interest rates are higher than most of the debt-oriented schemes like bank deposit and FDs/PPF.
• Since it’s a debt scheme by Govt. of India, chances of defaults are Nil.
• Tax benefits under Section 80C
• You can invest any amount between 250-1.5 Lakhs per year as per your cash position.
• Scheme comes under EEE as explained above. This is the most attractiveness of this scheme.

Drawback of Sukanya Samriddhi Yojana

Let’s see, what the drawbacks of Sukanya Samriddhi Yojana are –

• Lock in period is high in this scheme. You can not withdraw money till the girl child is 18 years old.
• You can withdraw only 50% at the time of higher education.
• Interest rates may higher today but may not be in the same range for long periods.
• Maturity proceeds would be in the hands of Girl Child.

Now coming back to the main topic, when should you purchase super top up policy? Let me take an example for illustration purpose

Suresh is 35 years old and is covered by corporate health insurance cover of 5 Lakhs. In addition to the corporate cover, Suresh has also purchased a family floater health insurance policy of 5 Lakhs as he knows that his corporate policy will not cover his family after retirement. Or if he changes jobs, there are chances that the next employer may not provide the same amount of health insurance cover.

As Suresh always tries to gain financial knowledge through different financial portals, he heard about super top up policy and decided to do a little research about the same. The premium for a 25 Lakhs super Top up policy with 5 Lakhs deductible was in the range of 3000-5000 for different policies. He immediately decided to purchase the policy.

Was Suresh right in purchasing the super top up policy of 25 Lakhs with 5 Lakhs deductible?

Yes, Suresh was absolutely right in purchasing a super top up policy.  The coverage now is increased 30 Lakhs for the family.

You can read the article on how Super Top up can reduce your premium outgo.  https://www.finvin.in/reduce-premium-super-top-policy/

Was Suresh right in deciding the timing of purchasing a super top up policy? Let us see

5 Years back, Suresh had purchased the health insurance cover of 5 Lakhs on 1^st January. He is renewing this policy in January every year. Let us call this policy as Base Policy. He renewed it last on 1^st January 2020.

Suresh purchased the Super top up policy on 1^st June 2020.  There is a gap of 5 months here.

Does this gap make a difference while filing a claim?

Yes, it does. There are chances that you would not get the claim from your super top up policy!

Let us see now, in which case, Suresh`s family will not get a claim. (I am not considering the corporate health insurance claim here, the example is just for illustration purpose)

Suresh was not well and was admitted in the hospital in the month of March 2020. The hospital bill was 5 Lakhs. He got the claim of 5 lakhs from his base policy, which was renewed in January 2020.

In the month of September 2020, Suresh`s wife got admitted in the hospital and the hospital bill was 4 Lakhs. Will he get this claim from the base policy or Super Top up policy? After all his family is covered for 30 Lakhs through the 2 policies?

This claim will not be payable either from the base policy or from the Super Top up policy!

It will not be payable from the base policy because he has already exhausted the 5 Lakhs coverage in the first claim in March 2020.  Now he can claim from this policy only after January 2021 renewal.

It will not be payable from the Super top up policy because from 1^st June 2020, there is no claim upto the deductible limit of 5 Lakhs. Since the Super Top up policy was purchased on 1st June 2020, the financial year counted for the super top up policy would be from 1^st June 2020 to 31^st May 2021. The claim of 5 Lakhs paid in March 2020 will not be counted here.

The additional expenses of 4 Lakhs has to be paid from Suresh`s own pocket. If the claim goes above 5 Lakhs in September, the additional amount (in excess of 5 Lakhs) would have been paid from the Super Top up policy.

In simple terms, the claim from this Super top up policy will be payable only if there is claim in excess of 5 Lakhs( deductable amount ) from 1^st June 2020 to 31^st May 2021.

Had he purchased the Super top up policy also on 1^st January 2020, this issue would have been avoided.  In such case, the coverage of 30 Lakhs is available for the period 1^st January 2020 to 31^st December 2020.

And that is precisely the reason why base policy and super top up policy should be purchased at the same time.

If you already have a base policy and if you are planning to purchase a super top policy, purchase it only along with renewal of your base policy.