Finance Trading Times

Dearness Allowance for Central Government Employees: Expected to go upto 80%

noreply@blogger.com (Financial Advisors) — Thu, 18 Apr 2013 06:02:00 +0000

Earlier in the year 2012 and 2011, there were good news about Dearness allowance increase for the central government employees under the sixth pay commission and we had covered the details in the following articles, 7% DA Dearness Allowance Increase for Central Government Employees and then Government approves 6% hike in DA: Dearness Allowance now at 51%: Sixth Pay Commission Recommendation
Dearness Allowance for Central Government Employees: Expected to go upto 80%
Details about Dearness Allowance for Central Government Employees, which is expected to increase by 8% from current 72% t 80%
Today can be a big day for Central Government Employees as there are expectations that the dearness allowance can be increased from 72% to 80%. This was a decision expected earlier on APril 2, 2013, but it was deferred because the Finance Minister was not available to conclude on the decision. Now the expectations are that today this good news can come through.

Dearness Allowance: Sixth Pay Commission Recommendation Details about DA hike

How many central government employees will benefit from this Dearness Allowance DA hike as per Six Pay commission recommendation?
More than 50 Lakh central government employees are expected to get the benfit of increased Dearness Allowance.
Along with them, around 30 lakh pensioners are also expected to benefit.

When will the new Dearness Allowance be effective?
That is another good news. The new Dearness Allowance DA value is expected to be effective from January 1 2013. So employees can expect more money in coming months as arrears payment.

How much money will this hike be?
It is estimated that this hike of 8% in Dearness Allowance will be given. Current DA stands at 72% and with 8% hike this is expected to shoot upto 80%.
As per the various details available on the internet, The Dearness Allowance revision usually happens two times in a year, January and July.

Last year, there was a DA hike which took the DA to 72% in September 2012. That came into effect from July 2012.

The DA is integrated with basic salary component once it goes above the 50 percent limit. It ensures that employees get higher allowances as those are paid in proportion to the basic pay.

With this DA hike, the Central Government employees who already have got a lot of benefits from the 6th pay commission recommendation have one more additional thing to feel happy about. This will be a relief for them considering the high value of inflation the common man in India is struggling with.
However, please note that above details are based only on the news items and yet to be confirmed. Quiet likely the confirmed news is expected today with exact details.

IIB Inflation-Indexed Bonds India (TIPS Bonds India) Details

noreply@blogger.com (Financial Advisors) — Mon, 15 Apr 2013 15:59:00 +0000

As per the news details available, the Reserve bank of India (RBI) is expected to launch the Indian version of TIPS bonds (Commonly known as Treasury Inflation Protected Securities) and quite popular in countries like USA. In India, these bonds will be known as IIB or Inflation-Indexed Bonds and are expected to be launched within a month i.e. by May 2013.
Let's see some details of these IIB (or TIPS) bonds in India.

What are Inflation-Indexed Bonds IIB (or TIPS) bonds in India
People make investment. The aim is to generate better returns for future. The problem is that many saving returns are eaten up by inflation and Inflation-Indexed Bonds IIB (or TIPS) bonds are expected to offer the protection against the inflation.
For e.g., let's say there is a bond which is offering annual 5% interest rate (or coupon rate). So if you invest 100 Rs. in this bond, after a year you will get Rs. 105.
Suppose tea is costing Rs. 100 per Kg today. So today, you can buy 1 KG tea with the 100 Rs. you have.
But suppose, instead of buying tea today, you invest your money in the above mentioned bond. Beacuse of inflation, suppose the cost of tea rises to 120 Rs. per Kg in one year. Then, the money which you got after the bond matures after 1 year (Rs. 105), will be insufficient to purchase the same 1 Kg Tea. This is where the inflation hits and causes problems with the savings. It hits the purchasing power of the money.

The Inflation-Indexed Bonds IIB (or TIPS) bonds aim to provide a shield against the inflation, by offering a return linked to inflation rate. See example and types below.

Inflation-indexed securities link their capital appreciation, or coupon payments, to inflation rates. Investors seeking safe returns with little to no risk will often hold inflation-indexed securities.

What are the different types of Inflation-Indexed Bonds IIB (or TIPS) bonds in India?
This is still in the design stage, so no concrete details are available about what kind and types of features will be available for 2013 issues of Inflation-Indexed Bonds IIB (or TIPS) bonds in India.
However, there are some general guidelines available from the past issues of Inflation-Indexed Bonds IIB (or TIPS) bonds in India. Here is one example available:

Assume that a Rs 100 par value Inflation-Indexed Bond has a 9 per cent coupon rate when the bond was issued.
Suppose that the inflation is at 8%. If this had been a normal bond you would have got Rs. 90 as an interest.
But because this is Inflation-Indexed Bond, the principal amount will be adjusted to take inflation rate into consideration. It will now be Rs 1080 (1.08*1000) and the interest (coupon) rate of 9 per cent will be paid on this inflation adjusted principal amount (Rs 1080). This shows that you will receive Rs 97.2 as an interest at the end of year, which is higher than that of Rs 90 had this been a normal bond.

IIB Inflation-Indexed Bonds India (TIPS Bonds India) Details

But a word of caution - the above is just one of an examples. There can be a lot of variety in the types of Inflation-Indexed Bonds IIB and the details are yet to be finalized by the issuing authority.
For example, there can be a case where both PRINCIPLE amount as well as COUPON (interest rate) offered was adjusted. For the above mentioned example, it will mean adjusting Rs. 1000 to 1080 and also adjusting 9% to 9.72%.
Other case can be adjusting only the coupon rate.

Then comes the question of which inflation value is considered? WPI (Wholesale price index) or CPI (Consumer Price Index) or any other varient of inflation measure?

Other variations can come in terms of period, duration and timing. Suppose WPI is taken, but value is taken from which date (1 March or 1 January each year) and for how long (3 months, 6 months, etc.)?

All these form the features of Inflation-Indexed Bonds IIB and details will be updated in this section once the offering is made available.

As per the news available at the moment, WPI (Wholesale price index) will be used for inflation measure and will be indexed every six months.

What is the typical maturity period for Inflation-Indexed Bonds IIB (or TIPS) bonds in India
It is expected to be long term. The maturity period can range from 7 years to 15 years.

What is the purpose for which Inflation-Indexed Bonds IIB (or TIPS) bonds are being introduced in India
Multiple reasons:
- Gold is being used as a hedge against inflation by individuals as well as organizations and even countries. But it has been volatile. These Inflation-Indexed Bonds IIB will offer an alternate to gold
- Goverment will be able to collect funds by offering Inflation-Indexed Bonds IIB

Should investors go for Inflation-Indexed Bonds IIB (or TIPS) bonds in India
These are a few points to consider while investing your money in IIB:

- Its a game of numbers. Investors need to be cautios about the nos. of WPI (inflation measure). What if at the time of consideration, the WPI is low (say on 1 Jan it is at 5%), but Feb onwards it start shooting up and reaches high. Investors may still end up taking on 5% rate.
- Good thing is that indexing is expected to be at 6 monthly basis. The more frequent it is (1 month, 3 month) the better.

- Exit conditions need to be checked. Inflation-Indexed Bonds IIB are expected to be long term investments (7 to 15 years). As of now, early exit details are not yet available. Are investors good to lock their money for long periods, if early exit is not available?
Above details need to be checked by individual investors before putting their money in Inflation-Indexed Bonds IIB (or TIPS) bonds in India

Return Calculations: LIC Jeevan Sugam Policy

noreply@blogger.com (Financial Advisors) — Thu, 28 Feb 2013 04:41:00 +0000

Continuing further from our previous article LIC Jeevan Sugam Policy Review, here are the further details on Return Calculations.

Is the LIC Jeevan Sugam Policy worth investing?
Going by the example cited on LIC's official website, they quote a scenario of a 30 year old person who pays Rs. 33759 as one time single premium for basic sum assured as 60,000 Rs and at the end receives total amount ranging from Rs. 60,000 to 67,200 based upon assumptions that LIC will be able to earn throughout the term of the policy will be 6% p.a. or 10% p.a.

So basically, even with the example on LIC site, this case is of invested amount Rs. 33759 turning it into a best return scenario of Rs. 67,200. In essence the investor has doubled his money in 10 years.

But here it gets interesting. If I assume that a bank Fixed Deposit is paying me 9% interest and instead of putting my money in LIC Jeevan Sugam Policy, I put my money for 10 years with reinvest option in 9% Bank FD, then the calculations give me better return at the end of 10 years:

LIC Jeevan Sugam Policy Return Calculations

Year	Amount	Maturity at end of year
1	33,759.00	36,797.31
2	36,797.31	40,109.07
3	40,109.07	43,718.88
4	43,718.88	47,653.58
5	47,653.58	51,942.41
6	51,942.41	56,617.22
7	56,617.22	61,712.77
8	61,712.77	67,266.92
9	67,266.92	73,320.95
10	73,320.95	79,919.83

So this Bank FD investment gives me almost 80,000 Rs. at the end of 10 years assuming 9% interest rate. This is much better than what LIC Jeevan Sugam Policy is offering.
However, there is one important point being missed in Fixed Deposit. It does not offer any guranteed sum assured, in case of death of investor. If investor dies in 4th year, all his nominees will get is 4 years of interest from bank (around 47,643 Rs.). But in LIC Jeevan Sugam Policy, it will be 10 times of sum assured that will be 60,000 Rs.
Another thing is that Jeevan Sugam policy offers you tax benefits under section 80(C), which may not be available in Bank FD. Yes, there are tax saving FD's, but the interest the tax saving FD's pay may be less.

So this offers some kind of insurance cover compared to Fixed Deposit. Someone looking for partial insurance + investment return can look at investing in this Jeevan Sugam Policy.
Probably that's why LIC is limiting the maximum entry age at 45 years. :) They dont want elderly people benefit from this insurance cover. :)
If you see any errors in this article, please inform us via email or post a comment (at the end of this article)

Are there and tax exemption or tax benefits available for LIC Jeevan Sugam Policy?
Yes, tax benefit is available for investments made under LIC Jeevan Sugam Policy under section 80(C).

What are the other Policies from LIC other than LIC Jeevan Sugam Policy?
Here is a list of All LIC Policies

What are the other competitor products for LIC Jeevan Sugam Policy?
Jeevan Sugam Policy is a invest and forget policy. It has a simple alternative as Bank Fixed Deposit with 9%-10% interest rate offering in reinvest mode.
Other option is to invest in index based ETF or exchange traded funds and forget the money for 10 long years with equity exposure expecting high returns. Here is an example of ETF with returns calculations: ETF – Exchange traded fund example

LIC Jeevan Sugam Policy

LIC Jeevan Sugam Policy Review

noreply@blogger.com (Financial Advisors) — Thu, 28 Feb 2013 04:40:00 +0000

Details, Review and Analysis about LIC Jeevan Sugam Policy.
LIC or Life Insurance Corporation of India, the largest insurance company of India, has recently come out with its new launch called "LIC Jeevan Sugam Policy". In this article, we will see whether this LIC Jeevan Sugam Policy offers anything new and unique, whether investors should consider this policy for investment or insurance or both (or none), whether this policy has any better competitor products available in the market which can be looked upon.

Introduction & Details about LIC Jeevan Sugam Policy
A cursory look at LIC Jeevan Sugam Policy offering tells that this is a single premium policy i.e. the investor needs to pay one time money to invest into this policy. This is a non-linked policy, which means your investments will not be of ULIP nature i.e. not linked to any market or stock specific returns.
However, please note that this is a limited period offering i.e. it will open for subscription during a limited period (45 days only, from the launch date).
On the returns side, this policy offers a sum assured return on maturity (on survival of investor) or death benefits (on unfortunate demise of the investor).

What are the benefits available in LIC Jeevan Sugam Policy?
Your benefits are linked to the amount of investments you make in this policy. The basic sum assured is claimed to be 10 times of the single invested amount.

The higher the investment amount, the better awards are promised. They even top it up with extra percentage offerings if the invested amount exceeds certain value (see details below).

Benefits are described for two situations - (1) Death Benefits - In case of Death of insured investor and (2) Maturity Benefits - In case of survival of insured investor. Let's see each of them seperately.

Review of LIC Jeevan Sugam Policy

Death Benefits in LIC Jeevan Sugam Policy
In case the investor dies before the maturity of the LIC Jeevan Sugam Policy, following benefits will be given to the nominee:

- On death during first five years of taking the policy:
Basic Sum assured i.e. 10 times the single premium (net of service tax) excluding any extra premium charged shall be payable.

- On death after completing five years of taking the policy:
Basic Sum assured i.e. 10 times the single premium (net of service tax) excluding any extra premium charged along with loyalty addition, if any, shall be payable.

So the speration line is 5 years and if the deceased investor completes 5 years, the loyalty addition amount will be given. No loyalty addition amount if investor dies before 5 years of policy completion.

What are the maturity benfits or survival benefits of LIC Jeevan Sugam Policy
On maturity, the Maturity Sum Assured along with Loyalty Addition, as applicable, shall be paid to the investor.

Loyalty Addition is a top-up reward which is usually available in many LIC policies and is given to investors and policy holders who complete the full policy term without any discontinuity - either in terms of policy premium payments or in terms of early withdrawl from the policy.
However, the problem is that it is an uncertain value which is not known to the investors upfront. It is paid only at the end of maturity period and is unknown. It can range from zero to any value, depending upon what LIC decides.

What is the policy investment period or policy term for LIC Jeevan Sugam Policy
The LIC Jeevan Sugam Policy has a term of 10 years.
The minimum investment needed is 6,000 Rs. (based on minimum sum assured of Rs. 60,000) and there in no limit on the maximum side.
Maturity Amount should be in multiples of Rs. 5000, that means invested amount should be in multiples of Rs. 500.

Please note that invested amount may be applicable for service tax deductions.

What are the premium rates for LIC Jeevan Sugam Policy?
LIC provides an indicative sample table for 1000 Rs. sum assured value based on the age of the investor.

Age at entry	Single Premium Rates (Rs.)
10	537.75
20	552.90
30	562.65
40	629.35

That means, a person who is 30 years old looking for 5 Lakh Rs. sum assured (Rs. 1000*500) should invest 562.65 * 500 = 281,325 Rs.

What are the other top-up options available under LIC Jeevan Sugam Policy?
LIC wants to attract more high value investments in this LIC Jeevan Sugam Policy, so they are offering top up benefits or incentives if someone invests big amounts. It is based on the maturity sum assured value.

Maturity Sum Assured	Increase in Maturity Sum Assured
Below Rs.150,000	Nil
Rs.150,000 to Rs. 399,999	3.50%
Rs.400,000 and above	4.50%

i.e. if someone wants to have 5 Lakh sum assured, he will get additional 4.5% on maturity.
Total payout on maturity = 5 Lakhs + 4.5% of 5 Lakhs as incentive + any loyalty bonus amount
= Rs. 522,500 + Loyalty Bonus

So in a nutshell, you invest 281,325 Rs. and forget it for 10 years. At the end you receive Rs. (522,500 + Loyalty Bonus).
Let's head over to Return Calculation for LIC Jeevan Sugam Policy and comparison with other (or better) products.

IndiaBulls Income Fund NFO: Review Analysis & Details

noreply@blogger.com (Financial Advisors) — Wed, 13 Feb 2013 09:23:00 +0000

Details about IndiaBulls Income Fund: Review, Analysis, Details & Investment Opinion.
A new debt or fixed income based mutual fund is now open in the Indian markets. The fund belongs to IndiaBulls Asset Management mutual fund house and is called the IndiaBulls Income Fund. As the name suggests, this fund will collect money from Indian investors and invest it in the Debt instruments and securitized debt instruments for a steady return. It's an open ended debt scheme which means that any no. of investors with any amount can invest in this fund.

In this article, we will analyze how good is this IndiaBulls Income Fund NFO, whether this IndiaBulls Income Fund offers anything new or unique for the investors and whether the investors should invest in IndiaBulls Income Fund.

IndiaBulls Income Fund NFO: Review Analysis & Details

Let's begin with some basic details about IndiaBulls Income Fund.

What are the NFO dates for IndiaBulls Income Fund?
Image sourced as screenshot from official Indiabulls mutual fund site

The NFO period for IndiaBulls Income Fund is from February 12, 2013 to February 26, 2013. After the NFO period, the regular buying, selling and redemption of fund units will start at a date 5 business days from date of allocation.

What is so unique about this IndiaBulls Income Fund?
Usually, whenever someone speaks about a mutual fund, investors assume it to be an equity based mutual fund. However, one must note that this is only a debt based fund i.e. your invested money will be used to buy only those financial securities which are interest giving - for e.g. a bond which pays you interest say at the rate of 8% per annum.
Apart from that, there is nothing so unique about this IndiaBulls Income Fund as it is similar to any other debt based fund available in the market.

What are the other competitor products available in comparison to IndiaBulls Income Fund?
There are many mutual funds available in the market which are debt based. Investors can consider those for a comparison.
Then there are the good old Fixed Maturity Plans FMP (See Introduction & Example). If more safety is needed, then you can go for interest bearing good old reliable Bank Fixed deposits or FD. See FMP v/s FD Comparison

What are the risks of investing and trading IndiaBulls Income Fund?
There are always risks involved in any kind of investment.
The investment objective of the fund is to generate steady income or returns, but it is not guaranteed. Debt based investments are usually less risky compared to equity, but the risk still persist, although less.
The variety of debt instruments, in which your money will be invested, will be decided by the fund manager. How those different debt instruments perform, whether your fund manager is able to get a good timely selection for you is something not in your control.
The variety of debt instruments can include Debt instruments, securitized debt including Repos in Corporate Debt Securities & Money Market Instruments.

These inherent risks are to be taken by the investor.

Final Thoughts about IndiaBulls Income Fund?
In summary - Another mutual fund focussed on debt instruments. Investors can look for this as a diversification tool at the market or country specific level provided they understand the risks listed above.

See List of All Mutual Fund and NFO Articles here

During NFO period:
Minimum investment Rs 5000 and in multiples of Re 1 afterwards. Additional Purchase Rs. 1000 and in multiples of Re. 1 /- thereafter

Tax benefit will NOT be available in IndiaBulls Income Fund.

There will be 2 plans for investors to choose from:

IndiaBulls Income Fund Entry Load: NIL
But it comes with very exit load at the initial stage:
IndiaBulls Income Fund Exit Load: 1% for exit (repurchase/switch-out) on or before 6 months, 0.5% for exit from 6 months (+1 day) to 1 year from the date of allotment. NIL beyond 1 year.

Asset Allocation:
Debt instruments and securitized debt* including Repos in Corporate Debt Securities: 65% to 100%
Money Market Instruments: 0% to 35%

SIP or systematic investment plan? No info.

The benchmark for IndiaBulls Income Fund will be CRISIL Composite Bond Fund Index

Mr. Raju Sharma, Head - Fixed Income at Indiabulls, will be the fund manager for IndiaBulls Income Fund.

India Budget Date 2013-14: Expected 28 February 2013

noreply@blogger.com (Shobhit) — Sun, 27 Jan 2013 08:21:00 +0000

Like last year we had provided the information about the Indian Budget Dates 2012, this year again we provide the information as available at this moment about the Budget Dates.

In this article, we cover details about Indian Budget Date for the year 2013-2014 for the General Annual Union Budget. Also covered are the details for expected dates of Railway Budget for India for the year 2013-2014

General Union Budget 2013 Date India:

Since this year, there are no elections pending around the months of February and March, the budget is expected to come at the usual time.The date of General Union Budget of India for the year 2013-2014 is now expected to be as 28 February 2013
This information is based on the ticker coming up on few business news channels which show the budget date as "33 days to go" on 25 January 2013. By that calculation, the budget date comes as 28th February 2013.

Reliance My Gold Plan: Review, Analysis & Details

noreply@blogger.com (Financial Advisors) — Sun, 13 Jan 2013 13:34:00 +0000

This article contains Details Analysis & Investment opinion about Reliance My Gold Plan
Reliance Money/ Reliance Capital, through its Relaince Money Precious Metals company, has come out with another gold based investment scheme. Reliance is a big name trusted by many specially in India and their investment arm is not leaving any possibility to capitalize on that brand name. Reliance already has a lot of gold based schemes, namely Reliance Gold Savings Plan and Reliance Gold ETF, and this is another ariant of the same gold based investment scheme which is now available to small investors.
In this article, lets take a closer look at the Reliance My Gold Plan and see whether this offers anything different from exisitng gold based investment plans and whether it is really worth investing in such a gold based scheme.

To understand this scheme better, let's fitst start with its basic details and the it will serve a good platform to compare against other existing schemes.

What is so unique about Reliance My Gold Plan?:
Reliance My Gold Plan basic scheme is that it will collect money from investors at the start of the month as a lump sum amount, and then divide that money into 20 equal amounts and then in the 20 business days of the month it will invest these small parts - i.e. one of the 20 parts every day.
So for e.g. you gie them 1000 Rs. per month. Divide it by 20 and it gives 50 Rs. In next 20 business days of the month, they will buy whatever gold will be available for that 50 Rs.
So if on day 1, gold is at 30,000 Rs. per 10 grams, then for 50 Rs. you will get 0.01667 grams of gold. day 2, if the gold price goes to Rs. 32,000, then for your 50 Rs. you will get 0.015625 grams of gold on day 2.
This will continue for all 20 days of the month and your gold amount will therefore average out for the price of gold over 20 days in that month.
This will continue for your selected amount of monthly investment. And this is the unique feature about this Reliance My Gold Plan. It claims to benefit small investors in this scheme, so that these small amounts of money will be used for average gold purchase and hence over a long period of time investors are expected to accumulate gold at the average price. Sounds good? But hold on till you read full details and charges...

Reliance My Gold Plan Details & Investment Advice

What are the scheme details for investing in Reliance My Gold Plan?
You will be required to start with a initial amount (Minimum Rs. 1000 & multiples of Rs. 100 thereafter) and then commit a monthly investment amount (again Minimum Rs. 1000 & multiples of Rs. 100 thereafter).
The selected duration of investment can be from 1 year to 15 years (intervals of 1 year i.e. 1 or 2 or 3 years and so on).
There is a lock-in period of 6 months.
Amount invested on daily basis will be for 24 carat gold daily price in grams (4 decimal places).

After your complete your selected tenure of investment, you will have to take gold coins or gold jewellery for the amount of gold you accumulated. Say for example you decide to invest for a period of 10 years and after 10 years you accumulated 100 grams of gold, you can then take 100 grams of gold coins or jewellery, on maturity.

What are the charges for investing in Reliance My Gold Plan?
And this is where it gets interesting - every investor for all investment schemes should be aware about the charges.
Reliance My Gold Plan will take 1.5% in the name of administratie charges. Administrative Charge charged on MY GOLD PLAN price instead of the Subscription amount. My understanding is that this will mean everyday, if your daily amount comes to 50 Rs., then only 49.25 Rs. will be invested, rest 0.75 Rs. will be kept by Reliance Fund Managers in the name of Admin charges. (In case this is incorrect, please post correct details in the comments section)
This is a permanent fee you will be bound to pay irrespective of your period of investment.

Also note, if you withdraw from this scheme in less than 1 year, then 2.5% charges will be taken away for termination.

Even if you complete your investment tenure (say 10 years) but dont take gold coins or jewellery, then Reliance will take 0.5% of the amount per year towards "safekeeping of your gold and insurance charges".
If you decide to take gold coins or jewellery upon maturity, then you will still have to pay coin making charges. Nothing is mentioned about the jewellery making charges. However, Local taxes, octroi taxes, etc. may still have to be paid by the investors on maturity.

Investors should be aware about these details.

What are the benefits of Reliance My Gold Plan?
Well, it claims to provide "Daily Averaging benefit" for investing in gold with small amounts to small investors.
That is one claimed benefit.
They claim zero default risk as an independent trustee retains your gold, plus the purity of gold is guaranteed.

What are the risks in investing in Reliance My Gold Plan?
Some details investors should be aware of :

- Risk of Gold price fluctuations. Although they claim to average out the gold accumulation price over a period of time, but the risk of gold price falling down at the time of your scheme maturity always exists. Also note that averaging does provide some downward risk cover, but it also limits the upside profit potential.

- This is not a collective investment scheme, so it does not come under SEBI rules and regulations

- This is not a deposit scheme, so it does not come under RBI rules and regulations.
Therefore, the only way to address customer griviences is the customer can approach the independent Security Trustee of this scheme.
Here is a comparison as available on Reliance My Gold Plan scheme: (taken as screenshot from the site) Please click to enlarge:

Final Thoughts about investing in Reliance My Gold Plan:
These kinds of schemes appear to be good accumulators, but please note the risks mentioned above.
All these schemes are offering is a disciplined approach to regular investment in gold. However, this comes at a cost in the form of administration fee, etc.
These schemes do not guarantee any benefits or returns, rather simple accumulation at whatever prices gold is available at.

Here are the details of Historical Performace of Gold ETF in India with comparisons across many schemes

So, as an investor, if you are OK to pay the admin charges, take delivery of physical gold at the maturity of the scheme, plus pay the manufacturing charges as applicable, plus the local taxes etc as applicable, then this kind of scheme should be good for you.
But if you are looking only at investment in gold, then I'll suggest to go for Gold based ETF's or Gold Exchange Traded funds where a lot of them are available in Indian markets. Some also come with monthly SIP.
- All Gold ETF's

- All Gold Saving Funds

Daily price fluctuations of gold prices may be there, but monthly price fluctuations are not that big. Daily averaging shouldn't give that much extra benefit in long durations compared to monthly SIP Gold ETF monthly averaging.
The best thing about gold ETF's is that upon selling the units you get cash, and that you can use anywhere - buying gold coins, jewellery or anything else. This My Gold plan restricts the investor to only taking physical gold.

Axis Gold Fund, then the ICICI Gold Savings Fund, SBI Gold Fund and Reliance Gold Savings Fund (See Review & Details) are there in the market.

HDFC has its own ETF: HDFC Gold ETF NFO: Review Analysis & Details apart from others like Quantum Gold Fund (Gold ETF) ICICI Prudential Gold ETF, then SBI GETS-SBI Gold ETF NFO Review: SBI Gold Exchange Traded Scheme and so on.

Other Gold Schemes: Quantum Gold Fund & Religare Gold Fund

Ultimately, it all depends upon your investment horizon, charges taken by other similar schemes or gold saving plans or gold ETFs trading charges.

Reliance My Gold Plan

NSE-BSE Holidays 2013: List-India Stock Exchange (Stock Market) Holidays 2013

noreply@blogger.com (Shobhit) — Fri, 28 Dec 2012 07:42:00 +0000

Details about BSE Holidays List 2013 / NSE Holidays List 2013
The year 2012 is coming to a close. Traders as well as Investors across the globe would like to now know the holidys calender for the year 2013 for planning their leaves and trading activities.
Like last year 2012, where we provided the NSE-BSE Holidays 2012: List-India Stock Exchange (Stock Market) Holidays 2012, once again here we provide the holiday list for the year 2013 for the Indian Stock exchanges.

Bombay Stock Exchange (BSE) Holidays 2013

National Stock Exchange (NSE) Holidays 2013

Wishing all the readers, traders and investors a happy and frutiful New year 2013.
BSE Holidays List 2013 / NSE Holidays List 2013

Sr. No.	Date	Day	Description
1	25-Jan-2013	Friday	Id-e-Milad
2	19-Feb-2013	Tuesday	Chhatrapati Shivaji Maharaj Jayanti
3	27-Mar-2013	Wednesday	Holi (2nd day)
4	29-Mar-2013	Friday	Good Friday
5	01-Apr-2013	Monday	Annual Bank Closing
6	11-Apr-2013	Thursday	Gudi Padwa
7	19-Apr-2013	Friday	Ram Navmi
8	24-Apr-2013	Wednesday	Mahavir Jayanti
9	01-May-2013	Wednesday	Maharashtra day
10	09-Aug-2013	Friday	Ramzan ID (Id-Ul- Fitar)
11	15-Aug-2013	Thursday	Independence Day
12	09-Sep-2013	Monday	Ganesh Chaturthi
13	30-Sep-2013	Monday	Half Yearly Bank Closing
14	02-Oct-2013	Wednesday	Mahatma Gandhi Jayanti
15	16-Oct-2013	Wednesday	Bakri Id (Id-Ul-Zua)
16	04-Nov-2013	Monday	Diwali (Balipratipada)
17	14-Nov-2013	Thursday	Moharum
18	25-Dec-2013	Wednesday	Christmas

The holidays falling on Saturday / Sunday are as follows:

Sr. No.	Date	Day	Description
1	26-Jan-2013	Saturday	Republic Day
2	10-Mar-2013	Sunday	Mahashivratri
3	14-Apr-2013	Sunday	Dr. Babasaheb Ambedkar Jayanti
4	25-May-2013	Saturday	Buddha Pournima
5	18-Aug-2013	Sunday	Parsi New Year
6	13-Oct-2013	Sunday	Dasera
7	03-Nov-2013	Sunday	Diwali (Laxmi Puja)*
8	17-Nov-2013	Sunday	Guru Nanak Jayanti

*Muhurat Trading will be conducted. Timings of Muhurat Trading shall be notified subsequently.

CARE IPO: Review Analysis & Details of CARE Rating Agency IPO

noreply@blogger.com (Financial Advisors) — Tue, 04 Dec 2012 11:49:00 +0000

CARE IPO Details, Review, Analysis, Opinion and information on CARE Rating Agency IPO
You may have heard a lot about rating agencies like S&P, Moody's, etc. and related news items like "S&P downgrades XYZ country or stock" or "Moody's upgrades rating of this country from BB to BB+" and so on. So basically, these rating agencies "rate" companies, businesses, countries and similar entities. These ratings are then used by traders and investors to make trading and investment decisions and that's the business of these rating agencies. Similarly, CARE is one of the rating agencies in India and it is planning to come out with its IPO or initial Public Offering.
In this article we will look upon the Details, Review, Analysis of the CARE IPO. Let's start with some basic details first:
- The size of CARE IPO is 7.19 million equity shares.

- The above no. of shares will constitute 25.22 percent of the post-offer paid-up capital

- The existing shareholders are selling their stake - offer for sale (OFS) model - i.e. there will no fresh shares issued

- The capital expected to be collected through these shares will be in the range of Rs 504 crore to Rs 540 crores, depending on the price band.

What are the primary reasons for CARE to come out with the CARE Rating Agency IPO?
Although we dont have concrete details available at the moment, any IPO is always brought for Fund raising. It is learnt that the money collected through this IPO will be used for business expansion, working capital requirements, diversification into new areas of KPO, Risk Management and setting up offices globally.

What is the issue size of the CARE Rating Agency IPO?
The CARE IPO size is of 7.19 million shares.
Ivestors can bid for a minimum of 20 equity shares and in multiple of 20 shares.

What is the price band of CARE Rating Agency IPO?
The Face Value of each Equity Share is Rs. 10 each.
The price band and the minimum bid lot will be Rs 700 to Rs 750 a share.
As of now, we dont have any news about any discount being offered to retail investors.

CARE IPO: Review Analysis & Details

How many shares will be sold in the CARE IPO?
The total no. of shares to be sold through this IPO is 7.19 million shares.

What are the IPO dates for CARE Rating Agency IPO?
The issue will open on December 7 and close on December 11, 2012

How will the capital raised by CARE IPO be used?
It is learnt that the money collected through this IPO will be used for business expansion, working capital requirements, diversification into new areas of KPO, Risk Management and setting up offices globally.

Any ratings given to CARE IPO?
Rating agency getting a rating for its IPO :) - Why not?
But as of now, we dont have info about that. This section will be updated as soon as we get relevant details.

What are the business results for CARE IPO?
As per the details available, the following info is available about the business details of CARE:
- It claims to be second largest rating agency in the country
- It claims to have achieved 40% growth in last few years
- Company claims to have cash reserve of around Rs 375 crore and is a debt free company

What are the analysts recommendations and business results for CARE IPO?
- No info about that as of now. However, the company is bullish about expansion plans and cites the reasons such as development of corporate bond market will open up new business opportunities for the companies and all rating agencies.
The diversification plans of KPO, risk management, etc. also seem to be interesting.

Two other premier rating agencies in the country - CRISIL and ICRA are already listed on the stock exchanges. So CARE will be the third rating agency to go public.
A look at the performance of other rating company stocks over the last few years tell us completely different picture. CRISIL stock prices have been stable and it has been paying dividends regularly, while ICRA has been volatile in terms of stock prices and paid lesser no. of dividends.

All big names - Bank of America-Merrill Lynch, ICICI Securities, Edelweiss Capital, Kotak Securities, IDBI Capital and SBI Capital are learned to be the Book Running lead managers and advisors for the CARE IPO.

PC Jeweller IPO: Review Analysis & Details of PC Jeweller IPO

noreply@blogger.com (Financial Advisors) — Tue, 04 Dec 2012 11:19:00 +0000

PC Jeweller IPO Details, Review, Analysis, Opinion and information on PC Jeweller IPO
You may have seen a lot of TV and print ads from a jeweller, offering purchase of gold ornaments on EMI where last 2 installments will be paid by the jeweller. That's PC Jeweller. and it is planning to come out with its IPO or initial Public Offering.
In this article we will look upon the Details, Review, Analysis of the PC Jeweller IPO. Let's start with some basic details first:
- The size of PC Jeweller IPO is 45,133,500 equity shares.

- The above no. of shares will constitute 25 percent of the post issue capital

- The capital expected to be collected through these shares will be in the range of Rs 564 crore to Rs 609 crores, depending on the price band.

What are the primary reasons for PC Jeweller to come out with the PC Jeweller IPO?
Although we dont have concrete details available at the moment, any IPO is always brought for Fund raising. It is learnt that the money collected through this IPO will be used for expansion and working capital requirements.

What is the issue size of the PC Jeweller IPO?
The PC Jeweller IPO size is of 45,133,500 shares.

What is the price band of PC Jeweller IPO?
The Face Value of each Equity Share is Rs. 10 each.
The price band and the minimum bid lot will be Rs 125 to Rs 135 a share.
Good news for retail investors and employees is that there is a discount of Rs 5 to the issue price

PC Jeweller IPO: Review Analysis & Details

How many shares will be sold in the PC Jeweller IPO?
The total no. of shares to be sold through this IPO is 45,133,500 shares.
There is a reservation of 358,500 equity shares for the employees.

What are the IPO dates for PC Jeweller IPO?
The issue will open on Monday, December 10, 2012, will close on Wednesday, December 12, 2012 (That's 12-12-12)

How will the capital raised by PC Jeweller IPO be used?
It is learnt that the money collected through this IPO will be used for expansion and working capital requirements. Another 20 new showrooms will be opened throughout the country using the proceeds of this IPO.

Any ratings given to PC Jeweller IPO?
CRISIL assigns grade 3/5 to PC Jeweller IPO. This indicates average fundamentals of the company.

What are the business results business results for PC Jeweller IPO?
As per the details available, the following info is available about the business details of PC Jeweller:
- Turnover of around Rs 3,000 crore in 2011-12
- Two establishments in Uttarakhand for manufacturing jewellery for domestic markets
- Two establishments in Noida for manufacturing jewellery for overseas markets
- Company presnetly has 30 showrooms throughout the country
- Also exports gold and diamond jewellery to HongKong, Singapore and Dubai for wholesale business

What are the analysts recommendations and business results for PC Jeweller IPO?
- Going by rating, a rating of 3/5 may not look that great, but is it still average
- Aggressive TV and print campaign has been observed in last few months- in addition to business marketing, that may be for IPO buzz
- Investors willing to add some diversification to the portfolio - something slightly different from direct gold investing - can add this stock.

The shares will be listed on National Stock Exchange of India NSE and the Bombay Stock Exchange BSE.
SBI Capital Markets Limited and Kotak Mahindra Capital are learned to be the Book Running lead managers and advisors for the PC Jeweller IPO

Bharti Infratel IPO: Review Analysis & Details of Bharti Infratel IPO

noreply@blogger.com (Financial Advisors) — Fri, 30 Nov 2012 08:12:00 +0000

Bharti Infratel IPO Details, Review, Analysis, Opinion and information on Bharti Infratel IPO
Bharti Infratel, which is a subsidiary of Sunil Mittal led Bharti Airtel company is planning to come out with its IPO or initial Public Offering.
In this article we will look upon the Details, Review, Analysis of the Bharti Infratel IPO. Let's start with some basic details first:
- The size of Bharti Infratel IPO is 118.9 million equity shares.

- The above no. of shares will constitute 10% of the total shares of Bharti Infratel
- The capital expected to be collected through these shares will be in the range of Rs 39.67 billion to Rs 45.34 billion, depending on the price band.
- This Bharti Infratel IPO is going to be the largest IPO after the Coal India IPO around 2 years back

What are the primary reasons for Bharti Infratel to come out with the Bharti Infratel IPO?
Although we dont have concrete details available at the moment, any IPO is always brought for Fund raising. How that fund will be used is something we would update this section with, as soon as we find relevant information.

What is the issue size of the Bharti Infratel IPO?
The Bharti Infratel IPO size is of 118.9 million shares.

What is the price band of Bharti Infratel IPO?
The Face Value of each Equity Share is Rs. 10 each.
The price band and the minimum bid lot will be Rs 210 to Rs 240 a share.

Bharti Infratel IPO: Review Analysis & Details

How many shares will be sold in the Bharti Infratel IPO?
The total no. of shares to be sold through this IPO is 188.9 million shares.
Of these, the parent company Bharti Infratel is learnt to sell 146.2 million new shares.
There are many shareholders of Bharti Infratel of which four including Singapore's Temasek and Goldman Sachs are selling 42.7 million shares.
Bharti Airtel, currently owns around 86% of Bharti Infratel, is not selling any shares.

What are the IPO dates for Bharti Infratel IPO?
The issue will open on December 10, 2012 institutional investors and to the retail investors on December 11. It will close on December 14, 2012

How will the capital raised by Bharti Infratel IPO be used?
No Info about that as of now.

Any ratings given to Bharti Infratel IPO?
CRISIL assigns grade 4/5 to Bharti Infratel IPO. This indicates strong fundamentals 'above average'.

What are the business results business results for Bharti Infratel IPO?
As per the details available, the following info is available about the business details of Bharti Infratel:
- Consolidated Operating Income of Bharti Infratelhas increased at a four-year CAGR of 91% to Rs 92.6 billion in FY12
- Stable EBITDA in the 35-37% range over FY10-FY12
- Debt to Equity Ratio is low at a value of 0.2x
- Bharti Infratel consolidated net worth is reported to be around 139 billion INR

What are the analysts recommendations and business results for Bharti Infratel IPO?
- Based on the price band the market cap of the company will be in the range of 39,660 crore to Rs 45,330 crore Rupees
- Bharti Infratel owns more than 33,000 towers in 18 States in India
- It has presence in 11 telecom circles
- It also holds a 42 % stake in Indus Towers, which owns around 110,000 towers

JP Morgan, HSBC, UBS, Standard Chartered, Bank of America Merrill Lynch, Deutsche Bank, Kotak Mahindra and Enam are learned to be the Book Running lead managers and advisors for the Bharti Infratel IPO

Unemployment Insurance India: New Insurance Product for Job Loss

noreply@blogger.com (Financial Advisors) — Wed, 28 Nov 2012 07:37:00 +0000

Details about Insurance Products for Unemployment Insurance and Job Loss Insurnace in India. Such insurance provides cover in case the insured looses his job or earnings and these insurance policies will take care of the select items of cost of living
Unemployment Insurance is a new concept to India. As far as I am aware, at the time of writing this article, there is no insurance product available in India which takes care of unemployment scenarios for the insured person.
Now there is some buzz around this job loss or unemployment insurance, as reportedly Bharti Axa Insurance has filed a proposal to IRDA for lauching the unemployment insurance products in India. In this article, let us see how unemployment insurance products work and what you should look for before buying such insurance products.

Are there any unemployment insurance policies or products available in India at the moment?
At the time of writing this article, I am not aware of any such insurance policy or product which is available in Indian markets that offers benefit in case of unemployment or job loss to an individual.
There are a few products which take care of other associated liabilities, but they come tied with other things. For e.g., if you take a home loan, the home loan providing bank may have a condition for you to take something which can be called as a "Home Loan Protection Insurance" which may take care of your EMI payments for a few months in case you loose your job and earnings. But since it is tied to your home loan, it will only take care of your EMI's and not of any other expenses.
Similarly, you may have a health and accident cover from your employer which may offer some benefit to you in case you meet with an accident and are unable to come to work. The benefit will be that you will be paid a fraction of your salary while you are away from work for a few months. So all these cases are tied to something or the other.
The pure "Unemployment Insurance" is still not available in India and that is what is expected to be launched.

What exactly is the "Unemployment Insurance" or Job loss insurnace?
Unemployment Insurance is an insurance product quite popular in overseas countries. Typically, a person purchases a insurance policy which offers him/her the benefits in case of job loss.
Such insurance schemes are either offered directly by the governments, or the individuals can purcchase such insurance schemes directly from insurance companies.

What kind of benefits can be expected from Unemployment Insurance Policies?
Usually, the Unemployment Insurance Policies are purchased by individuals by paying an annual premium amount.
In case they loose their jobs, then the insurnace company will pay them the money for covering their monthly cost of living for a specified number of months. The coverage for this cost of living may include EMI or house rent payment, living expenses like grocery bills, electricity bills, transportation charges, society maintenance charges, etc.

These details about what all expenses are to be covered will have to be possibly agreed upon at the time of purchasing the "Unemployment Insurance Policy". So obviously the more expenses you want to cover, the more insurance premium you will be required to pay.

Unemployment Insurance Policies & Product Details

For how long period will the Unemployment Insurance benefit be available?
There will be only a specific no. of months during the unemployment period for which insurance benfits can be claimed. It obviously cannot be for indefinite period otherwise everyone would simply buy this Unemployment Insurance Policy and sit peacefully at home :).

As per the available news, the unemployment benefit is expected to be for 3, 6, 9 or 12 months period only for the insurance products expected to be launched in India. This period of coverage will have to be agreed upon at the time of purchasing the insurance policy. The longer period of coverage you select, the more insurance premium you will have to pay.
However, clarity would still be needed in case where you buy Unemployment Insurance for a period of 12 months, loose your current job and start getting Unemployment Insurance Benefits, and then get another job in 3 months time. So effectively, you paid premium and bought cover for 12 months, but utilized it only for 3 months. How will that 9 month benefit be used - will it be carried forward to some other year, will it lead to any reduction in insurance premium when you renew your Unemployment Insurance Policy next year - these are a few things which will need to be answered and seen.

Final Thoughts - Will it really be worth purchasing Unemployment Insurance Policies in India?
That's a million dollar question.
Clarity is expected on a lot of things only after a few such Unemployment Insurance products are made available in the Indian markets. Before that, nothing can be concluded.
Insurance is always a looked upon as a necessary but costly need by some, while some consider it to be useless and waste of money.
Once a few products are available, we will know about the cost of such insurance with respect to the benefits it will offer.
Also keep in mind that Indian Insurance market has its own dynamics - new and fancy products at the time of lauch always command high costs and lot of conditions are hidden and unclear. Keep a watch at this section (or Bookmark it) - we will definetely update this once a Unemployment Insurance Policy is launched, with its review and cost & benefit analysis.

Unemployment Insurance Policy in India

List of Banks offering Priority Banking / Wealth Management Services

noreply@blogger.com (Financial Advisors) — Mon, 24 Sep 2012 16:48:00 +0000

What are the banks offering Priority Banking / Wealth Management Services in India?
Priority Banking / Wealth Management Services have been there in India since a long time (atleast 6 years now). Almost all private banks offer this service, and some public sector banks all offer it.
Continuing further from our past article Priority Banking / Wealth Management Services: The reality of services offered, Here is the indicative list of banks which offer Priority Banking / Wealth Management Services in India

- Axis Bank

- Barclays Bank

- ICICI Bank

- Standard Chartered Bank

- Kotak Privy League

- Federal Bank

- Canara Bank :: Priority & SME Banking

Please note that above list is indicative only - there can be many more banks offering these kind of services.
The list of services mentioned in this series of articles on priority banking may not be offered by all these banks and new additional services may have been in the offering. The examples quoted above are based on the personal experience with the services, and these services are now discontinued by the authors.

Priority Banking / Wealth Management Services: List of Banks

Please check with your bank for all terms, conditions, charges and services offered before making and decision.
In case you have any inputs, please post them in the comments section.

What are the best alternatives to Priority Banking / Wealth Management Services ?
Follow the "Keep it Simple" Rule.
It's your money, you need to manage it - dont trust anyone else.

If you want to keep your money in the bank, simply for Flexi Deposits / Auto Sweep Fixed Deposits (See Details with Example). It is one of the best ways to keep money in the bank with high interest earning potential and easy liquidity on offer.
Priority Banking / Wealth Management Services

Priority Banking: The reality of services offered

noreply@blogger.com (Financial Advisors) — Mon, 24 Sep 2012 16:45:00 +0000

I am fine with these indirect charges, as I will get Priority Banking / Wealth Management Services ?
That depends upon your personal expectations and comfort. Let me repeat what the list mentioned earlier and
Continuing further from last article Priority Banking / Wealth Management Services: Hidden Cost & Charges with Examples,Let's relook at the facilities which are being offered in the name of priority banking and the practical use of them - one by one:

These special and privileged services might be as follows:

1) A dedicated account manager allotted to you
Great - you have a dedicated qualified experienced banker for you. You can call him anytime (during business hours) and seek his professional advice. But you really need one? I personally had this Priority Banking / Wealth Management Services services with two premier banks of India, and all these relationship managers would do is to try and make you invest in insurance policies, ULIPS and other similar schemes, which will eventually earn commissions (for them and their banks).
Being aware of the financial world, I never found their advices to be the best, rather the ones which will lock me in for long term regular committment for any insurance scheme or investment plan.
Other than that, what for would you need a relationship manager? You will still have to do all the banking work through the paper based forms, or through internet (on your own)
Personally, I did not find any practical use of such relationship manager services.

2) A dedicated priority banking lounge in the bank branch
Wow - I get a big air conditioned place with comfortable sofas to relax. But who in this world has got the time to visit the branch? And for what?
With all services available through self care internet and phone banking, who visits the branch now-a-days?
What's that lounge and sofa good for me if I dont even go there?

3) A dedicated children's play area in the branch (depends on availability)
One of my bank also had a children's play area with a plastic slide and few soft balls for kids to play. Who would take kids to the branch and how long will you sit and relax there?

4) Dedicated Phone based services like request for cash, demand draft, etc. which can be provided to you at your doorstep
You need cash - no need to go the ATM. Just call your relationship manager and he will arrange to send cash at your doorstep. Sounds good? But hold on.
Cash deliveries may be restricted to only 1-2 registered addresses (home or office only), not everywhere.
There is no guarantee that you will get cash instantly - it may take few hours.
Once the cash carrying person arrives, you will still have to provide him with a signed cheque for the mentioned amount addressed to SELF. Basically, this cheque will then be submitted to the branch.

So now with all bank ATM's accepting all other bank's ATM cards, what is more convenient for me? Call the relationship manager, wait for cash to arrive, write a paper cheque and then get the cash or simply walk to the next door ATM and withdraw it with my card?
Do we really need these kind of priviledged services and is there a practical use of it?

5) A dedicated investment advisor who advises you how to effectively use your money for investing in various investment or insurance or tax saving products
Same as what I mentioned in 1 above. Advisory services are not the best for you, but usually the best commission earning schemes for the banks.

6) So called priority is given to you in case you wish to get a locker at a branch (depends upon availability)
I doubt that as there is no transparancy in this and everything is subject to availability. You cannot verify the availability.
I approached the bank branch where I had priority banking status and my relationship manager mentioned that all lockers are already occupied. Later, I got a call from him mentioning that locker can be made available provided I invest in a particular ULIP with an initial amount of five lakhs.
I asked him how is it that it was not available earlier and now it will be available if I sign up for that ULIP, his response was that one of the customers is leaving the locker. There is a long queue of locker applicants and I being priority customer will be given that provided I go for that ULIP scheme. I then asked him that this is indirect way of selling products, he started giving reasons of high rental money of the bank branch and so on.
Effectively, since there is no regulation or no transparancy, all these facilities are simply at bank's discretion. That is driven by what you invest as per their directions.
I dont think this is priority banking, rather forced selling.

7) So called reduced interest rates for any loan applications you make
Same as above. Loan applications are reviewed on a case by case basis and banks take a call on what rate they offer. Even if you are a priority banking customer, you may still end up getting same standard rates.
Moreover, dont expect and priority treatment during the application process. You will still have to visit the branch several times and fill in all the paperwork.

Going by the above points, do the Priority Banking / Wealth Management Services make sense? Not to me.

Priority Banking / Wealth Management Services: Services Offered and realistic usage

So finally, I de-graded my priority banking account to normal account (which I had signed up for) and the other Priority Banking which was offered to my by my bank as an "automatic" upgrade, I've discontinued their priorty services.

The fact is that all these services offered in the name of Priority Banking can be done on your own at the computer through internet banking. It is much more time saving than visiting the branch or even calling up your so called relationship manager.
Although it appears to be free of charges, it comes at a hidden cost, so beware of that.
Interested, see the List of Banks offering Priority Banking / Wealth Management Services

Priority Banking: Hidden Cost & Charges with Examples

noreply@blogger.com (Financial Advisors) — Mon, 24 Sep 2012 16:43:00 +0000

What is the cost and conditions for Priority Banking / Wealth Management Services ?
The cost and conditions vary from bank to bank.
Continuing further from last article Priority Banking / Wealth Management Services: High Hidden Cost, Less Practical Use,
Usually, there is no cost associated when signing up for priority banking services. The only requirement is to keep a minimum balance amount (usually a high amount) in your savings bank account.

Some banks may even automatically "upgrade" you to a Priority Banking / Wealth Management status if you keep sufficient cash in their accounts for some time.
The minimum amount of bank balance required varies and depends upon a few factors.
Say for e.g., if you are a salaried person and hold a salary account with the bank, the minimum required balance for priority banking can be 50,000.
But if you are a normal savings account holder, it may high upto 100,000 Rs.

If it is at no extra charge and I have that much balance in my bank account, what's the harm in taking Priority Banking / Wealth Management Services
That's the million dollar question - and the answer to understand.
Just imagine it from the bank's perspective - why is the bank offering you such high class priviledges for fee without any charges solely on the basis of amount of bank balance you maintain with them?
The reason is that the amount of money you keep in your savings account, that earns the tiny 4% interest only. But if you push that money to higher maturity Fixed deposits, the interest earned could be as high as 10% i.e. 2.5 time more the interest income. See the next section for calculations

Priority Banking / Wealth Management Services: Cost & Charges with Examples

What do I loose for this Priority Banking / Wealth Management Services ?
Simple - it's the interest income that you loose and that can be as high as 2.5 times.
Let's see some calculations here:

Example Calculations for Priority Banking / Wealth Management Services

Example 1) You have a zero balance salary account with a particular bank. You have been keeping say 50,000 Rs. in their account for last few months. They offer you priority banking at no charges, but with only condition that your zero balance account will now become a 50,000 balance account. You feel that you anyways have money lying in the bank account, so why not take up the free-of-charge priority banking services. But you loose something and here's how:
Assume you keep 55,000 in your zero balance salary account.

If you make a FD of say 50,000 (keeping 5,000 for incidental expenses), and that FD gives you 10% interest, then your interest incomes is:
50,000 * 10% = 5,000 Rs.
5000 * 4% = 200 Rs.
Total 5,200 Rs.

But if you sign up for the priority banking services, i.e. you need to keep 50,000 as balance in savings account itself. You dont make any Fixed Deposits, then you earn the standard 4% interest so your interest income in one year is 55,000 * 4% = 2200 Rs.

Compare the two figures - 5,200 to 2,200 - its 3,000 Rs. higher or 2.4 times higher. This is what you loose (or pay to the bank indirectly) for this so called "free of charge" priority banking service. It's not a small amount.

Example 2) You have a normal savings account and you keep 250,000 Rs. on an average. The bank offers your Priority Banking but asks you to keep 100,000 Rs. as minimum balance. You agree with that thinking that you are anyways keeping 2.5 lakhs, so nothing wrong in signing up for this free of charge priviledges service? Here are the calculations about your losses:
If you sign up, you need to keep 100,000 in savings account. So rest 1.5 Lakhs you put in FD giving you 10%.
First 1 Lakh gives you = 4% * 100,000 = 4,000 as interest income
Next 1.5 lakh gives your = 10% * 150,000 = 15,000 as interest income

Total interest income in case of priority banking = 19,000 Rs.

In case you dont sign up for priority banking and keep minimum required 10,000 as balance and savings account and move rest 2.4 Lakhs in Fixed deposits offering 10% interest, then interest income will be:
10,000 * 4% = 400 Rs.
240,000 * 10% = 24,000 Rs.
Total interest income = 24,400 Rs.

Compare this (24,400) with that available from priority banking (19,000), you are getting 5,400 Rs. less. That's a big amount.
And that is the hidden cost of your priority banking or wealth management service which appears to be offered "free of cost".

One question that will come is by locking in your money in FD or Fixed deposit, you may not have access to it when you need it. But many banks offer what is called the Flexi Deposits / Auto Sweep Fixed Deposits: A Good Banking Service which get encashed automatically without the need to break the FD manually. Your money is with you always, offering you best of both - high interest of FD and ease of liquidity of savings account.
Let's see the Priority Banking: The reality of services offered

Priority Banking / Wealth Management Services: High Hidden Cost, Less Practical Use

noreply@blogger.com (Financial Advisors) — Mon, 24 Sep 2012 16:40:00 +0000

Details about Priority Banking / Wealth Management Services and whether there is any real benefit or use of such services, and what is the hidden cost you pay (Unknowingly) when you opt for such Priority Banking / Wealth Management Services
There is this new concept of Priority Banking / Wealth Management Services which was introduced into the Indian banking sector few years back. Let us look at that and its practical use.

What is Priority Banking / Wealth Management Services ?
Priority Banking / Wealth Management Services is a special "priviledged" status that is given to an account holder, usually based upon the amount he keeps in his bank account :-)
Typically, a threshold is set and if a customer is consistently keeping an amount above that limit in his bank account, then he can be offered Priority Banking / Wealth Management status allowing him some special services which are not available for other standard bank account holders.
These special and privileged services might be as follows:

1) A dedicated account manager allotted to you

2) A dedicated priority banking lounge in the bank branch

3) A dedicated children's play area in the branch (depends on availability)

4) Dedicated Phone based services like request for cash, demand draft, etc. which can be provided to you at your doorstep

5) A dedicated investment advisor who advises you how to effectively use your money for investing in various investment or insurance or tax saving products

6) So called priority is given to you in case you wish to get a locker at a branch (depends upon availability)

7) So called reduced interest rates for any loan applications you make

and so on.

Priority Banking / Wealth Management Services: Hidden Cost, Not so useful

As you can see, these services appear to be really good and beneficial, but what is the reality and how much does it cost?
Let's see in the following section: Priority Banking: Hidden Cost & Charges with Examples

7% DA Dearness Allowance Increase for Central Government Employees

noreply@blogger.com (Shobhit) — Mon, 24 Sep 2012 16:06:00 +0000

Details about 7% hike in DA or Dearness Allowance for Central Government Employees (in service or retired)
The good news or Diwali gift for the central goernment employees is just out - The DA or Dearness Allowance for all central goernment employees has been increased by seven percent. Here are the details of the same:

- The existing Dearness Allowance or DA is 65% of the basic pay for central government employees. It will now be 72% for all of them

- The reason for this DA hike is cited as a periodical exercise as Dearness allowance is revised in conjunction with CPI or consumer price index

- This hike or increase in DA will be gien to all serving employees as well as retired employees

- That means around 50 Lakhs in-service employees and another 30 Lakh retired employees will benefit

- This increase will be effective from 1 July 2012

- That will mean that employees can expect a good enough arrears payment from July to the month when this increased payment will be made

- This is reported to be the second bonanza for central government employees, because the Dearness Allowance was increased in March this year again by 7% from the then existing 58% to 65%

- Club this with the benefits offered by sixth pay commission - government employees are really getting big benefits.

General Sixth Pay Commission Salary Hike & Arrears Calculator (Indicative)

Salary Calculator for Pension calculations for Sixth Pay Commission Salary Hike (Indicative)

- This will mean a big burden of Rs. 74,000 Crores

Education Loans in India: Easy Availability, Heavy Burden

noreply@blogger.com (Financial Advisors) — Fri, 21 Sep 2012 08:40:00 +0000

Details about Education loans availability in India and the high cost & burden associated with it. Also covered are details of Education Loan Application Process

A few days back, for millions of (prospective) students across India, it was a good news to hear on the television when the Finance Minister gave a statement that no student education loan application can be turned down by a banker if the student has a valid loan application. As per BS news:
"Bank account is a right of an individual. It is not a gift of a bank and bank loan is a right of every student. No application from a deserving candidate, if he/she meets the parameters, should be turned down by the (bank) officer receiving it. If a loan is not given, the decision can be taken only at one level higher to the officer receiving the loan application," Chidambaram said.

As an independent individual, I dont think allowing every single student to apply and get a education loan is a good idea. What this means is that everyone who secures admission in any kind of college can be assured and guaranteed a student loan.

Let's momentarily look at the education scenario in India. For a moment, forget about the top notch institutes like IIM, IIT, NIT, AIIMS, quality government colleges, etc. Except for a few top institutes, the education space is majorly occupied by the average (and some even below average) institutes where quality and standards of education provided has always been in question. With the political class getting easy approvals to start colleges and institutes on their own (or through their relatives or friends), there has been a flood of professional institutions mushrooming in all parts of India.
Not just in cities, you can now find MBA colleges, engineering colleges, medical, dental & pharmacy colleges in remote areas and villages and sub-urbs in all parts of the country. Some have affiliations for admission with standard entrance exams, some conduct their own entrace exams, while some offer direct admissions. What quality of students (and teaching staff) is expected at such mushrooming colleges is a debatable question.
Guranteeing the education loan for all is going to send out a very wrong message. The low quality institutes (already charging a high cost) will start charging even more, stating that education loans are available so all high cost of education should be affordable.

By offering easy education loans in such scenario would mean that anyone and everyone who has secured admission and has eligibility is guaranteed of education loan. It sounds good and fair to offer loans to all candidates, but what may come as a pain is the repayment process for the candidate. After the course is over, the repayment needs to start. In case the quality of institute or the the students is not upto the mark, the question comes about their eligibility to employment. Whether they will be able to secure employment after course completion remains a big question.
Time and again Corporate India and several research studies have raised questions about employability of majority of professional course students in India.
Given these constraints, does it really make sense to offer education loans to one and all, just because there has been a secure admission and eligibility criteria fulfilled? In my personal opinion, it will cause a problem to both the student as well as the bank.

The reason is simple - a loan is a loan. However small or however big, however short tenure or long tenure - a loan remains a burden unless it is paid off in full and got rid off completely. When you take a loan, it means that you are spending your future income, something which you dont have now and EXPECT to get in future. There is a big risk of you not getting that expected future income, but your loan liability will continue to haunt you.

What if a student after completing the studies on such education loan is not able to secure a job or cannot start his own business. From where will he get the money to pay back the education loan? Fine to say that parents or others can help or mortgage property with the bank, but will that help practically? Once a student meets the harsh world of employment with high cost of living in cities, it is quite possible that even with his employment his salary may not be sufficient to meet the loan obligation. Job usually means a relocation to bigger city. The student goes there with an existing burden of home loan on his head, where will the student (now employed as a fresher) get the money to settle down in life - marriage, home purchase, vehicle purchase, other family liabilities, etc.)
Worst hit are the ignorant people from the lower rung, who have high hopes from our education system. They send their children to study at one fo these mushrooming not-upto-the-mark institutes by taking education loan, with a hope that he will study, get employed and will enable them to live a happy life. Unfortunately, the liability on the education loan haunts them forever. Even if the education loan is paid off, there are others lined up for life - vehicle loan, home loan, other expenses, etc.

By offering kind of guaranteed loans like this to all students irrespective of the quality of institute (or the student), the banks will end up having a risk of rising NPA's or non-performing assets. There will be a risk of default which will come if the students are not employable or fail to get a suitable salary sufficient to repay their home loans.
Overall, this does not look like a good move to enable all students to take education loan. The current education loan approval system, which is based upon the decision taken by the bank officers, may have some problems but it is still better.

Process of Education Loans in India

1) You approach the bank for education Loan after securing the admission to the respective college
2) Bank officer assesses your education loan application
3) After analysis of your education loan application as well as the candidates records and the perceived quality of institution, he/she provides you with the approval
The challenge or problems in the above process is that everything is dependent on the loan officer. If he she denies the loan application, there may not be any mechanism to get it reviewed or even questioned. Probably this is the issue that the finance minister is trying to address, but the suggestion to allow anyone and everyone to take a education loan will cause a bigger and widespread problem. A better option could be to set some guidelines for education loan approvals/denials, allow education loan seeking applicants to file for a review to higher authority if loan application is denied by first officer, and so on. Guranteeing the education loan for all may not be a good solution.
Education Loans in India

RINL IPO: Review Analysis & Details of Rashtriya Ispat Nigam Limited IPO

noreply@blogger.com (Financial Advisors) — Thu, 20 Sep 2012 03:20:00 +0000

RINL IPO Details, Review, Analysis, Opinion and information on RINL IPO
In this article we will look at the upcoming Rashtriya Ispat Nigam Limited RINL IPO.
Let's start with some basic details first:

- The size of RINL IPO is around Rs. 2500 Crores.

- This amount will be utilized in the business and production capacity expansion

What are the primary reasons for RINL to come out with the RINL IPO?
There are multiple reasons for Rashtriya Ispat Nigam (RINL) to come out with its IPO:
- RINL is planning to expand its manufacturing capacity to 6.3 MTPA
- It is seen as a part of initiating the 3,000 Crore Rs. divestment plan of the Government
- Rashtriya Ispat Nigam (RINL) got a Navratna status in November 2010. To retain that Navratna status, it needs to bring its IPO in two years i.e. before November 2012.
- It had earlier deferred its IPO twice in the recent past - first in June because of bad market conditions and second in July because of a fire breakout at it Vizag factory

RINL IPO: Review Analysis & Details

What is the issue size of the RINL IPO?
The RINL IPO size is Rs 2,500 crore.

What is the price band of RINL IPO?
The Face Value of each Equity Share is Rs. 10 each.
The price of RINL shares for this IPO issue will be decided by EGoM (Empowered Group of Ministers) most probably on 8th October and then publicised, as per the reports.

How many shares will be sold in the RINL IPO?
The total no. of shares to be sold through this IPO is not known precisely, at this moment.

What are the IPO dates for RINL IPO?
The final IPO dates for RINL IPO are from October 16 to October 18.
Shares are expected to be listed on October 31, 2012.

How will the capital raised by RINL IPO be used?
The capital raised will be used in:
For the expansion of its existing manufacturing facilities.

Any ratings given to RINL IPO?
No info about the ratings yet.

What are the analysts recommendations and business results for RINL IPO?
The government owned Rashtriya Ispat Nigam Limited is the second largest state-owned steel maker in India. Being a Navratna Company in steel segment, its stability and business are expected to remain stable. Investors can look for investing through the RINL IPO for a long term hold

List of Banks offering Flexi Deposits / Auto Sweep Fixed Deposits

noreply@blogger.com (Shobhit) — Mon, 17 Sep 2012 14:30:00 +0000

Continuning further from Auto Sweep: Example of Axis & HDFC Bank Comparison, here is the List of Banks offering Flexi Deposits / Auto Sweep Fixed Deposits:

What are the other banks offering these Flexi Deposits / Auto Sweep Fixed Deposits schemes?
Here is the list of Indian banks offering facility.
Please note that list is only indicative, there may be other banks offering similar deposit schemes. Please check with your respective bank and also for various terms and conditions before going for such schemes:

- Allahabad Bank - Flexi-fix Deposit

- Axis Bank - Encash 24

- Bank of India - BOI Savings Plus Scheme

- Bank of Maharashtra - Mixie Deposit Scheme

- Corporation Bank - Money Flex

- HDFC Bank - Super Saver Facility

- IDBI Bank - Sweep-in Savings Account

- Oriental Bank of Commerce - Flexi Fixed Deposit Scheme

- State Bank of India - Multi Option Deposit Scheme

- Union Bank - Union Flexi Deposit

- United Bank of India - United Bonanza Savings Scheme

Although I've not heard of any penalties being charged on customers for pre-mature withdrawal of money from such schemes, please check wit your respective banks about costs and charges involved. Indian Banking system is going through a dynamic phase and things might change.

Flexi Deposits / Auto Sweep Fixed Deposits Bank List

These Flexi Deposits / Auto Sweep Fixed Deposits / Sweep in Sweep Out Schemes are good for people who have extra money in their bank accounts lying for short or long periods, but aren't sure if they will use it in near of mid or long term future. Signing up for such Flexi Deposits / Auto Sweep Fixed Deposits will offer them extra interest and it is advisable for all classes of account holders.

Flexi Deposits / Auto Sweep Fixed Deposits

Auto Sweep: Example of Axis & HDFC Bank Comparison

noreply@blogger.com (Shobhit) — Mon, 17 Sep 2012 14:28:00 +0000

Continuing further from previous article Auto Sweep-in Sweep-out accounts: Beware of conditions and restrictions, here is a comparative analysis of 2 common banks offering the Auto Sweep/ Flexi Deposit/ Super Saver schemes.

What are the different kinds of Flexi Deposits / Auto Sweep Fixed Deposits Schemes available?
Differnt Banks offer different versions of these flexi deposit saving schemes with different conditions. Here, I'm quoting examples of two popular banks with whom I've used this Auto Sweep or Flexi Fixed Deposit scheme. However, before taking a decision on which bank and which flexi auto-sweep service you wish to go for, please check the details with the bank as rules might have changed.

Axis Bank Encash 24- offers everything automatic with just one time sign-up but conditions are a bit restricting.
- Minimum threshold amount is fixed at Rs. 25,000
- You need declare the tenure of your FD - it cannot be changed everytime for every FD
- FD's will be created ONLY in multiples of 5,000 above the threshold amount
- FD's will be created ONLY on specific days - say Mondays only
- You wont get any paper receipt for your FD, it will be visible only online

Benefit offered by Axis bank - after the one time sign-up everything is automated. Say if you set your threshold at 25,000 and 1 year maturity, the moment your savings bank accout balance reaches 30,000, the next Monday the FD will be created automatically for Rs. 5,000.
This option will suit account holders who do not want to do the manual work on their own every now and then and are OK with pre-defined tenure and limits on threshold and restriction of 5000 multiple.

Flexi Deposits / Auto Sweep Fixed Deposits Example

HDFC Bank Super Saver Facility - Offers same facility, but requires an account holder to do everything on his own. However, the big benefit is that the account holder can select everything while creating the FD online and is not restricted.

- You login to the online banking account site
- Saving Bank needs 10,000 minimum balance (AQB). You can create an FD of any amount above this amount.
Icing on the cake - if you have a FD of 50,000 or more, then you can maintain zero balance in your savings account. So even that 10K is not required in savings account once you create a 50K FD. entire amount can earn high interest. (Please check if this scheme is still valid)
- You can create FD's in any amounts, no restriction like multiple of 5,000
- You can select the tenure of each individual FD's. This is really beneficial because HDFC bank offers a bit higher interest (0.25% or 0.5%) on odd maturities like 1 year 16 days, 1 year 17 days and so on, compared to that offered on standard like 1 year maturity
If you use it effectively, you can get the best
- Once you create the standard Fixed Deposit, you then need to take the Super Saver on that. It's a one step process and is done online.
- You get receipt of your Fixed Deposit at your address

So if you track your bank balances frequently, and are OK to spend 5-10 minutes to create effective highEST interest offering flexi deposits, then HDFC bank will be a good option.
If you cant do such daily tracking of money and dont want the hassles of doing things on your own online, then Axis Bank is a good option, but it comes with the above mentioned restrictions.

There are more banks offering this unique service, check out List of Banks offering Flexi Deposits / Auto Sweep Fixed Deposits

Auto Sweep-in Sweep-out accounts: Beware of conditions and restrictions

noreply@blogger.com (Shobhit) — Mon, 17 Sep 2012 14:27:00 +0000

Details about conditions and restrictions in Flexi Deposit / Auto Sweep-in Sweep-out / Easy FD accounts
Continuing further from part I of this Flexi Deposits / Auto Sweep Fixed Deposits: A Good Banking Service here are details of conditions and restrictions in such scheme:

How is the Flexi Deposits / Auto Sweep Fixed Deposits different from normal Fixed Deposits?
One of the main benefit of "Auto Sweep Fixed Deposit Scheme" or Flexi Deposits is that they are "flexible". The FD will get created automatically once the amount crosses the threshold level, and the Fixed deposit will get automatically broken when you withdraw your money anytime.
In the anobe example of 100,000 with Flexi deposit, suppose you needed 55,000 after 2 months. You can withdraw that amount by writing a simple cheque or through ATM without any problems. Your Flexi-Fixed deposit will be automatically broken.

What interest is paid to me when I break my Flexi Deposits / Auto Sweep Fixed Deposits mid way
Say from above example, if you break your Auto sweep FD in 3 months when you made it for 1 year. Then, most banks offer the interest rates available for the period of FD. In this case, if the bank was having interest rate for 3 months as 6%, then it will apply 6% of interest on the amount of money withdrawn.

Conditions & Restrictions of Flexi Deposits / Auto Sweep Fixed Deposits

One more benefit is that Fixed Deposit is broken only for the amount of money withdrawn (or multiple specified by the bank).
In above example, yout total saving amount is 100,000 out of which 75,000 is in flexi FD and you withdraw 55,000. Remaining amount will be 45,000. So require threshold of 25,000 will still be available in savings account. FD will be broken for 55,000 and rest 20,000 will continue to remain in flexi-fixed-deposit.
This kind of benefit is not available in conventional FD, where you will be forced to break the FD for entire amount.

Continue onto Auto Sweep: Example of Axis & HDFC Bank Comparison

Flexi Deposits / Auto Sweep Fixed Deposits: A Good Banking Service

noreply@blogger.com (Shobhit) — Mon, 17 Sep 2012 14:25:00 +0000

Details about Flexi Deposits / Auto Sweep Fixed Deposits / Easy Fixed Deposits or FD in India and how to use them for maximum benefit.

Since last many years, many Banks in India (and abroad) have offered flexi deposit or auto sweep saving schemes. In this article, we will cover all the details of such Flexi Deposits / Auto Sweep Fixed Deposit schemes and see how to utilize them for good benefit.

What is actually a Flexi Deposits / Auto Sweep Fixed Deposits?
A Flexi Deposits / Auto Sweep Fixed Deposits is a special saving scheme where based upon a "condition", some part of your money lying in your saving bank account earns higher interest than the standard interest offered on savings bank account. For e.g. if the interest offered on your savings bank account is 4%, then it is possible to earn higher interest of say around 9% for some part of your money lying in savings bank account, based upon certain conditions.

Flexi Deposits / Auto Sweep Fixed Deposits working Explained with Example

How does a Flexi Deposits / Auto Sweep Fixed Deposits work?
Let's understand this with the help of an example and a simple chart.
Say you have 100,000 Rs. in your savings bank account. Your bank offers "Auto Sweep Facility" and you opt for it.
The Auto sweep fixed deposit facility is offered on a condition. Condition is that any amount above (say) Rs. 25,000 will get converted to a fixed deposit (FD) with say 1 year maturity and will give higher rate of interest as fixed deposits for 1 year. Suppose interest rate offered for 1 year FD is 10% per annum. So if you opt for this "Auto Sweep Fixed Deposit Scheme" with 1 year maturity period option, then this is how your money will earn interest:

Your amount: Rs. 100,000-00
Standard saving account interest rate: 4%
Bank offered 1 year Fixed deposit interest rate: 10%

Without "Auto Sweep Fixed Deposit Scheme", in one year your amount of 100,000 will become 104,000-00 Rs.

With "Auto Sweep Fixed Deposit Scheme", here is how the calculation goes:
Threashold Amount 25,000
Amount above threashold (100,000 - 25,000) = 75,000

Rs. 25,000 will continue to earn interest at standard 4% interest rate, while 75,000 will get converted to Fixed Deposit with 1 year maturity offering 10% (higher interest rate).
So assuming you keep 100,000 in your account for 1 year, after one year you will have:

- 25,000 + (4% of 25,000) = 26,000
- 75,000 + (10% of 75,000) = 82,500
Total = 108,500-00 Rs.

Now compare this amount to that gained when the entire 100,000 was kept without "Auto Sweep Fixed Deposit Scheme". You are gaining more than double interest with auto-sweep - 4,500 Rs. extra in this example

Continue onto Auto Sweep-in Sweep-out accounts: Beware of conditions and restrictions

Axis Bank Happy Ending Home Loan Review: Look before you Leap

noreply@blogger.com (Financial Advisors) — Mon, 10 Sep 2012 09:49:00 +0000

The much talked about Axis Bank-Happy Ending Home Loan Scheme (official site) is now open for home loan borrowers. But is that scheme really good and should home loan borrowers consider Axis Bank- Happy Ending Home Loan Scheme? Let's try to answer the question in this article and do a Review, Analysis and cover opinions and details about Axis Bank-Happy Ending Home Loan Scheme.

Related: Tax Benefits on Home Loans

Here are some of the constraints in the Axis Bank- Happy Ending Home Loan Scheme:

- Only available for "floating" interest rates, not fixed rates.

- Minimum tenure for this "Axis Bank- Happy Ending Home Loans" is 20 years which means customers are kind of forced into atleast 20 years long loan tenure to reap the benefits of this Happy Ending Scheme, even if they want a home loan with tenure of less then 20 years.
Now club it with the above point of floating interest rates of home loan. Usually, the when rates go upwards, the tenure increases. So if that happens anytime during your (atleast) 20 year period, your home loan repayment period will extend further.
Just for an example, if a 0.5% increase in floating interest rate in year 3 causes your loan tenure to increase by 18 months, what is the benefit of this "Axis Bank- Happy Ending Home Loans" waiving off the EMI of 12 months? Image courtesy official Axis Bank site

- If you make a small / partial prepayment, then the scheme benefit may no longer remain valid. Because due to your pre-paid amount, the tenure will come down and schedule of EMI payments will get affected. Minimum association tenure required is 180 months or 15 years.

- Clubbing of any other schemes (internal or external) is not allowed.
For e.g. many builders may offer payment of interest for x no. of months. Other promotional offer is builders pay interest till time of possession and so on. In all these cases (subvention schemes), the "Axis Bank- Happy Ending Home Loans" may not apply because it will mean a kind of prepayment and hence change in schedule so scheme gets invalid and home loan borrowers may not get benefit.

- Switch from floating interest rate to fixed interest rate is not allowed in this scheme

- Switch from high floating rate to low floating rate (usually offered to new customers) is available, but it can result in lesser tenure of your loan period. Therefore, there is a chance of Axis Bank- Happy Ending Home Loan Scheme and its benefits getting invalid.

- Increasing your EMI will also disqualify your "Axis Bank- Happy Ending Home Loans" scheme

- You need to complete atleast 180 months (15 years) with this scheme

- If at the end of 180 months (15 years), due to rate changes or other factors, suppose the no. of EMI's remaining are only for another 5 months. Then, dont expect Axis Bank to pay you back for rest 7 months of already paid EMI's.
After completing the minimum 180 months, the waiver benefit will be given ONLY on the minimum remaining EMI's i.e. 5 EMI's in this case and not 12 as per the initial offering

- In case of rising interest rates, the EMI may rise at the end of loan tenure. However, as per the details available on official Axis Bank site, the benefit will be given only for the initial low EMI amount of 12 months, not the higher EMI amount. It then means that despite getting the 12 months EMI waived off, one may need to pay the difference from his own pocket

- Home loan borrower is not allowed to reduce the EMI and increase the tenure in this scheme, without making a part payment

Review of Axis Bank Happy Ending Home Loan Scheme: Avoid the long committment

Usually, your income over a long period of time like 15 or 20 years, is not going to remain same - it usually rises. Hence, do you wish to carry on the home loan burden for long time with lots of money lying with you, just to get the last 12 EMI's waived off? The anwer will be no.

Related: Home Loan Tax Benefits

Related: All Home Loan Articles

Even if you say yes and are willing to continue with the loan for that long period, please note that it comes at a cost. First you are paying interest on every single month that passes by. The longer the loan tenure, the more interest amount you pay (high cost of loan). Second, as long as you are having one outstanding loan, you may no be eligible to take another one till you clear first one. That means you may not be able to buy second property or take any other loan. Third, all banks now-a-days ask for a co-applicant along with primary applicant. The name goes in the bank records so the other co-applicant might also have difficulties in taking a seperate loan till you clear this loan.

I personally dont like the idea of carrying the loan burden over a long period of time. The longer the loan tenure, the more amount you repay to the bank. The sooner you pay back your loan by pre-payments, the better. Forget everything else, just think about the mental peace you will have when you are debt free with no more loans on your head.
Unfortunately, this "Axis Bank- Happy Ending Home Loans" does not offer you that flexibility - not alteast for 15 years.

Overall opinion about Axis Bank-Happy Ending Home Loan Scheme

Even if you stay with this scheme for minimum 15 years with a minimum 20 years loan to start, the full benefit of 12 EMI waivers is not guaranteed.
Overall, this "Axis Bank- Happy Ending Home Loans" scheme might look good in the first sight, but it is kind of locking you in for long term. It is good for someone who is completely OK with a lock-in period of atleast 15 years and a home loan starting with 20 years tenure and does not worry about the loan burden, increasing interest and is fine to pay high tenure of EMI payments to reap benefits of 12 EMI Waivers.

Now with pre-payment charges taken away by all banks and NBFC's on home loans, and with incomes rising over a 15-20 year periods, it is better to get rid of loans sooner by pre-paying the amounts rather than holding onto long term loans.
Tax Benefit on home loan will apply as standard.
In my opinion, the home loan customers should go with the normal standard home loan scheme with no pre-payment penalty and get rid of loans as soon as possible.

Stock paying Dividend in September 2012

noreply@blogger.com (Financial Advisors) — Tue, 04 Sep 2012 05:42:00 +0000

List of Indian Stocks which are paying dividends in the month of September 2012

Every stock trader as well as investor loves payment of dividend. Because that constitutes a kind of income for him/her. For long term stock investors, it is like a timely reward where some amount of money is unlocked for him at present. For short term traders, it offers trading opportunity if they are quick to capitalize on it.
Here is a list of shares in the Indian stock market which are expected to pay dividends in the month of September 2012.

Stock Name	Ex Dividend Date	Dividend (%)	Face Value (Rs)	Dividend yield (%)	Dividend Per Share (Rs)
Gujarat Industries Power Company	07/09/2012	25	10	3.6	2.5
H P C L	30/08/2012	85	10	2.7	8.5
HEG	07/09/2012	50	10	2.5	5
IDBI Bank	31/08/2012	15	10	1.8	1.5
Indian Oil Corporation	05/09/2012	50	10	2	5
Mangalore Chemicals & Fertilizers	18/09/2012	12	10	2.6	1.2
Munjal Auto Industries	13/09/2012	100	2	4.4	2
Navneet Publications	20/09/2012	40	2	1.5	0.8
Neyveli Lignite	30/08/2012	28	10	3.4	2.8
PTC India	12/09/2012	15	10	2.6	1.5
Tamil Nadu Newsprint & Paper	12/09/2012	50	10	4.4	5
Titagarh Wagons	06/09/2012	80	10	2.6	8
Unichem Laboratories	13/09/2012	150	2	1.8	3

Please note that the above details are collected from publicly available information as well as something received from stock brokers so E&OE. There may be errors and the accuracy is not guaranteed. Information is provided for information only and this site will not be responsible for any errors. The investors/ traders or any individual using the above details are requested to verify it before taking any financial action.

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