What is Systematic Withdrawal Plan?

What is Systematic Withdrawal Plan? You must have heard about Systematic Investment Plan and it might be that you have subscribed for this plan. But, have you ever heard about Systematic Withdrawal Plan? Did your Investment Adviser ever advise you for it? I am going to give you full information about it, in this Article.

systematic withdrawal plan

What is Systematic Withdrawal Plan.

It is a facility provided by Asset Management Companies, in which Investors can withdraw a part of their investment in a stipulated time period.

It is like a Monthly Income Scheme provided by Banks and Post Offices. Investors generally use this plan to gain a continuous income from their Mutual Fund.

Investors want to find a certain amount of their profit in a stipulated time period. It can be monthly, half yearly or yearly basis.

Investors, generally invest in this plan thinking that after a certain time they withdrew the profit and they expend that amount on their tour plan or for their Daughter's Marriage.

There are two options provided by Asset Management Companies to the investors, one is Fixed withdrawal option and  second is Appreciation Withdrawal option.

Systematic Fixed Withdrawal

In the first option investors are allowed to withdraw a certain amount after a certain time on monthly, quarterly or half yearly basis. Investors ensure in the beginning of the plan that what amount they want and when it be needed.

Appreciation Withdrawal plan

In this option AMCs give facility to investors to withdraw appreciated amount after a certain period. It is just like Monthly Income Scheme. And it is just opposite of SIP.

Benefits of  SWP.

An investor can create a regular flow of income from his investment in this plan. If the investor want to have periodic incomes for their needs, he should go for this option.

It should be created in such a way that he could get the money when he needs the cash most. If a serviceman is going to retire after twenty years, then he can invest in a Mutual Fund Plan with SWP option.

In this way he sets the required amount to be withdrew every month as pension. As you know that government has abolished the provision for Pension these days. So, it is a substitute for pension too.

So friends, if you like this information useful then let me know, with your comments in comment box.

E-gold/ what is E-gold/E-gold investment

E-gold! Gold has always been a investment destination for the people across the world. It has always given good return over a period of time. People traditionally invest and store them for bad times. But there is a problem with the safety of gold. There has always been an apprehension for theft and robbery. But with e-gold there is not such type of apprehension. It is a non-traditional way of investing in gold.

E-gold

What is E-gold?

E-gold is an electronic form of the  natural Gold. It is traded on National Spot Exchange as an electronic form of Natural Gold.

If one buy a unit of e-gold at the National Spot Exchange, the same amount of natural gold are kept in a safe house and you get the no. of units equivalent to your invested amount.

You can get its physical delivery as your wish. National Spot Exchange facilitate a platform at the national level for gold trading. It ensures its price and purity.

It is sold in the denominations of one gram and its multiples. Its one unit is equivalent to one gram. It is stored in your Demat account with other securities. It is a simple, quick, reliable and cheap way of investment.

Benefits of E-gold

There are so many benefits of E-gold that it is rapidly going popular in investors.

• This is the reason for its popularity in general mass. When someone buy natural gold from a shop he cannot be sure of its purity but with E-gold there is no such apprehension. E-gold is sold with its maximum purity.
• If you have gold in its physical form there is always a risk of robbery and theft. You keep it either in a safe place or in the Bank locker. But in E-gold your gold is kept in a safe house at a warehouse of NSEL and the equivalent unit of E-gold is kept in the electronic form in your Demat account.
• The E-gold is available in one gram denominations and its multiples. If you wish to buy one gram of natural gold, it will be a little difficult for you. So, E-gold is very convenient.
• Transaction of E-gold is very simple than natural gold. It is sold by one clique of your computer Keyboard. And you can buy it by the same way.
• The price of Natural gold varies region to region. But the price of E-gold is same across the whole country.
• You have to sell the Natural gold at a discount but the E-gold is sold at same market price.

All the above features of E-gold make it very popular investment option. It has given a very good return over a period of time.

So friends what are you waiting for, make use of this investment option. If this article is any use of you like and comment it.

Systematic Investment Plan

Systematic Investment Plan

What is Systematic Investment Plan?  What is its purpose? In our modern society there are many investment tools are available, but we do not know much about them. 

These tools are able to counter the effects of Inflation. We only know and use traditional ways of investment like fixed deposits and insurance.

Today I am going to answer these and many more Questions like this in this article. 

What is Systematic Investment Plan

systematic investment plan.

It is popularly known as SIP. SIP is a way of investment in Mutual Funds. 

If you plan to invest a certain amount in a particular MF  in Weekly, Monthly, Quarterly or Half yearly basis, it is called a SIP. 

The SIP amount could be as low as 100 rupees. Every time when you invest you get certain no. of units. 

Every unit have a value that is called NAV. The NAV( Net Asset Value) is determined by stock market. 

As you know that in a mutual fund your fund is invested in share market by The Fund Manager of that Mutual Fund, its NAV value fluctuates according to the share prices. 

If the market is down, the NAV of the said fund is low and you gets more Units. And if the Market is high, the NAV of the said Fund is also high and you get less No. of units accordingly.

How to start a Systematic Investment Plan.

SIP in Mutual Fund is very beneficial in long time. So, First you should determine your investment goal. 

Second, you should determine your Time Period to get that Goal. 

Third, You should determine your SIP amount. 

Fourth, You should determine a good Mutual Fund plan. 

You should take a investment adviser for that. Since your SIP amount Debits automatically from your bank's Saving account, so you should have a Saving Account with Cheque Book facility. 

Benefits of Systematic Investment Plan.

If you get invested in Ten years or more it will be very beneficial for you. Some Awesome benefits of SIP-

• Discipline in Investment- Discipline is a key to success in a long term investment in SIP. Your small investment becomes a large corpus in a long run. 
• Flexibility- Although it is advised to invest for a long term in Mutual Fund but you may exit anytime from your Plan and stop your SIP.
• Cost averaging-When you invest in a MF through Systematic Investment Plan there is a good possibility for you to buy it at average purchase price. So, it gives you the benefits of Cost Averaging.
• Power of Compounding- It gives you the Power of Compounding and the Power of Compounding works very well in the long term. 

So, friends Systematic Investment plan is becoming very popular these days as SEBI is projecting it.
If you like this post helpful please comment in the comment section. Thank you! 

Equity linked savings scheme.

Equity linked savings scheme

Equity linked Savings Scheme(ELSS). Friends, today I am going to give you detailed knowledge about The ELSS, in this article. The questions like, What is ELSS? Why is it so important for you?, will be discussed in this article.

Equity Linked Savings Scheme.

What is ELSS?

As I have already written above ELSS stands for Equity Linked Savings Scheme. ELSS is a type of Mutual Fund that gives tax benefits also. You can invest up to Rs 1.5 lac in ELSS schemes and claim for tax rebate accordingly, under section 80C of Income Tax Act 1961. It is a very important investment option for salaried Government Employee.

What is difference between ELSS and Mutual Fund.

There is no fundamental difference between them. Both are Mutual Funds.The only difference between them is tax benefits and lock-in period. You can avail the facility of tax benefits in ELSS. There is a three year lock-in period in ELSS. Your money is invested in stock market in both items. After three years lock-in period you can exit any time from ELSS. You have not to give capital gain tax on it at the time of redemption of your Fund. If you want to continue after three year lock-in period, you may continue. Mutual Funds on the other hand are liquid in nature, it means you can exit from it at any time. Mutual funds are taxable.

How One Can Invest in ELSS?

There are two methods of investment are available for you. You may invest by Lump Sum amount or you may opt for SIP option. Here SIP means Systematic Investment Plan. If you invest in a Mutual Fund in one go, it is called Lump Sum amount, and if you invest a certain amount every month in a Mutual Fund, it is called SIP. It will help you spread the risk and give you the benefit of cost averaging. You can take the help of Any investment adviser of ICICI, kotak Mahindra, SBI, Tata, ABSL, Quantum Mutual Fund. For investing in a Mutual Fund you should have a bank account with Cheque facility and a Pan Card.

So friends if this information is any use for you give your comments and like this article.

How to Get Personal Loan?

How to Get Personal Loan? Everyone of us in our life go through in a phage in which we badly need of money. Be it, our daughter's marriage ceremony or repaying of credit card loan, we need money. When nobody help us, we go to banks and apply for Personal loan, as it is very easy to get. So friends, today, I am going to talk about Personal Loan. I will talk about, what is the process of personal Loan, what is its interest rate, repayment period and everything related to it.

What is the personal Loan

Personal Loan is a type of unsecured loan used by the people for meeting their day to day financial needs. There is no need of any kind of  pledging security or collateral for getting it.

It is very easy to get. All banks either Nationalized or Private offers Personal loan. It is very popular among people. If you have regular source of income like Government Job or Private job, banks easily give you Personal Loan. It is given for following purposes-

• For Marriage expenses.
• For Renovation of house.
• For purchasing Consumer Durable Goods.



How to get Personal Loan

• For Repayment of Credit Card Loans.

Procedure of personal Loan.

Banks have made it very easy to get Personal Loan. They have removed the necessity of Guarantor. Application forms for Personal Loan has been made easy. Ticket fee for agreement has been reduced. Following documents are needed for Personal Loan-

• Latest Salary Slip showing deductions.
• Income Tax Returns of last three years.
• Voter's ID Card or Driving Licence for proof of identity.
• Copy of ration card, Electricity Bill, Passport, Voter's I-card for proof of residence.
• Last six months salary statement of Account where is your salary is credited.
• Pan Card's true copy.

Interest Rate

It is a very costly loan. Usually banks charge interest at the rate of 13 to 15% per annum on Personal Loan. It depends on RBI's Base rate policy. So, take this loan, only if, you have urgently need of short term need of money. 

There are two options of Interest rates offered by banks, one is Fixed Rate of Interest or another is Floating rate of Interest. Both have their own advantage or disadvantage.

In the Fixed rate of interest, interest are fixed for whole repayment period, at the rate of interest, prevalent at the inception of the Loan. In this option, the interest rate is kept stable for entire loan repayment period. If banks increase or decrease the interest rate there will be no effect on your loan as you have already opted for Fixed rate of interest.

In the floating interest rate, interest rate fluctuates according to the RBI's Base Rate Policy. If you opt for this option, your interest rate is often increased or decreased by banks according to the RBI's Base Rate Policy. Most of the people opt for this option.

Repayment period and EMI

The repayment period of the personal loan is generally 3-5 years. The monthly repayment amount or EMI depends upon the proposed repayment period and the rate of interest. If you opt for three years repayment period your EMI will be high and if you opt for five years repayment period your EMI will be low. 

The entire loan amount is divided in to Equated Monthly Installments. This equated monthly installment is called the EMI. The number of equated monthly installments may increase if the entire loan with interest, cost, charges and expenses is not repaid by the stipulated number of equated monthly installment.

Processing charges or other fees.

Banks takes processing charge on every Personal Loan. It depends upon your loan amount. It is generally charged on every lakh rupees of sanctioned loan. Banks cut this processing charge from the personal loan itself. The stamp duty on agreement paper is also charged by bank.

So, friends if this article is any use for you, like comment and share this Article.

What is the procedure of Home loan?

Everyone dreams to have his own house. We save money or earn a lot, so that, we can build a dream home. We buy a good Plot and start thinking how to construct a beautiful home. Many of us are of low income group and are not able to have our own home. But you should not be anxious, Government and Banks help you construct your own home. You can apply for Home Loan to any nationalized Bank. Government of India has provided you special facilities of getting Home Loan at lowest interest rates under Pradhanmantri Awas Yojna-Credit Linked Subsidy Scheme. In this scheme borrower can avail the facility of subsidy on interest. which results into lower installment amount and lower interest rate. This scheme has been launched for economically weaker sections, low income groups and middle income groups of society.

One of the primary conditions of the scheme is that you must not own Pucca house either in the name you or your family members which includes you, your wife/husband and children.

Generally bank offers 8.67% interest rate on loan amount. But under this scheme banks provide subsidy on interest which may be a maximum of 2.67 lac and this subsidy is credited to your loan account at the end you complete repaying loan account with all interests. You can not avail such facilities in other loan schemes.

How to get this loan from bank.

1. You have to visit nearest branch of any bank and get Home Loan application form. Before submission of application you must ensure that the piece of land at which you desire to construct home should be either in your name or in your spouse or both. Bank ensures the ownership of land, so that, its market value could be ascertained and if you fail repaying loan amount and becomes bankrupt, bank could recover loan amount by auctioning of the house.
2. You must have original copy of Deed of the land in your custody.  Bank takes its custody before sanctioning loan and keeps it in its possession till the end of repayment.
3. You must have certified copy of Mutation issued by circle office of the area(Original copy of the document needs to be attached with application form). This document too is taken by bank.
4. You must have original copy of Land Possession Certificate.
5. You must have original copy of current revenue receipt issued by Circle Office.
6. You must have layout of the said land sanctioned and passed by Nagar Parishad if the land lies in town area. But if in village area the layout should be counter signed by Mukhia( Head of Gram Panchayat) only.
   
7. You must bear a copy of estimate of entire plan which is prepared by a engineer authorized by Bank. This estimate cost and plan should be in correlation.
8. Legal opinion is prepared by authorized Legal Adviser of the bank. This is meant for ascertaining ownership of the said Land.
9. The evaluation of the said land with MVR and market value is calculated by authorized agent of the bank. He visits the land for physical verification and then reports geo position of the land. He takes pictures of the land. He records longitude and latitude and collect information regarding all sides of the post.
10. If you are a government employee, you must have attach a copy of your Salary Slip.
11. A copy of income tax return or Form-16 is also needed so that your income within tax limits could be ascertained.
12. It is bank's discretion to demand disclosure of details of your property in all forms like share, debenture, gold, ornaments, LIC, and other movable or immovable property.
13. Bank also wants to know about net-worth of invested amount in other savings scheme.
14. You must disclose the name of Nominee who will repay the loan amount in your absence.

After some procedure is followed up, bank make you fill up a affidavit. Then after following some other necessary steps all above said documents are held in possession of bank and first installment of loan is released in your bank account.

Pradhanmantri Awas Yojna-Credit Linked Subsidy Scheme comes in effect in the last when loan amount is disbursed. Bank authority send your details to National Housing Bank which after necessary checks approves the subsidy and sends subsidy directly to the loan account of the borrower.

I hope this information will be very useful to all of you.

What is Mutual Fund.

 What Is Mutual Fund

Mutual fund is a fund where money is collected by general public and it is invested in share market. Compony which collect funds from public is called Asset Management Compony(AMC).

There is a fund Manager for every Mutual fund, who invests the collected fund to the stock market and gets profit. This profit is then distributed to Investors. 

The AMU which manages the fund charges some fees for their service. It is called Expense ratio.

source: pixabay.com

There are so many Mutual Fund companies available in the marked, such as ICICI Mutual fund, SBI Mutual Fund, Kotak Mahindra Mutual Fund, Birla Sun Life Mutual Fund and so on.

 

And there so many schemes of every Mutual Fund. There are Large cap fund, Mid cap fund, Small cap fund, Hybrid fund, ELSS fund, Sector fund etc.

Your money in Mutual Fund is generally invested either in Debt or in Equity.

 

In Debt Fund ,your money is invested in Government securities, Treasury Bills and Debentures.

 

Government issues this instruments to the public to raise fund and gives interest on it.

 

In equity fund your money is invested in The Stock Market. There are so many Equity Mutual Fund also.

What Is An AMC.

Every AMC is managed  by a professional Fund Manager. He decides to invest or disinvest in a particular stocks. 

The performance of every Mutual fund depends on its Fund Manager skills. 

So, before investing in a Mutual Fund one must see the past performance of that Fund Manager.

You can invest in Mutual Fund either by Lump Sum amount or by SIP. 

In SIP you invest in monthly basis. You can open an SIP account by as minimum as 500 rupees per month. 

This account can be opened in any bank with auto Debit facility. Every month on a fixed date your Investment Amount is cut and sent to your AMU, and then you get no. of units. Every Mutual Fund Scheme has a value of its one unit. It is called NAV of that scheme. If you invest 1000 rupees in a mutual fund scheme which NAV is 20 rupees, then you get 50 units of that scheme. After one year if NAV of that scheme is increased to 24 rupees. Your profit will be 200 rupees.