My Mutual Fund investment always helped me in making money and improving my livelihood. Mutual Fund Investments always comes along with market risks but its liquidity factor never caused me huge losses. But as the sole meaning of an Investment is to create wealth by investing for long term, the Mutual Fund investors always have fear of losing their money due to unstable equity market.

Recently I was introduced to Bajaj Capital’s Systematic Investment Plan for Mutual Funds Investments which not only facilitates the investor by creating wealth by the power of compounding and the averaging factor for the long future but also created a habitual form of investment for me where the money is automatically debited from my bank account monthly (options are of weekly and quarterly as well). And the advantage of Rupee Cost Average and the Compounding power the accumulated money over the time is used in buying more units which due to market volatility creates money for me. Bajaj’s SIP Return Calculator which helps in determining the value of the investment over a period of time on an expected rate of return.

To rely on Bajaj Capital for my SIP Investment because of their varied SIP options and their decades of experience ensured me of creating and saving fortune for me and my family’s future and has helped many of the non-regular investors as well because of the liberties of entering and exiting from the equity market during the investment and creating a negligible chance of loss to them.

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India is one of the largest and fastest growing economies in the world. Our standard of living is rising, and along with it our wants. Hence the need for wealth creation. It is also reflected in the rising consumerism in the country, and the increasing number of credit and debit cards. And with that number, chances of card fraud increase as well. Since wealth protection is the other side of the coin, here we look at what measures you can take in case of theft or loss of card.

The first thing to do is to report the missing card to the bank and get it blocked. According to the Reserve Bank of India (RBI), it is the banks’ responsibility to provide protection against and fight frauds. Once you get your card blocked, you won’t be liable for any transactions that happen after this. Credit cards typically have stronger fraud protections than debit cards.

Process

You should lodge a First Information Report with the police and get an acknowledgement. You will be required to submit a written application, with details such as the card number, bank account number, and the date of loss. The bank will issue a new card in place of the stolen/lost one.

Liability

Most banks have a zero liability policy, which means that you will not have to pay anything against the expenses occurred during the period between the loss and you reporting the theft. You should be clear on the bank’s policy regarding this before you issue a card. For example, some banks give a time period of 7 days to report the loss of card.

It is important to always monitor your transactions, and if you see any suspicious activity, report it to the bank immediately.

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Amidst the recent unpredictable conditions of the market, we gradually see the worth of equities fading away, and bonds coming up as the next big thing. Bonds offer relatively stable returns, which are much needed today. Investors should have an idea of some factors before they go on to invest in bonds.

Returns

The asset class offers an annual interest rate of 8-11% , and a return, which is as good as that offered by bank deposits. However, higher the rates mean higher the risks, and this needs to be looked into by investors before investing.

Ratings are Not Everything

Ratings are not the only answer to the number and kind of risks involved in bonds. There could be newer and worse risks at later stages. For example, in case of any restructuring or acquisition wanted by the issuer, the debt burden is likely to get bigger gradually. In other cases, ratings may not be updated with the company’s credit profile. Such are some flaws with ratings, and investors should look beyond these ratings.

Premature Exit

Pre mature exit might expose the investors to the unstable interest rates, and would not be beneficial. Moreover, the liquidity of these bonds is the another important pointer that ought to be taken into consideration while planning the exit .

Risk Return Balance

The most important mantra in investment is to find that one perfect asset, which has the most balanced risk-return proportion. For example, certain types of bonds known as ‘putable bonds’ give more rights to the investors, and thus their coupon rates are lower. Such factors need to be considered before investing.

Investing is no child’s play and it must be done with utmost care, caution, and advice. You do not want all your money going down the drain because of that little extra return coming at the cost of a huge row of risks. Invest wisely!

For more information, visit:- http://www.bajajcapital.com/

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The Reserve Bank of Indian (RBI) and the government are keen on retail investors accessing the government securities market. In its latest attempt, RBI has allowed demat account holders to invest in G-Secs (Government Security) through depository participant banks. Buying G-Secs can be as simple as buying equity stocks through a broker.

Direct Investing

Direct investing is appropriate for investors, who are looking for fixed payouts in the form of interest payments. G-Secs are safe as there is a guarantee by the government, with respect to interest and principal payments. Also, there are no intermediary costs as you buy directly from the government.

Gilt Funds

Gilt Funds are mutual funds where you invest only in government securities. Usually risk averse, and conservative investors, who want to invest in the shadow of secure government bonds prefer it. Here, the investors are protected from credit risks.

If you are not interested in investing directly in the G-Secs, you can buy Gilt Funds. It is same as buying any other mutual fund scheme.  You can directly approach a fund house or visit their website. Even after the recent initiatives from the government, investing through the funds route is still quite easier.

But why would a person, who already indirectly holds government papers through PPF or bank FDs, be interested in Gilts? There are two types of people who may benefit from the Gilt Funds. First, the high net worth individuals, who may want to benefit from the extra yield that listed bonds sometimes give. Secondly, working individuals, who would otherwise buy an annuity for their post retirement income.

In conclusion, you should have at least a 3 to 4 year investment horizon, and moderate risk appetite to invest in mutual funds. You should consult with your financial advisors to discuss whether these mutual funds suit your investment strategy or not.

For more information, visit: - http://www.bajajcapital.com/

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According to the Insurance Regulatory Authority of India (IRDAI), the claims settlement record of insurance companies improved in the Financial Year 2015. But what is Claims Settlement Ratio (CSR)? It is defined as the number of claims settled against the number of claims received. It is usually measured in terms of percentage. For the private sector as a whole, the claims settlement record rose to 89.40.

It’s no secret that the mis-selling of insurance products is a widespread problem in India.

While there is enough literature on factors to consider before buying a scheme – the sum insured, policy term, optional riders, etc., the Claims Settlement Ratio is not given due importance. In fact, the very purpose of insurance gets defeated if the claim is not paid.

Thereby, before buying insurance, you should consider those insurers, who holds a claim settlement of 85% or more. As customers, we are equally responsible to make the right choice.

Thesecond most important aspect is the duration of the settlement, i.e how fast you get the proceeds after making the claim. You should look at the percentage of claims settled within 30 days. A ratio of more than 80% is a good reference point to help you choose the insurer company.

Buying insurance is now simpler with the advent of online comparison platforms. But, the most critical step is to choose the product that fits your need. Price is an important parameter, but look at the price in conjunction with Claims Settlement Ratio.

Insurance from a company that avoids paying the claim is worse than having no insurance at all. So, before buying insurance, it is essential to have a clear idea about the claim settlement policies of the insurance company.

For more information, visit :- http://www.bajajcapital.com/

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The past few months have brought a lot of cheer to Mutual fund investors. After the guidelines by the Securities and Exchange Board of India (SEBI) to Fund Houses to disclose details relating to the remuneration of managers for transparency, its new circular says that Mutual Fund redemption up to Rs. 2 lakh by investors cannot be restricted anymore. In the case where the amount exceeds Rs. 2 lakhs, the first Rs. 2 lakh will be redeemed without any restriction. Since for most retail investors, investments are below or around Rs. 2 lakhs, this guideline will be hugely helpful. It was a major problem earlier, even for the top 10 Mutual Funds.

Asset management companies (AMCs) can impose restrictions on redemptions by investors only when there are issues that could lead to a systemic crisis rather than based on entity specific instances. 

• Under normal circumstances there can be no restrictions on investor’s redemption for open-ended schemes – whatever be the amount. 
• The circumstances when the restriction would apply would be when there is an overall market crisis, and not when there are issues relating to any specific fund house.
• Even in the case of systemic crisis the fund house can only impose restrictions on the amount above Rs. 2 lakhs. Another exception when the redemptions may be restricted is when there is a temporary sanction due to overall market closure. Even then it cannot be for more than 10 days.

This new move is thus small investor friendly. So expect more people to get rid of fixed deposit calculators, and go for debt mutual funds.

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In this world of chaos, frauds and hectic schedules, investing your money in the right place is a challenge. Choosing the right entity to handle your hard earned money is a life changing decision. SIP or Systematic Investment Plan is a great option to reap good benefits. SIP Investment plan is basically an investment system offered by mutual fund companies to investors. It allows the investors to invest small amounts periodically instead of depositing heavy amount of money at a time. The frequency of investment in such SIP Investment plan is weekly, monthly or quarterly.

SIP plans offer is a well disciplined investment scheme that helps to create your wealth in long term while reducing the risk of market volatility. This investment plan follows the scheme of depositing a fixed amount of money in bank accounts periodically and invested in a specified mutual fund. SIPs are also flexible, wherein the investors can stop investing in the particular plan at any given point of time, or increase or decrease their amount of money deposited.

It has emerged as a safe and good choice of investment for those who do not have much understanding of financial markets. Bajaj Capital Ltd in India is the flagship company of the Bajaj Capital Group and is a premier Investment Services Company with over 50 years of experience in the financial industry. They have one of the best SIP Calculator India. SIP calculator helps you to calculate the wealth gain and expected returns for your monthly SIP investment from which you can make a rough estimate on the maturity amount based on a projected annual return rate. When you invest with Bajaj Capital, be rest assured of good returns and safety.

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Once bitten twice shy! This holds true for thousands of people, who start investing before acquiring proper knowledge. What should be your first Mutual Fund investment? The answer differs depending on the investor's age, risk capacity, etc. Let’s discuss some MF fund categories which are good options for first time investors.

Balanced Funds

These funds invest in equity as well as debt. These are hybrid funds. Diversification of equity and debt portions is done in order to avoid any concentration of risk. Debt provides safety from precariousness in equity markets and is very essential for people investing for the first time.

Experts say that these kinds of funds are perfect for first timers because of their pre-determined equity-debt mix.

Large Cap Funds

These funds have a very diverse portfolio, as the schemes invest most of their assets in large companies, keeping the first timers safe. Stability is a major factor here because large companies are less volatile, and that is good for novice investors. Tax-free long-term capital gains are another plus point for large cap funds.

Index Funds

The portfolio of these funds is an index and these hold stocks in exactly the same proportion as their weight in the index. No fund manager risk is entailed in these funds, as there is no call taken by them to increase or decrease holdings.

Tax Saving Funds

This is preferred by most retail investors, as this investment is eligible for tax deduction under Section 80 - C of the Income Tax Act. Because of having a three year lock-in, tax saving funds are considered advantageous. However, some financial planners consider them not so good for beginners.

Apart from this, there are other factors that need to be taken into consideration before investing for the very first time. Do consult your financial advisor before you make the decision.

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Choosing the right product, is the toughest part in any investment decision, be it Mutual Funds, stocks or commodities. The biggest mistake that investors usually make is by choosing a product simply on the basis of its past performance. There are also other considerations to ponder, such as charges, downside risk, consistency etc. Let us look at some important factors that you must consider while choosing a mutual fund.

Quality of Fund Houses

Faith is an important factor in Mutual Fund investment. In order to choose the best scheme according to your needs and requirements, you must first identify reliable fund houses. The fund houses need to have a strong history in the financial market and a decent track record and consistency. A strong base is the key to a stronger empire. Thus, consistency is the key, and a good Mutual Fund scheme is one that manages to outperform its benchmark over 3-5 years. Choose a trustworthy fund house.

May The Odds Be In Your Favour

Risks are a part of every venture in life. In the investment sector too, nothing can be achieved without taking risks. However, for every prudent man, the proportion of risk vis a vis the returns should be a big decisive factor. What would make a worthy Mutual Fund? Same level of risk, yet more returns than the others. There is no greatness in risking everything for very little return, and this should be kept in mind while choosing your fund.

PortfolioDiversification

The basic characteristic of a Mutual Fund is to facilitate diversification across assets, stocks etc. Such a portfolio tends to be at a lower risk than other portfolios concentrated in a particular area. Portfolios of various schemes of fund houses are available for a quick-glance at the websites of the fund houses, and these schemes should be carefully observed and analyzed, perhaps with the help of a financial advisor. A well-diversified portfolio history is what makes the fund worth investing in.

These are some of the factors that every investor must keep in mind while investing. Choose the best Mutual Fund for yourself, and never regret, despite the risk taken.

For more information visit- http://www.bajajcapital.com/

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Among the wide range of investment options available for investors today, Company Fixed Deposits are gaining popularity because of the high returns and other benefits. They are considered far more lucrative than Bank Deposits. However, the slate here is not clean, and Company FDs do have their set of risks involved, which need to be analyzed with utmost caution before investment.

LACK OF SECURITY

Bank FDs are more traditional and thus are a safer option. They provide security upto one lakh investment value, while on the other hand there is a major risk involved if the company you invested in suddenly goes bankrupt!

DIFFERENTIAL REGULATIONS

In case of bank deposits, they are governed by the Banking Regulation Act, 1949, while company deposits fall under the Companies Act, 1956, according to which, equity holders are given preference before FD holders, in case the company is shutting down.

PRE-MATURE CLOSURE OF DEPOSITS

Premature closure before 6 months is denied in most corporate FDs, and the investors have a penalty scare over their head. This premature closure in company FDs also requires a trail of tiresome paperwork, which proves to be another big hassle.

REPUTATION 

Not only should the interest rates be looked at and be lured by, investors should also track the records of the company they are investing in.

No matter how lucrative company FDs may seem, they are a risk in the investment business, and should be approached with proper aid and advice as well as knowledge backed planning.

For more information visit- http://www.bajajcapital.com/

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We have all heard of the adage – “Do not put all your eggs in one basket.” The same holds true in the world of investing. In traditional investment theory, this means holding a range of different products in your retirement portfolio. Too many investors lose their risk appetite as they age. But some opting for growth products is essential for retirees as well.

Beat inflation

Many investors rely on bank deposits for retirement income. They compare tax saving Fixed Deposits, and then try to choose the best annuity plans. Some think of term insurance premium calculators for retirement. But you should also take into account the impact of inflation on your expenses. The product will fall short if the income does not keep pace with inflation. And to earn inflation-adjusted returns, you should be willing to take some risk, by allocating some portion of the investments in inflation beating products. Considering the increase in life span, the retired life can be around 30 years, if a person retires at 60. 

Mix and Match

The advisable approach should be to protect your needs for the first 4 to 5 years of retirement in safe investments, so that short-term market fluctuations do not impact you. Beyond that, you should have some part of the funds invested in growth or equity assets. 

Some products bring assured income for life, but given the low returns, they should be used only to the extent required to meet necessary expenses such as health and insurance.

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A major reason of low tax compliance in India is the burden related maintaining books of account. Although in recent years steps have been taken to improve that. Moreover assesses now have facilities, and not just relating to tax. You can now avail calculators, such as online income tax calculator and online pension plan calculators among others.

But if you are a professional or run a small business, it is the Financial Act 2016 that must have brought cheers to you. It has certain amendments, one of them relating to presumptive taxation. The Finance Act has made things simpler for doctors, lawyers, chartered accountants, etc. by reducing the amount of effort needed to estimate the income for the year and also to file the returns.

Under the Presumptive Taxation Scheme (PTS), eligible businesses can file the return and pay tax on the basis of ‘presumed’ income. They can estimate their income at the rate of 8% of the total turnover. From the current financial year, professionals have been included under the umbrella.

Eligible professionals
The act includes those who are governed or regulated by an institute or body such as doctors, lawyers, architects, interior designers. Also, such professionals should have gross receipts under Rs. 50 lakh.

No advance tax payment
All professionals and businesses usually have to adhere to advance tax payment rules. However, under PTS, a professional is exempt from paying advance tax. This means that he or she does not have to estimate the income four times a year and pay advance tax accordingly. Instead, the professional has to go through the exercise just once.

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Investing in the equity market is not easy. Putting your money directly in shares may seem rewarding, but it has its risks. It takes intense research and analysis to study individual companies and figure out their value. That is why the common retail investor opts to go for Top Mutual Funds. Let us list down the reasons why it is tough to invest directly in shares.

Knowing in and out of the company – It takes hours and hours of studying the industry of which the company is a part. You have to study market reports, press releases and annual reports carefully.
Understanding Macroeconomics – Apart from studying individual stocks, you have to be aware of the existing economic conditions as well. It includes the country’s monetary policies, currency rates among other factors. It takes a lot of work and study to understand the numbers.

Understanding debt value – A company’s debt position is also a leading indicator of how the stock is going to perform. It is important to understand the relationship between the two. Most amateur investors are simply not aware of these.

It is not a one-time thing- You have to monitor your investments carefully and re-allocate the funds in case circumstances change. To manage all of this with regular day jobs is a daunting task.

If you still want a slice of the growth in equity, you can for equity MFs. You will get trained and experienced managers who pick your stocks. Not only that, your investments will be spread over tens and thousands of stocks. You can even get help to compare Mutual Funds in India from professional advisors.

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Congratulations! You have heeded a very important financial advice, and created for yourself an emergency fund. Having a buffer of three to six months of expenses in liquid assets is a significant measure. It is in fact an integral part of financial planning.

But what comes next?

You need to have a plan for the amount that you were putting away for the fund till now. Appraisal or bonus money should be allocated wisely. Without proper planning, it is easy to turn into a lifestyle creep. Now that you have created a nest egg, here is what to plan for next –

Create Wealth

The best way to create wealth, especially for salaried individuals is to start investing. Instead of depositing all your savings in banks, work towards investing some of that amount. To start investing, you can opt for a Systematic Investment Plan (SIP). You can always get a financial assessment done to decide the best plans for yourself. Take the help of a financial advisor, and don’t be afraid to ask questions!

Plan for retirement 

If you haven’t made retirement planning a priority yet, do it now. It is never too early to start saving for retirement. You can opt from products such as National Pension Scheme (NPS), Employee Provident Fund (EPS) among others.

Improve credit score

A good credit score makes it easier to avail loans from financial institutions. Make sure to pay off any consumer debt, such as credit card loans if you receive a windfall. It is important to never miss out on an EMI (Equated Monthly Installment)

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Ever wondered why banks introduced Fixed Deposits? What benefit do they draw from imply keeping your money for a fixed period and then returning it with a handsome return?

There’s a simple financial explanation to this. When you put money in your current or savings bank account, you can withdraw it anytime. But, if all the funds keep floating at customer’s discretion, then how will the bank find money to carry out processes such as giving out loans? That’s why there’s a need for deposits with a fixed tenure, aka Fixed Deposits or FDs. In return for blocking the customers’ funds for a longer duration, banks give a higher rate of interest compared to other deposits.

This quid pro quo is also utilised by company fixed deposits in India. Whenever a company needs funds, it has several means of raising them from the market. If it went to institutional lenders, they would ask for a higher interest rate. If it, on the other hand, goes to the bank customers with its Company Fixed Deposit instead, it will only have to pay them slightly higher than their bank FDs, which would still be lower than what the company would’ve had to pay the institutions. So, it’s a win-win situation!

There is one more reason why it’s called a ‘Company Fixed Deposit’. The interest rate remains fixed throughout the tenure. The fluctuation in bank rates does not impact the rate of return on FDs. From the very beginning, a customer knows how much interest the Principal amount will earn at the end of the tenure.

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How would you afford a good lifestyle when you are old and have retired? Would you have strength to continue earning the second income at that age? Alternatively, would you like to depend on someone to take care of your needs? No, right? So, you must start investing in a good pension plan.

The most advertised pension plans are different varieties of annuity plans offered by insurance providers. You decide when the pension starts and what kind of amount will be paid to you on a monthly basis. There is also an option of getting a certain sum paid regularly for a fixed duration regardless of your living tenure. Apart from this, there are other tax-related and financial benefits associated with different insurance products that you will need to inquire about before investing.

A very reliable choice is the National Pension Scheme (India), popularly known as NPS. If you invest in a Tier-I account of NPS, your investment is exempt under Section 80C. However, the pension that you will withdraw from it will be taxable. You will also be liable for Service Tax and other levies.

NPS lets you track the investment value on a daily basis. To open an account, approach a bank, Post Office or any financial institution authorised by the PFRDA (Pension Fund Regulatory and Development Authority).

Start investing early, start investing now and incur a handsome pension amount while you enjoy your Golden Years.

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Bonds, by definition, are debt instruments, investing in which gets you a fixed interest. Either you get the entire interest on maturity of the bond, or you could get it at regular intervals. It varies depending upon the type of the bond, and investor preference. However, it is advisable to not withdraw interest at regular intervals, as it would add to the Principal deposited, thus increasing your maturity amount.

The government issues bonds to finance its expenditure requirements. Both Central and State governments can issue government bonds in India. The government issues a variety of bonds -- Fixed Rate, Floating Rate, Zero Coupon and Capital Indexed, among others.


Why you should invest in them

● These are gilt-edged investments, i.e. they carry practically no risk of default.

● They are long-term securities. Once you invest, you don’t have to monitor constantly.

● The interest is paid at regular intervals, usually half-yearly.

However, out of all governments bonds in India, it is the Capital Gains Bonds that India prefers most. This is because they substantially save tax when you conduct property transactions. These bonds are issued by National Highways Authority of India (NHAI) and Rural Electrification Corporation Limited (RECL).
You can invest a maximum total of Rs. 50 lakh in them. By investing in these bonds within 6 months of your property sale, instead of attracting tax, your investment gets an exemption under Section 54 EC.

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When you want to invest money in a fix deposit (FD), the first thing that comes in anyone’s mind is interest rate. But, you will always notice that smaller financial institutions usually provide higher interest rates higher interest rates on FDs than bigger banks. Following are the few reasons behind it:

Few popular Fixed Deposits

If you compare FD rates, the country’s largest lender, SBI gives 9% interest rates on FDs below Rs.1 crore of one-two year tenure. The second largest lender ICICI offers 8-9% on term deposits for similar tenure. Now, let us analyze what smaller banks have to offer. Laxmi Vilas Bank Ltd offers 9.75% on a fixed deposit of for a similar period, whereas City Union Bank Ltd earns you 9.50% for a similar period.

Why the difference?

Analysts argue that smaller banks find it difficult to source funds. An avenue to create a money market for them is expensive. On the other hand, larger financial institutions have a better command in market since they have better credit ratings. The cost of raising funds for them through short-term paper is difficult for them. Secondly, being smaller institutions they have smaller retail base. Therefore, they try to attract customer more.   

However, choosing a term deposit should not be based only on attractive interest rates. The banking services should be also looked when the investment is long-term specifically. So, if your financial institution is liquidated, you get your ensured amount. 

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All of us spend more than half of our lives earning but in order to make your hard-earned money to work more effectively for you, one has to do financial planning. It starts with a review of your overall profile and planning your financial goals. These goals can include buying a house, saving a fixed amount of money for your child’s education or planning retirement.

The six steps which can help you in achieving your financial goals are namely, listing the financial requirements of future, setting life goals, examining your current financial status and planning a strategy to meet your financial goals.

Decide your financial goals

By viewing each financial decision as a part of your whole financial goal, you can consider its short-term and long-term effects on your life goals. As a result of this, you can also adapt more easily to sudden changes in life and feel more secure that your financial goals are on track.

Get a professional financial advice
The financial planners are not governed by the government. Instead, it regulates planners by the services they provide. For instance, a financial planner that provides insurance transactions is regulated in the form of an insurance agent. Many financial advisers like accountants and investment advisors can also offer the financial services. So, before getting a financial planning service, check if the advisor follows the six-step process mentioned earlier.

Commonly made mistakes in financial planning

The following are some of the common mistakes made by consumers in their approach towards Financial Planning.

• Not setting measurable goals.
• Confusing financial planning with investing.
• Not evaluating the financial plans periodically.
• Thinking that the financial plans are only for wealthy people.
• Expecting unrealistic returns on investment.

Hence, financial planning when done with an authorized financial planner protects you and your family from the financial uncertainties during the times of crisis. It can also help you to secure your present if you assess your current financial situation and plan your future accordingly.

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After you have achieved your financial goals, the unpredictable circumstances such as illness, inflation and unanticipated expenses can decrease the value of your assets. The longer life expectancies and long periods of financial plans make it difficult for you secure even your assured amount. It’s important to think of wealth protection as an important part of financial planning.

Benefits from wealth preservation strategies

A good wealth protection plan in place will help you to prepare a strategy for protecting your assets from any potential damage. It also ensures you the peace of mind knowing that you have made provisions to protect your financial future. The most valuable benefits include:

• The financial future of your family is secure, including the value of your assets.
• You are financially prepared to deal with any sudden illness and financial needs for long-term care.
• The financial stress of your family will be reduced in case of an untimely death or an unpredictable unemployment.
• Your heirs can directly own the assets in case of a sudden demise.

Combine life insurance in your wealth protection plans
The overall wealth preservation strategy should also include life insurance. Along with life insurance, following financial protection plans, can protect the assets you've worked hard to build:

• Estate Planning: Ensures that your earnings are beneficial for you when you are alive and helps you to transfer it to your heirs after your death. 
• Insurance Investing:  Can help in planning your financial freedom in your retirement years.
• Life Insurance: Provides an effective financial cover for members of a family in case of a sudden death.
• Accident and sickness insurance: Prepares you for any accident, disability or critical illness.

Choose the solution that’s right for you

Choosing the financial protection that's right for your circumstances can be challenging. Always see the benefits that a wealth protection plan is giving you. The benefits should not only restrict to the returns after an accident, but it should also give you benefits during the tenure of a plan.  

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Honest wealth creation through a Systematic Investment Plan (SIP) has a formula! Mutual Funds help you in wealth creation by adding dividend or gains to the principal amount, which results in a large amount at the end of investment period. The compound interest is added to the principal of a deposit and the added interest again earns an interest.

Following are a few points which will help you get more profits through an SIP (Systematic Investment Plan):

Invest early

To make most of compounding in an SIP, one must follow the golden rule of investing that is beginning early. This is because of fact that longer the investment cycle is, bigger will be the returns in the end.

Keep the investments for long time
The longer the period of investment is, more the chance to increase the gain is. It is due to dividend that someone receives on the current sum of money, which is higher, the longer you invest.

Invest regularly

SIP can give great returns on the wealth of investors who have a regular monthly income and cannot make lump sum investments. SIP is suitable for first time investors and for investors those who invest in equities due to market volatility and risk.

Cost averaging

One of the most important benefits of an SIP is cost averaging. The amount invested is fixed for an SIP; hence the number of units purchased for it in the market will be high and vice versa. Therefore, the average cost of a unit is reduced which in turn benefits the investor.     

Conclusively, compounding and SIP can benefit you the most if you begin investing early, keep investments for long time and invest in a regular and disciplined way. By following these steps, your principle will keep growing and will earn you a larger amount at the end of the investment period.

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Fixed deposits have always been popular due to the safety of capital and confirmed returns. The high interest rates which the FDs are earning in past few years have further increased the popularity of fixed deposit investment.

Here’s a piece of advise: It would be better to lock in your money in long term fixed deposits since RBI has cut repo rate and cash reserve ratio several times.

A few tips to increase returns in fixed deposits may come in handy:

Split your FDs
It is usually better to split your Rs. 5 lakh fixed deposit investment into five FDs worth Rs. 1 lakh each in various banks, since fixed deposits which accumulate up to Rs. 1 lakh are backed by deposit insurance.

Ladder your investment

The biggest risk that even the best fixed deposit scheme in India faces is the risk of your money being locked up for a long tenure at a low rate of return. To counter this, ladder your amount available for investment into smaller amounts. So, the first fixed deposit should be for one year, second for two years and so on.

Invest in a Public Sector Bank

Public sector banks offer a higher return on fixed deposits than private banks. So, one can get higher returns accompanied with more safety and security.

Avoid tax on your final amount

The interest earned through fixed deposits is not tax-free. The interest income from FDs up till Rs. 10,000 is exempt from tax. This tax can be avoided again if you break the total FD amount and invest smaller FDs in different banks.

RBI is likely to continue rate cuts in the coming fiscal year. So, the medium and long term fixed deposit investments will see larger positive return and not the short-term fixed deposits. Also by keeping these points in mind, one can increase the interests for fixed deposit for any term. 

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During the current financial year, tax free bonds have received overwhelming response from investors. Even the Bollywood could not resist investing due to the attractive benefits. Film stars like Akshay Kumar, Aamir Khan and Kareena Kapoor Khan invested in IRFC Bonds, while Ranbir Kapoor and Aishwarya Rai Bachchan parked their money in NHAI Bonds. If you have not yet invested and wondering what makes this investment avenue such an attractive option, let me introduce you with these government bonds.

As the name suggests, Tax-free Bonds are financial instruments which offer Tax relief to the investors by way of exemptions in Income Tax. These bonds have emerged as a popular choice among investors due to the taxation benefit it offers. Tax-free bonds are generally issued by government enterprises and have a fixed interest rate. As the proceeds from the bonds are invested in infrastructure projects, they have a long-term maturity of typically 10, 15 or 20 years. Being liquid, these bonds are tradable in the secondary market and are listed on exchanges. They carry credit ratings from one of the rating agencies approved by SEBI as well as Reserve Bank of India (RBI).

For the financial year 2015-16, government of India authorized state owned entities to raise Rs. 40,000 Crore through tax free bonds. Most of the bonds got over subscribed on the very first day of issue opening. While a major portion of authorized amount has been reached by these entities but to complete their allocation limit, some of them are coming up with second round of issue. This is definitely a golden opportunity for investors who missed it during the first phase.

In the month of February and March these issues are expected to arrive:

Note: Issue dates have not yet been disclosed by the entities. The above mentioned dates are tentative and may or may not change.

These bonds are completely tax free but capital gains made on selling of tax-free bonds on stock exchanges are taxed. If the holding period is less than 12 months, capital gains on sale of tax-free bonds on stock exchanges are taxed as per the tax slab of the investor. If bonds are held for more than 12 months, the gains are taxed at 10 per cent.

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When you listen to agents, you naturally become too intimidated by all the figures, financial laws, and theories that they rattle off. So, you are not sure how to invest in mutual funds in India, or whether you should simply stick with a bank Fixed Deposit (FD).

Don’t get confused with all the data flying around. Simplify, and you’ll find that there are certain basic points that easily cut through all the financial jargon, so that you get the information that you really want. What you really want to know about a mutual fund is:

● What is the return on it

Higher the risk, greater the returns. Usually, the risk diminishes from Equity to Hybrid to Debt type of mutual funds. Consider the historical performance of a fund, and the returns that the fund manager has generated for other mutual funds he has managed.

● What is the tax status

You must also check what are the tax exemptions available or, what are the tax liabilities arising from investing in your chosen mutual fund.

● What are the fees & charges

Entry loads, exit loads, switching charges and other sundry deductions by the mutual fund could completely gobble up your gains, if you’re not watchful.

With that, you know how to assess your chosen mutual fund. Use the same criteria to compare mutual fund performance before deciding where to invest your hard-earned money.

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Two investment dilemmas bother every enlightened investor: How much to allocate for the future in the best case scenario, and in the worst-case one. To be blunt, the question is: “How to make sure that my family lives happily -- with me and after me?”

In the worst case scenario, you are looking for insurance. And that means you need the guidance of a Human Life Value Calculator. It’s a simple online tool. Just enter these details:

● Annual household expenses

● Annual income

● The number of years your family should get an income

● Expected rate of inflation

● Expected returns

● Outstanding liabilities

● Current investments and assets

● Current value of insurance

The Human Life Value Calculator then calculates your net worth, how much income your dependents will need and consequently, how much insurance you have to take on.

But let’s look at the brighter side now. What are the regular instalments that you need to pay to invest in mutual funds? Systematic Investment Planning or SIP is proven to give great returns that will one day bring your dreams to fruition.

Utilise the helpful SIP Return Calculator India mutual funds offer. Enter these details:

● Your regular investment amount

● The frequency of investment

● The number of years of investment

● The expected annualised returns

Press the ‘Calculate’ button to find out how much you have invested, and how much will you get on maturity.

Your dreams and your family are under a safety net now. Congratulations!

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