No matter what savers are hoping for, interest rates are going to stay low for years to come. It is time to study the investment alternatives.

Sebi's recent reorganisation of fund categories has somewhat changed the lie of the land, so the types of mutual funds that work well as substitutes for bank accounts are liquid funds and ultra-short duration funds. These funds give predictable and stable returns with negligible volatility. The precise definitions that Sebi has now enforced have made them even more stable. Over the past year, liquid fund returns have been an average of 6.85%, while that of ultra-short duration funds have been around 6.47%.

While these compare well with the deposit products they can replace, the real kickers are convenience and tax factors. Liquid funds can be invested in and redeemed through a smartphone-based app for many fund companies. Through these apps, you can invest instantly by transferring money from your bank accounts. More to the point, you can redeem the investments and the money gets transferred to your savings account in five to 10 minutes. So you are able to earn interest that is 1.5 times that of a savings account and, yet, have a liquidity compromise of only a few minutes.

The benefits of funds over fixed deposits go much beyond a simple comparison of returns. The different taxation structure means there's a bigger difference in post tax returns. The tax difference arises from the fact that returns from fixed deposits are classified as interest income, while mutual fund returns are classified as capital gains. For interest income, you have to pay tax every year for what you have earned that year. If your total interest income from a bank (all accounts and deposits together) exceeds ₹10,000, then the bank also deducts TDS at 10%. In fact, if the bank does not know your PAN, it will deduct 20%. This means that a part of your return is not available for compounding because it is taken out and paid as tax every year.

There is a further advantage to the mutual fund option if you stay invested for more than three years. If you redeem after three years, then the gains are classified as long-term capital gains and are taxed after indexation. Essentially, you get taxed only on inflation-adjusted returns. Again, this does not happen with FDs. Applying all these factors, a three-ear investment in a short-term fund will leave you with almost twice the returns as an FD over the same period, and with excellent liquidity.

Earlier, this kind of fine-tuning could be expected only from a handful of knowledgeable and involved investors. However, with low interest rates, the payoff is huge, and a lot of us could benefit substantially from shifting away from deposit-type products and towards mutual funds.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

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Invest [at] SaveTaxGetRich [dot] Com

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

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An ELSS mutual fund is quite the same as a diversified equity fund, other than tax deduction benefits and the three-year lock-in. ELSS investments come with a lock-in period of three years, which is lowest among Section 80C investments. Investors should understand ELSS mutual funds are equity market-linked products.

1) The PPF is a 15-year government-backed savings option offered through banks and post offices. Thereafter, it can extended further in batches of five years.

2) The interest rate on the PPF is revised every quarter and is benchmarked to yields on government securities. Currently, the PPF fetches an interest rate of 7.6%.

3) In the PPF, you can maximise your returns by investing early in the financial year so that your deposits can earn interest for the entire year.

4) The minimum amount that must be deposited in a PPF account in a financial year is Rs 500 and the maximum allowed is Rs 1.5 lakh.

5) From the seventh year, you can make partial withdrawals from your PPF account. Apart from income tax benefits, the PPF is suitable for conservative investors who are looking at long-term financial goals like a child's education or retirement, say financial planners. The interest and maturity proceeds are exempted from tax.

6) Premature closure of a PPF account is allowed only under specific conditions such as expenditure towards medical treatment. For this, a PPF account must have completed at least five financial years.

7) ELSS or tax-saving mutual schemes have a three-year lock-in period. You can partially or fully redeem your ELSS or tax saving mutual fund investments after three years.

8) Financial planners suggest investors to opt for systematic investment plans (SIPs) in tax saving mutual funds to help spread their spread their investments throughout the year.

9) The lock-in of three years also applies to SIPs. In other words, every SIP instalment in a ELSS fund is subject to a three-year lock-in.

10) Long term capital gains from equity mutual funds, including ELSS funds, above Rs 1 lakh will be taxed at 10%. ELSS funds come with both growth and dividend options. Mutual fund houses have to pay a dividend distribution tax or DDT of 10% on dividends declared under equity schemes, including ELSS funds. This effectively reduces the return from dividends from equity funds.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

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One is the likelihood of a fund manager losing money in a certain stock. I think if a fund manager goes wrong, the possibility of significant loss in a focused fund is far higher. Because in a focused fund a position in a stock can well be in the region of 5 to 10 percent.

The other is that focused funds can be far more volatile because you have fewer stocks. Nowadays, we are seeing a volatile market. So, the days on which the market goes down you see the concentrated fund falling much more than the market, compared to a more diversified fund.

I would say volatility is not as much of a risk on a 5 to 7 year basis. Because volatility, if you stay invested, is not a risk. But the risk of the fund manager going wrong is reasonably high.

So, yes, focus funds do come with high risk of volatility as well as the penalty for a fund manager going wrong with his selection is very high. And if he goes wrong with a couple of things, it could be a disaster.

But, I guess, that is where evaluation of a fund manager for a focused fund comes in handy. As a fund performs well and gets more money, it tends to become more diverse. So, I think 30 also gets you reasonable diversification.

So, check two things. You should look at the experience of the fund manager, of what he has set out to do and what are the quality filters. That apart, make sure even if it is a focused fund, it has at least 20 to 25 stocks, which is reasonable diversification for an investor. If you are comfortable with the volatility some of the focus funds look very promising.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

What are critical illness plan?

There are two types of health plans: indemnity and defined benefit plans. A basic health insurance is an indemnity product that covers hospitalisation expenses, pre- and post-hospitalisation expenses and listed day-care procedures.

Defined benefit policies pay a stipulated sum on an insured event. A critical illness policy is a defined benefit plan that pays the total sum assured on diagnosis of an insured critical illness; it doesn't matter what the hospital bill is. Also, most of the plans terminate after the first claim; few plans cover multiple critical illnesses but mostly cap the number of illnesses they can cover.

A critical illness policy helps cover incidental expenses and supplements your income in case you are unable to work: a plausible fallout of a critical illness.

The caveats

You need to keep in mind some caveats, the most important being the waiting period.

Most health plans come with an initial waiting period. A critical illness plan has that and another specific one: the survival clause.

This kicks in if a policyholder is diagnosed with a critical illness. Most insurance companies have a survival period of 30 days and it's only after the policyholder has survived this period that the claim is settled.

Some plans may waive off this clause.

What you need to do

The most challenging aspect of buying a critical illness policy is understanding what is insured. It's not just looking at the number of critical illnesses covered and going for the one with the maximum number of illnesses covered, but also about understanding the exact definition of the illnesses to avoid unpleasant surprises at the time of making a claim. For instance, a critical illness plan covering cancer may not cover the early stages of cancer.

The second thing to understand and think about is how you buy a critical illness plan. These policies can be bought as a rider—on a base policy like a life insurance policy—or as a standalone policy. But as a rider, the policy exists only till the time the base policy exists. Surrender the policy and you end up forgoing the benefits of a critical illness policy.

Unlike a health insurance policy, a critical illness policy requires minimal paperwork because the insurer concerns itself with the diagnosis of the ailment.

SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Why go for term plan-MF combo
The term plan-mutual funds combination is financially the most efficient. Ulips levy a number of other charges besides the fund management charge (that a mutual fund also charges) and mortality charge (that a term plan charges). They levy a premium allocation charge (PAC), an administrative charge, and so on. The cost structure of Ulips is also complicated. While charges levied under endowment plans and money back policies are unknown, charges under linked policies are clearly mentioned in policy brochures and policy document available on company website. Investors are either unaware or they do not take pain to go through the policy details before making a final purchase. Insurance companies, agents and advisors take advantage of the ignorance of investors and sell policies which are not really helpful.

Therefore, in the first place, the mutual fund-term plan combination scores by having a lower and more transparent cost structure.

Another problem with Ulips is that an insurance company offers only a limited number of fund options. If the funds offered by the insurance company underperforms, the investor does not have the option to exit his current fund and invest in a high-return fund from another company (until the lock-in period is over). On the other hand, if he invests in mutual funds, he can easily exit his current underperforming fund (most mutual funds do not have an exit load after one year), and choose to invest in any one of the hundreds of funds available in the market.

Traditional products such as endowment plans and moneyback plans too have drawbacks. The biggest is that they offer simple interest, whereas if you invest in a mutual fund or even in a PPF, your investments grow through compounding. As we well know, the effect of compounding is powerful, especially over the long term. The second disadvantage of traditional products is that they have a high allocation to debt products. This, too, affects their returns: over the long term, as we know, returns from equities trounce those from debt.

Another disadvantage of insurance-cum-investment products belonging to insurance companies is that despite paying a hefty sum of money as premium, the family could still be under-insured. Since term plans are inexpensive, one can buy adequate amount of cover through them.

What should you do
Exit and bear the losses upfront: If a person has invested in a Ulip or in traditional products, and especially if he has paid the premium only for two or three years, the ideal solution would be for him to exit these policies right away. In the older Ulips, there was a lock-in period of three years, which has now been extended to five in the new Ulips. If an investor exits from an old Ulip after paying two premiums, he will lose out on his premiums completely. If he exits an old Ulip after three years, all he is likely to get is the third-year premium; the myriad charges in Ulips would eat up the rest. According to Pune-based financial planner Veer Sardesai, 'Over a 20 to 25 year span the investor is better off exiting these policies, even if it means entirely forfeiting his premium, and going with the term plan-mutual funds combination.' However, only investors who are financially savvy would perhaps agree to pursue this course of action.

Stay put: At the other end of the spectrum, you would have investors who are not at all financially savvy. They would have little knowledge of term plans (because agents do not push them) and mutual funds (especially in smaller towns, there tends to be greater awareness about insurance products than about mutual funds). Such investors would be wary of these options.

These investors would prefer being in a Ulip rather than in a term plan-mutual fund combination because a Ulip, being a product from an insurance company, would offer them a greater sense of security (especially if it is from the public-sector behemoth). Such investors could stay put in the Ulip. Even if the Ulip is not a financially-efficient product, it would still benefit these investors by offering them equity exposure, which would boost their returns over the long term.

The middle path: Next, you have investors who are financially savvy and who understand the logic behind promptly exiting a Ulip or a traditional product. Despite this, they might shy away from the option of writing off their premiums in the Ulip entirely. Very often the premiums they have paid are as high as Rs1 lakh or more per year, so bearing the loss upfront becomes difficult.

For such investors, Sardesai suggests the middle path of making the policy 'paid up'. Enquire from the insurance company the minimum period for which premiums must be paid. Pay till then and then stop. Thereafter, the policy will continue to exist. The insurance company will deduct its annual charges from the corpus that has accumulated within the policy and keep it alive. The paid-up policy would offer a lower sum assured, but the investor would at least be saved from throwing good money after bad. The advantage of this course of action is that the investor feels he has not lost his money entirely, though if one were to do the mathematical calculations, the first rather than this third option would be optimal.

As you can see, once you have entered these high-cost insurance-cum-investment policies, there can be no painless exit. Taking your losses upfront, especially if you have not been in these policies for long, would be the best course of action if you are keen to get your financial portfolio back on track.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

So, the next steps involve doing a thorough research on the various policies available in the market vis-à-vis one that meets your requirements to the closest. Broadly, there are two types of travel insurance policy available in the market for travellers travelling abroad: single and multi-trip travel insurance policy. But first let's understand the basic difference between the two:

As the name suggests a single trip travel insurance policy provides coverage for one domestic or international trip. Even if one is on a single trip, they can visit multiple destinations or multiple countries, and that is still considered a single trip while you are away from your home. The policy will last until one returns home from the trip.

The policy cover starts from the time one flies from the home country to the foreign destination and remains in force till the date of the return/ end of policy (whichever is earlier). The insurance policy comes with an extendable facility and quick claim resolving option. Single trip insurance can be bought as soon as one plans to leave. Such policies generally cover hospitalisation expenses, emergency dental treatment costs, loss of checked-in luggage, among others.

Those who travel occasionally and for a long duration, single trip travel insurance is an appropriate choice. It is also cost-effective as one needs to pay only for the exact length of the trip.

All insurance companies have a cap on the number of days that are to be counted as a single trip. Normally, a single trip plan provides cover for a period of around 180 days.

Multi-trip travel insurance plans are generally purchased on an annual basis. The policy term, which will be in force for a period of 12 months, begins from the date on which it is bought. All trips one makes during the year will be covered under the same policy. Multi-trip travel insurance policies generally cover loss of passport, emergency medical expenses, trip cancellation among others.

The cover is basically set for 365 days, wherein a person can fly abroad as many times as he wants under the same insurance policy. If one goes on multiple official trips in a year or believes in exploring the world, then this is the best option for you. That said, some multi-trip plans do have a limit on the duration of travel which may vary from 30-70 days per trip. Hence, reading the fine print is always advisable.

To be eligible for a multi-trip travel insurance one should hold a domestic health insurance policy in the country of their origin.

Single trip insurance policies are designed for people who only take one or two holidays a year, whether that is a short trip to Singapore or a three-week jaunt in Europe. Multi-trip policies, on the other hand, are for those lucky enough to enjoy more than two journeys a year. These policies are often better value for money than buying single trip cover for each separate holiday. Multi-trip policies allows one to make unlimited journeys in a year. Moreover, most policies will limit the length of each trip (usually between 31 and 45 days), but double-check for any restrictions before you buy.

Whatever policy one decides to opt for, there are certain things one must cross-check. Key ones being destination, duration of stay, possible medical expenses, (including sports/activity-related injuries in case your focus is thrill or adventure travel), the cash and valuables you will be carrying, trip cancellations in case of multi-trips and policy limits and exclusions.

Destination is crucial as most insurance companies have separate cover for Europe and the rest of the world. Some worldwide policies even exclude the US, Canada and the Caribbean. The level of cover and feature varies from country-to-country and plan-to-plan.

Though every policy offers basic medical cover for unexpected or new injuries and illnesses, one must ensure that they are covered for all medical emergencies. All existing medical conditions must be declared before the purchase of the policy, otherwise there are chances of denial.

The cancellation cover must be enough to encompass the pre-paid cost of the trip(s). The cost of emergency items of clothing should also be accounted for in case the luggage is misplaced and damaged by the airline.

Both plans have different uses and advantages. The choosing criteria is solely based on one's requirements and policy options. A single or multi-trip travel insurance policy makes your journey worthwhile and provides you complete peace of mind in a foreign territory.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com